The Magistrate's jurisdiction to order the disposal of seized money is absolute, but it is subject to the provisions of the Income Tax Act.

VYAS, J.

1. This is a reference made by the learned Sessions Judge, Indore, for setting aside an order passed by the Magistrate, First Class, Indore, with regard to the production of certain cash amount which was seized by the police under Sections 54(1) and 550 of the Code of Criminal Procedure.

2. Briefly stated, the facts giving rise to this reference are these : On February 5, 1970, Sadar Bazar police seized currency notes worth Rs. 1,73,230 from the possession of the non-applicants, Mohammed Hanif, Mohammad Sharif, Abdul Aziz, Istiaque Beg and Ishaque Mohammad, while they were in a motor car No.GJB-5330 in the city of Indore. The police suspected that the currency notes were connected with the commission of some cognisable offence. After seizing this money, the police reported the matter to the Magistrate concerned for suitable orders with regard to the custody, production and disposal of this amount. Subsequently on February 10, 1970, a report was made by the police to the Magistrate that the money was no more required by them in connection with any offence. They also reported that the Income Tax Officer, namely, the non-applicants, Satischandra and Deshmukh, under the authority of warrant of authorisation from the Commissioner of Income Tax, Nagpur, for the search and seizure of some unexplained money, have seized the said money. The Income Tax Officers, according to the report of the learned Sessions Judge, were informed by the Sadar Bazar police about the seizure of this money by them and it was consequent upon this information that warrants of authorisation were obtained and the money which under the orders of the Magistrate was kept in the custody of the police, was seized by the Income Tax Officers. When the learned Magistrate considered this regort made by the police about the seizure of the money by the Income Tax Officers, a direction was given to the police to produce the currency notes for disposal under Section 523, Criminal Procedure Code. The police, thereupon, reported their inability to produce the money as it was seized by the Income Tax Officers. The Magistrate, thereupon, issued notices to the Income Tax Officers and the Commissioner of Income Tax, Nagpur, either to produce the money or to show cause why it should not be produced.

3. In the reply filed by the Income Tax Officers it was stated that the money was lawfully seized under the provisions of the Income Tax Act and that they were not liable to produce the money as directed. The objections raised by the Income Tax Officers were rejected by the learned Magistrate, who took the view that once the property, viz., currency notes in this case, were seized and was in the custody of the court, the Income Tax Officers could not seize it without any orders from him. A direction was accordingly issued to the Income Tax Officers to deposit the money in court.

4. Against this order, a revision application was made to the Sessions Judge, who was of the view that the provisions of the Income Tax Act were special provisions in this matter and that the Income Tax Officers, though they committed a technical error in not obtaining orders from the Magistrate, did not commit any illegality so as to make them liable for the refund of the money. He has, accordingly, made this reference to this court for setting aside of this order passed by the learned Magistrate.

5. In this court, the learned counsel appearing for the Income Tax Officers supported the reference. Learned counsel appearing for Mohammad Hanif and others, from whose possession the money was seized, has opposed the reference on the ground that in this matter, the jurisdiction of the Magistrate for passing orders for the final disposal of the money was absolute and that the Income Tax Officers could not, either on the report of the police or suo motu, seize the money, which was in the court's custody. I have considered these contentions in the light of the recommendations made by the learned Sessio