The main legal point established in the judgment is the interpretation of the Foreign Exchange Regulation Act, 1947, specifically the application of S.19 (2) and the definition of 'documents' under the Act. The judgment also emphasizes the application of S.523 of the Criminal Procedure Code in relation to property seized by the police and produced before a Magistrate.

1. This is a petition under S.439 of the Criminal Procedure Code for revising an order which the First Class Magistrate, Varkala passed on 30-5-1966 on an application filed before him by the Enforcement Officer, Enforcement Directorate, Ministry of Finance, Government of India, Cochin. He is the sole respondent in this case. The application was not numbered; but it was made in Crime No. 83 of 1966 of the Varkala Police Station, which it had reported to the Court of the above Magistrate on 27-5-1966.

2. The petitioner before us is one Krishnan Sukumaran, a resident of Varkala Village in Quilon District. The records of the Magistrate's Court, which have been called for, disclose the following facts. At 4 a. m. on 27-5-1966, while the Sub-Inspector of Police, Varkala and party were returning to their station in two motor cars with a few accused persons arrested by them, the Sub-Inspector saw a person standing by the side of the public road near the Mission Hospital, with a filled cloth bag. The Sub-Inspector stopped his car, when the above person went to the car with the bag. Apparently, he was waiting for somebody to come in a car. But when he saw the police, he tried to escape. He was stopped and the bag was searched. It contained 789 Indian currency notes of one hundred rupees denomination, bundled into several lots and slips of papers attached thereto. He was arrested on the spot, and the whole currency notes were seized by the Sub-Inspector. The person thus arrested is the petitioner before us. He told the police that these currency notes were entrusted to him by one Kesavan Madhavan, that they were amounts remitted from foreign countries through secret agencies to be distributed to persons in India, and that he was waiting there for Kesavan Madhavan, who had promised to come in a car and meet him. The arrest and seizure were made on the reasonable belief that the petitioner along with others were guilty of offences under the Foreign Exchange Regulation Act, 1947 (hereinafter referred to as the Act) and that the currency notes were involved in the crime. The police produced the petitioner and the notes in the court of the First Class Magistrate on 27-5-1956. The petitioner was remanded to custody. Kesavan Madhavan was arrested under S.19-B of the Act by the respondent, and produced before the court on 30-5-1956. On the same day, both the petitioner and Madhavan were released on bail by the First Class Magistrate.

3. On 28-5-1966, the Assistant Director, Enforcement Directorate, Ministry of Finance, Government of India, Madras passed an order under S.19 (2) of the Act. On 29-5-1966, the Sub-inspector of Police submitted a report in the First Class Magistrate's Court praying that as the offences in respect of which he took action fell under the Act, and as the respondent was the competent authority to investigate into them, all the records and material objects taken into custody and produced in court may be handed over to the respondent. On 30-5-1966, the respondent made the application, in which the order sought to be revised in this case was passed. Along with this application, the respondent also produced in the Court, the order of the Assistant Director of the Enforcement Directorate. This order reads as follows:

"Enforcement Directorate, Ministry of Finance,

Department of Revenue, Government of India.

Telephone: 82080 Telegram: 'Dirfera' 5/6, Mount Road, (Round Tana) Madras-2 No. MF. ENF. MA.

INT/52/66 (c)/66

Whereas for the purpose of the Foreign Exchange Regulation Act, 1947, (VII of 1947) the Central Government considers it necessary or expedient to obtain and examine the information and documents

seized from Shri Krishnan Sukumaran, and now in the possession of the Sub-Inspector of Police, Varkala, Trivandrum District, Kerala State or which in the opinion of the Central Government it is possible for the said Sub-Inspector of Police, Varkala to obtain and furnish,

Now Therefore in exercise of the powers conferred