The Commissioner of Income-tax has jurisdiction to issue search and seizure warrants under Section 132(1) of the Income-tax Act only if he has reason to believe that any person is in possession of money, bullion, jewellery or other valuable article or thing which represents either wholly or partly income or property which has not been disclosed for the purposes of the Indian Income-tax Act, 1922, or this Act.

Bhopinder Singh Dhillon, J.

1. The facts giving rise to this Letters Patent Appeal may be briefly stated.

2. Balwant Singh, traffic inspector of Punjab Police, along with some other police officials, was present about one mile from Kartarpur towards Jullundur on August 6, 1971, at 11-00 a m. He received secret information that an Ambassador car of white colour was coming from Jullundur side in which some smugglers were travelling. The information was that the smugglers had a big amount of currency notes with them and they were going to distribute the same illegally amongst the persons in the area of Police Station, Kartarpur, whose relations were living in England. Banke Lal and Hazara Singh, two persons mentioned in the first information report, also reached the spot. They were associated with the police party. In the meantime, car No. PNO-3070, Ambassador, white colour, came from Jullundur side. The car was stopped by Balwant Singh and his party. Three persons seated in the car were Ramesh Chander, Subash Chander and Radha Kishan. The car was driven by Charan Singh, driver. Ramesh Chander, writ-petitioner, was holding one bag in his one hand and another small bag was in his other hand. Balwant Singh asked him as to what was contained in the bags. Ramesh Chander disclosed that the big bag contained currency notes worth Rs. 1,61,008 and the small bag contained the business papers. Balwant Singh interrogated him in order to satisfy as to how he was in possession of such a big amount, but no satisfactory explanation could be given by Ramesh Chander. Balwant Singh then took the car and its occupants to the Police Station, Kartarpur, where he contacted the Income-tax Officer, Jullundur, on phone in order to find out whether Ramesh Chander was a man of such big means or not. He was informed that Ramesh Chander was not a man of substance. He then rang up the Commissioner of Income-tax, Patiala, and informed him that a sum of Rs. 1,61,000 had been recovered from Ramesh Chander. The details of the talk which took place between Balwant Singh, traffic inspector of the Punjab Police, and the Commissioner of Income-tax, Patiala, are not available, but whatever facts are on the record will be narrated at the relevant place.

3. Shri Nathu Ram, Income-tax Officer, Jullundur, immediately visited the business premises of Ramesh Chander in order to sign the books of the firm. It may be pointed out at this stage that Ramesh Chander, writ-petitioner, is a partner of the firm, Messrs. Shiv Iron Traders, Tanda Road, Jullundur City, and the said firm comprises of the following partners :

1. Diwan Chand Aggarwal, father of Ramesh Chander 50%

2. Roshan Lal, brother of Ramesh Chander 25%

3. Ramesh Chander 25%

4. Ramesh Chander is also a partner of another firm, Messrs. Katak Ram Ramji Dass, Tanda Road, Jullundur, which has the following partners:

1. Diwan Chand Aggarwal father of Ramesh Chander 76%

2. Sri Krishan Dass 12%

3. Ramesh Chander 12%

5. The business premises of both these firms are situate at Tanda Road, Jullundur. The writ petition was filed by Ramesh Chander and the two firms, namely, M/s. Shiv Iron Traders and M/s. Katak Ram Ramji Dass, of which Ramesh Chander is the partner.

6. According to the statement of Shri J.S. Cheema, Income-tax Officer, Special Investigation Branch, Patiala, whose statement was recorded by the learned single judge, when the Commissioner of Income-tax, Patiala, received a telephonic call from Balwant Singh, traffic inspector of the Punjab Police, at about 12-30 p.m. on August 6, 1971 at his residence, he (Shri Cheema) was called by the Commissioner and the Commissioner dictated a note to Shri Cheema. In consequence of the said order of the Commissioner, three search and seizure warrants were issued. By means of one warrant the Commissioner of Income-tax, Patiala, authorised Shri P.R. Gupta, Income-tax Officer, Jullundur, to search the precincts of Police Station, Kartarpur, and to seize the currency notes,