1985 (4) TMI 323 - SC - FEMA

Appeal Dismissed: Search Warrant Legal. Allegations Unsupported. Procedural Compliance Upheld.

PRATAP SINGH (DR.) Versus DIRECTOR OF ENFORCEMENT FOREIGN EXCHANGE REGULATION ACT

PRATAP SINGH (DR.) Versus DIRECTOR OF ENFORCEMENT FOREIGN EXCHANGE REGULATION ACT - 1985 AIR 989, 1985 (3) SCR 969, 1985 (3) SCC 72, 1985 (1) SCALE 1208 Issues Involved:1. Legality of the search warrant issued by the Assistant Director, Enforcement.2. Legality of the warrant of authorization issued by the Commissioner of Income Tax.3. Allegations of personal malice by respondent No. 6.4. Requirement to return documents seized during the search.5. Compliance with procedural requirements under Sec. 37 of the Foreign Exchange Regulation Act and Sec. 165 of the Code of Criminal Procedure.6. Allegations of tampering with documents by the officers of the Enforcement Directorate.Issue-wise Detailed Analysis:1. Legality of the Search Warrant Issued by the Assistant Director, Enforcement:The appellants contended that the search warrant issued by respondent No. 2 was illegal as there was no material before him to entertain a reasonable belief that any documents useful for or relevant to an investigation under the Foreign Exchange Regulation Act were secreted in any place. The court examined the affidavit and the original papers produced and found that there was sufficient material before respondent No. 2 to justify the issuance of the search warrant. The court held that the Assistant Director, Enforcement, acted within his powers and had reasonable grounds to believe that incriminating documents were secreted in the appellants' residence.2. Legality of the Warrant of Authorization Issued by the Commissioner of Income Tax:The appellants challenged the warrant of authorization issued under Sec. 132A of the Income Tax Act, arguing that it was influenced by personal malice from respondent No. 6. The court found no substance in the allegations of personal malice and held that the warrant of authorization was issued based on sufficient material and information available to the Commissioner of Income Tax.3. Allegations of Personal Malice by Respondent No. 6:The appellants alleged that respondent No. 6 instigated the issuance of the search warrant due to personal malice. The court found the allegations to be vague and unsupported by evidence. The court noted that the affidavit of the servant, Gyan Chand, was not provided, and the allegations were deemed to be a nefarious attempt to attribute personal malice without substantial proof.4. Requirement to Return Documents Seized During the Search:The appellants argued that the documents seized during the search should be returned as the search was illegal. The court referred to the decision in Pooran Mal v. Director of Inspection (Investigations) of Income Tax, which held that relevant evidence obtained through illegal search or seizure is not excluded merely on that ground. The court concluded that even if the search was illegal, it did not necessitate the return of the seized documents.5. Compliance with Procedural Requirements under Sec. 37 of the Foreign Exchange Regulation Act and Sec. 165 of the Code of Criminal Procedure:The appellants contended that the officer issuing the search warrant must record in writing the grounds of his belief and specify the items to be searched for, as required by Sec. 165 of the Code of Criminal Procedure. The court held that Sec. 37(2) of the Act provides that the provisions of the Code relating to searches shall apply 'so far as may be,' meaning that the methodology prescribed for carrying out the search should be generally followed. The court found that there was sufficient material before the officer to form a reasonable belief and that the procedural requirements were substantially complied with.6. Allegations of Tampering with Documents by the Officers of the Enforcement Directorate:The appellants alleged that the documents were tampered with by the officers of the Enforcement Directorate. The court examined the documents and found no evidence of tampering. The court accepted the explanation provided by the respondents and concluded that the allegations were unfounded and imaginary.Conclusion:The appeal was dismissed as the court found no merit in any of the contentions raised by the appellants. The search warrant and the warrant of authorization were held to be legal and justified. The allegations of personal malice and tampering with documents were found to be unsupported by evidence. The court upheld the procedural compliance with the relevant legal provisions and dismissed the appeal with no order as to costs.