1965 (12) TMI 20 - SC - Customs

Court dismisses appeals, upholds Customs Act search authorizations, finds initial seizure invalid.

The court dismissed all appeals, finding the initial search and seizure under Rule 126L(2) invalid but the subsequent seizure under Section 110(3) of the ... 'Proper Officer' — Connotation of — Seizure of documents — Physical possession not necessary — Searches — `Secreted' — Connotation of Issues Involved:1. Legality of search and seizure under Rule 126L(2) of the Defence of India (Amendment) Rules, 1963.2. Validity of seizure orders under Section 110(3) of the Customs Act, 1962.3. Whether the Collector of Customs is a 'proper officer' under the Customs Act.4. Legal possession and physical possession in the context of seizure.5. Relevance and utility of seized documents under the Customs Act.6. Legality of authorisation for search under Section 105 of the Customs Act.7. Interpretation of the term 'secreted' in Section 105 of the Customs Act.8. Requirement of specifying documents in search authorisation under Section 105 of the Customs Act.Issue-Wise Detailed Analysis:1. Legality of Search and Seizure under Rule 126L(2) of the Defence of India (Amendment) Rules, 1963The appellants contended that the order of search and seizure dated August 19, 1963, was illegal as the Excise authorities had no power to seize documents under Rule 126L(2) of the Defence of India (Amendment) Rules, 1963. The Rule only gives authority to seize any gold suspected to be in contravention of the Gold Control Rules, but there is no provision for the search or seizure of any documents. The respondents argued that the power to seize documents was implied under Rule 156, which grants ancillary powers for effective exercise of seizure. However, the court held that Rule 156 does not include the power of seizure of documents, which is an independent power. The court noted that Rule 126L(2) had not been amended to include seizure of documents, unlike Rule 126L(1) which had been amended to include such power.2. Validity of Seizure Orders under Section 110(3) of the Customs Act, 1962The court found that while the initial order of search and seizure under Rule 126L(2) was invalid, the documents were validly seized under Section 110(3) of the Customs Act by the Collector of Customs on September 11, 1963. Section 110(3) allows the proper officer to seize any documents or things useful for or relevant to any proceeding under the Customs Act. The court held that there was sufficient material to support the opinion of the Collector that the documents were relevant to the proceedings under the Customs Act.3. Whether the Collector of Customs is a 'Proper Officer' under the Customs ActThe appellants argued that the Collector of Customs was not a 'proper officer' within the meaning of the Act and thus had no authority to seize documents. The court rejected this contention, stating that the Collector of Customs, who had assigned the powers of a 'proper officer' to a subordinate officer, must himself be deemed to have the powers of a 'proper officer' under Section 110(3) of the Customs Act.4. Legal Possession and Physical Possession in the Context of SeizureThe appellants contended that the documents were not in physical possession of the Superintendent or the Assistant Collector when the seizure orders were passed. The court held that legal possession does not necessarily require physical possession. The documents were in the legal possession of the Superintendent, who had control over them even though they were temporarily sent to Delhi for translation. The court cited Mellish, L.J. in Ancona v. Rogers to support the view that legal possession can be maintained even when the documents are with a bailee for a specific purpose.5. Relevance and Utility of Seized Documents under the Customs ActThe appellants argued that there was no material to show that the documents seized were relevant or useful to the proceeding under the Customs Act. The court rejected this argument, citing the orders of the Collector and the statements of the Superintendent, which indicated that the documents were relevant to the proceedings under the Customs Act. The court found sufficient material to support the Collector's opinion under Section 110(3) of the Customs Act.6. Legality of Authorisation for Search under Section 105 of the Customs ActIn Civil Appeal No. 677 of 1965, the appellants contended that the authorisation for search was not legally valid as there was no averment by the Assistant Collector that the documents were 'secreted.' The court held that the word 'secreted' must be understood in the context of the section, meaning documents kept out of the normal place with a view to conceal them or likely to be secreted. The court found that the preliminary conditions required by Section 105 were satisfied.7. Interpretation of the Term 'Secreted' in Section 105 of the Customs ActThe court interpreted the term 'secreted' in Section 105 of the Customs Act to mean documents kept not in the normal or usual place with a view to conceal them or likely to be secreted. The court rejected the appellant's argument that the term meant hidden or concealed in a narrow sense.8. Requirement of Specifying Documents in Search Authorisation under Section 105 of the Customs ActThe appellants contended that the authorisation for search under Section 105 must specify the documents for which the search is to be made. The court rejected this argument, stating that the power of search under Section 105 is of a general character and not limited to specific documents. The court held that it is not possible to predict or know in advance what documents could be found and which of them may be useful or necessary for the proceedings. The court emphasized that the preliminary conditions required by Section 105 must be strictly satisfied before exercising the power of search.ConclusionThe court dismissed all the appeals, holding that the appellants had made out no case for the grant of a writ. The initial search and seizure under Rule 126L(2) was invalid, but the subsequent seizure under Section 110(3) of the Customs Act was valid. The court upheld the legality of the search authorisations under Section 105 of the Customs Act and rejected the appellants' contentions on all issues.