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IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
S. Murtaza Fazl Ali,Syed Wasi-ud-Din, JJ.
Gh. Mohd. & Ors. - Appellant
Versus
Assistant Director, Enforcement & Anr. - Respondent
Writ Petition No. 43/1972
Decided On : 03 December, 1973
FOREIGN EXCHANGE REGULATION ACT, 1947 - SECTION 19-D - SEARCH WARRANT - CONDITIONS PRECEDENT - JUDICIAL REVIEW - SCOPE - DOCUMENTS SEIZED - RETURN.
Fact of the Case:
The petitioners, proprietors of a firm dealing in woolen carpets and authorized dealers in foreign exchange, challenged the legality of a search warrant issued under Section 19-D of the Foreign Exchange Regulation Act, 1947 (the Act), alleging that the conditions precedent for issuing the warrant were not met and that the search was conducted without complying with the provisions of the Act.
Finding of the Court:
The court held that the authorization for the search was illegal and without jurisdiction because the conditions precedent to the exercise of the power conferred by Section 19-D(1) of the Act had not been fulfilled. The court found that the respondents failed to provide satisfactory evidence of objective facts to show that the conditions precedent had been fulfilled, as required by law.
Issues: 1. Whether the issuance of the search warrant under Section 19-D of the Act was legal and valid. 2. Whether the conditions precedent for issuing the search warrant were met. 3. Whether the search was conducted in compliance with the provisions of the Act.
Ratio Decidendi: 1. The court held that the power to issue a search warrant under Section 19-D of the Act is subject to judicial review, and the court can examine whether the conditions precedent for issuing the warrant were met. 2. The court interpreted the words "reason to believe" and "in his opinion" in Section 19-D to mean that the officer issuing the warrant must have a rational belief, based on objective facts, that the documents sought to be seized are relevant to a proceeding under the Act and are secreted in a particular place. 3. The court held that the respondents failed to provide satisfactory evidence to show that they had a reasonable belief that the documents sought to be seized were relevant to a proceeding under the Act and were secreted in the petitioners' premises.
Final Decision: The court allowed the writ petition and declared that the authorization and the search warrant issued were illegal and without jurisdiction. The court directed the respondents to return the documents seized during the search.
The Petitioners in this wit Petition have prayed for a declaration that the issuance of the search warrant, the search and the seizure of all the documents described in Annexure ˜A™ to this petition, are illegal ultra vires and mala fide, and have further prayed that the respondents be directed not to proceed ahead with any such proceeding and for a further direction that the respondents should return all the documents seized which have been detailed in Annexure ˜A™ to this petition.
2. The relevant facts which have given rise this present petition briefly stated are as follows : -
The petitioners are the proprietors and partners of the firm M/s Indo Kashmir Carpet Factory, Srinagar, (hereinafter referred to as the firm). This firm deals in the manufacture and export of woolen carpets and as such has to deal with the foreign exchange. The firm is also an authorised dealer in foreign exchange within the terms of Foreign Exchange Regulations Act, 1947 (ACT VI of 1947) hereinafter referred to as ˜the Act™). That on 7th June 1972 respondents Nos. 1 and 2 came to the premises of the firm situate at Shah Mohalla along with a number of State Police Officers and Police-men and encircled the entire premises of the firm. After entering the office of the firm, the respondents showed to Shri Ghulam Qadir, the Manager of the firm, the document purporting to be a warrant of search issued under Section 19-D of the Act and searched the premises from 12.30 P.M. to 8 P.M. The search was stopped at that time and it is also alleged that at the same time the respondents had sent also a big party of local C.I.D. Police Officers and policemen in plain clothes to the residence of the petitioners™ father at Nawabazar who likewise encircled the house and put the petitioners™ father under wrongful restraint. There are also allegations in the petition that the search was made without complying with the provisions of the Act as required by law, and that the petitioners™ father and petitioners servants were also manhandled. The search is also said to have taken place on 8th of June 1972 and it is said that a number of order books, ledgers, some cheques and ten dollar notes etc. details of which are given in the Panchnama annexure ˜A™ were also seized. According to the petitioners the respondents on being questioned about the reasons for the search told the Manager that it was in connection with the allegedly under-invoiced orders supplied by the petitioners in the year 1968-69 without showing them the actual complaint or giving any further details of the order referred to by the respondents, and when the respondents were requested to give in writing the grounds, the respondents directed the petitioners to approach them formally by writing but an application which upon being made was not even acknowledged. It has been contended that even if there was any such allegation against them, the documents which had been seized had nothing to do with the same. The order for the search of the premises was said to have been issued under Section 19-D of the Act and it has been urged on behalf of the petitioners that the order was illegal and unwarranted because the pre-requisite conditions as required by that section were not present and there was no compliance of the provisions of that Section.
3. The respondents have filed a counter affidavit in which there is no denial of this fact that there was a search of the premises and the documents had been seized but it has been urged that the respondents have only discharged the duties cast on them under the Act and the petitioners by filing this writ petition are trying to stop the proposed enquiry and that the petitioners are entitled to participate in the enquiry and get the account books etc. released and unless the enquiry is completed no order for the release of the documents seized can be passed by the respondents.
According to the respondents reasons for the respondents satisfaction could not be
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