TaxTMI 
TaxTMI 
1984 (2) TMI 229
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....s against these two persons are distinct and independent but the petitions are being dealt with by a common order as the controversies are common. 2. Both the petitioners were granted anticipatory bail by the learned Addl. Sessions Judge, after he was satisfied that, according to the authorities under the Foreign Exchange Regulation Act, their dealings and conduct involving contravention of certain provisions of the Foreign Exchange Regulation Act were under investigation. Both the petitioners were directed to present themselves for interrogation before the concerned authority. Some of their records had also been earlier seized by the authorities. Both of them participated in the aforesaid proceedings and either made oral statements to the officers entrusted with the proceedings or gave a written statement purporting to answer questions put to them in the course of interrogation. In the course of proceedings, certain controversies arose with regard to the rights, privileges and procedural safeguards to which they may be entitled at that stage and since some of these were denied to them primarily on the ground that they had not until then been formally accused of an offence, t....
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....gn Exchange Regulation Act. 4. I have heard learned Counsel for the parties at considerable length. While Councel for the petitioners, by and large, relied on the doctrine of "due process" embodied in the United States Constitution and interpreted in the United States as guaranteeing to an accused person, fair procedure at the investigation, enquiry as well as trial stages and sought the extension of the safeguards available to a person accused of an offence in the course of investigation governed by the provisions of the Code of Criminal Procedure, and otherwise as an emanation of the doctrine of "just, fair and reasonable" procedure, enunciated by the Supreme Court in the case of Maneka Gandhi v. Union of India AIR 1978 S.C. 597, in interpreting articles 14, 19 and 21 of the Constitution of India, to the present investigation, these safeguards were sought to be denied to the petitioners on the ground that in the absence of a formal accusation against the petitioners, the petitioners were not entitled either to the constitutional protection against self-incrimination nor to the other safeguards available to an accused in an investigation, governed by the Code of Criminal Pro....
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....me ensure that the suspect is dealt with in a humane manner, strictly in accordance with the letter and spirit of the law and is not subjected to physical or mental torture, harassment, inconvenience, pressure or to any other adverse circumstance which may create an adverse environment for the enquiry or investigation and enable the state to take undue and unfair advantage of the legal constraint in which the law places the suspect. The third facet has relation to the right or prerogative of a legal practitioner, as distinct from the right of a person whom he may represent, to appear in any court or in any judicial proceedings or before any officer charged with the duty to hold an enquiry or investigation. 6. Article 22 of the Constitution of India inter alia, guarantees to a person who is arrested of "right to consult, and to be defended by a legal practitioner of his choice". While the right to be defended may have relation to the proceedings at a trial, in a court of law, or departmental adjudication, the expression "right to consult" appear to be much wider in its amplitude than the right to be defended and would include the right to the presence of Councel in the course ....
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....of them. The corresponding provision of the Customs Act is another. In that case, the Court examined the right to the presence of Councel at the time of interrogation in the context of article 20(3) and article 22(1) where investigation was regulated by the provisions of the Code of Criminal Procedure. The protection of article 20(3) of the Constitution no doubt would not be available to a suspect in an enquiry or investigation under section 40 of the Foreign Exchange Regulation Act until he has been formally accused and that is what the Supreme Court, Ramesh Chandra Mehta v. State of West Bengal, AIR 1970 S.C. 940, has held in a number of cases on a narrow construction of the expression "person accused of any offence", used in the said article. The Court quoted with approval the observations of Das Gupta, J., in his dissenting opinion in the case of State of Bombay v. Kathi Kalu Oghad, AIR 1961 S.C. 1808, and observed that; 'Third degree' is an easy temptation where the pressure to detect is heavy, the cerebration involved is hard and the resort to torture may yield high dividends." These observations were made in the context of a Rule against self-incrimination but would be equ....
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....spelt out of article 22(1) of the Constitution. This is a right which cannot, therefore, be denied to a suspect, even though the Councel's presence would not imply a right of hearing or entitle the Councel to interfere in the course of investigation or to entitle the suspect to cause delay or obstruction of proceedings, merely because the Councel may not be available at a particular point of time. 9. But even apart from article 22(1) of the Constitution and in situations to which the article does not, in terms, apply, there is no doubt a right to presence of Councel in an enquiry or investigation under the Foreign Exchange Regulation Act on the simple ground that in the absence of any provision to the contrary in the Act, such a right would naturally flow from the duty of the authorities under the Act to follow only such procedure in a matter which may involve the deprivation of personal liberty which is "just, fair and reasonable". The divergent procedure of investigation provided by the Foreign Exchange Regulation Act, which has the effect of divesting a suspect of certain rights, privileges and safeguards, which are available in a corresponding investigation under the Code....
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....rdance with law, and where the system is pervaded by the Rule of law, there can be no relaxation of the Rule even in the case of worst criminals. It is difficult to ignore that the manner in which a society or a system deals with its dissenters, as also its criminals, is a true measure of its civilisation and reasonableness. As for the right of Councel to appear in an enquiry or investigation, the question has also to be answered in the affirmative. Section 30 of the Advocates Act entitles an advocate to practise, inter alia, before any Tribunal or "person legally authorised to take evidence". Sub-section (4) of section 40 no doubt provides that "every such investigation or proceeding as aforesaid shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of I860)". The marginal heading of the section runs thus : "Power to summon persons to give evidence and produce document". It is, however, difficult to ignore that section 33 to section 40 of the Foreign Exchange Regulation Act provide for preliminary enquiry and investigation intended to collect material in aid of any possible departmental adjudication or institution of a....
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.... person who is legally authorised to take evidence. It is no doubt true that section 40 does not empower the officer concerned to administer oath nor are the provisions of the Indian Oaths Act attracted to such proceedings, as held by the Supreme Court in the case of Hira H. Advani, AIR 1971 S.C. 44, but that, to my mind, would not make any difference because the sub-section imposes a statutory duty to state the truth and any variation from the truth, as indeed any obstruction to the compliance of the summons, is made punishable under sections 193 and 228 of the Indian Penal Code. If the person so summoned be held bound to make a statement, prima facie he would also be liable under section 179 of the Indian Penal Code, if he refused to make a statement. It would thus appear that an advocate would be entitled, as of right, to appear before an authority under section 40 of the Act even independently of the right of the suspect to Councel, even though in actual practice it may be difficult to delink the two distinct rights. (b) Right to silence and Rule against self-incrimination. "Maunam Pandita Lakshanam", say the scriptures. 10. It means : silence is an insignia of a wise ma....
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....e compelled to be a witness against himself. While the expression "person accused of any offence" has been narrowly construed to mean a person against whom a formal accusation has been made either in a first information report or in a complaint made to a Magistrate, the expression "witness against himself" has been widely construed to bring within its mischief not only the evidence at the trial but statement or other material obtained at the stage of investigation as well. A series of decisions of the highest Court have denied the protection of the Rule against self-incrimination where the person who is sought to be examined was not formally accused of an offence although such an accusation may be imminent, and the person may even be arrested and be kept in detention. An attempt was made in the case of Nandini Satpathi, AIR 1978 S.C. 1025, to widen the area of protection so as to bring within the Rule, "potential accused" "suspect accused" or a person, who having regard to the circumstances was described as a "candidate for an accusation". Krishna lyer, J., who spoke for a three-Judge Bench in that case, referred to the earlier decisions of the Supreme Court, giving a restricted me....
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....rding to the section "shall attend as so required". Section 161 which, according to its marginal note, deals with "examination of witnesses by police" and empowers a police officer concerned to "examine orally any person supposed to be acquainted with the facts and circumstances of the case". Sub-section (2) of this section provides that "such person shall be bound to answer truly all questions relating to such case put to him by such officer other than questions the answers to which would have a tendancy to expose him to a criminal charge or to a penalty or forfeiture." (emphasis supplied). Sub-section (3) of this section empowers the police officer concerned to reduce to writing any statement made to him in the course of examination under the section. This is followed by section 162 which, according to its marginal note, deals with "statements to police not to be signed : use of statements in evidence". This section provides that no statement made by any person to a police officer in the course of an investigation "under this Chapter" shall be signed by a person making it and restricts the use of the statement only for the purpose of contradicting a witness at the trial. Sub-sect....
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....tion conferred under section 157 of the Code, a witness could be summoned only under section 160 of the Code and be examined under section 161 of the Code. Section 162 is, however, a composite section, which unlike the two sections preceding it, does not refer in its marginal note to attendance or examination of witnesses but deals with all statements "made by any person to a police officer in the course of an investigation under this Chapter". The expression "under this Chapter" is also wide enough to take in section 157 of the Code. Prima facie, therefore, section 162 covers not only statements of witnesses recorded under section 161, who were summoned under section 160 but also the result of interrogation of an accused person pursuant to power under section 157 of the Code, and that is probably the reason that the Privy Council found section 162 to be wide enough to cover all the statements so long as they were statements made to a police officer in the course of an investigation under Chapter XII. Section 162 is not confined to statements made under section 161 only. Following this decision, the Code was amended in the year 1941 to give effect to the observations of the Privy C....
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....he mandate of articles 14 and 19 and article 21 of the Constitution. It has, therefore, been held that the expression "procedure established by law" must mean not any procedure sanctioned by law but a "procedure which is just, fair and reasonable" and that such procedure must be procedure established by a "valid" law [Maneka Gandhi v. Union of India AIR 1978 S.C. 567 J. It has further been held that reasonableness is an attribute of right to equality guaranteed by article 14 of the Constitution. It has further been recognised that any law which authorises the deprivation of life or personal liberty must be a valid law in that it not only satisfies the requirements of the other fundamental rights but also embodies a procedure which is just, fair and reasonable. This approach widens, to an extent, the horizon of judicial control of legislative action beyond the traditional test of vires. 16. Certain safeguards are provided by the Evidence Act. Section 24 of the Evidence Act makes a confession, caused by inducement, threat or promise irrelevant in criminal proceedings, in certain circumstances. Section 25 provides that no confession made to a "police officer" can be proved as ag....
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....and referred to above, including the qualified right to silence, the Rule against self-incrimination embodied in sub-section (2) of section 161, the bar against the use of any statement recorded in the course of investigation embodied in section 162, and he salutary provisions contained in section 164 with regard to confessions. This exclusion is based on the obvious reason that the investigation into the conduct of such a person does not attract at that stage the provisions of the Code of Criminal Procedure and that these provisions are, therefore, not applicable to him by virtue of the fact that the two special statutes provide a different procedure and would, therefore, except such investigation from the operation of the Code by virtue of sub-section (2) of section 4 thereof. Such a person would also not be entitled to the protection, even at the trial, of sections 25 and 26 on the ground that the officers under these two statues are not "police officers" in that, even if they have some of the powers of a police officer and. certain other attributes of a police officer, they do not enjoy the power to make a report on the conclusion of investigation under section 173 of the Code.....
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....olly self-incriminating, could be used as evidence against him in the departmental proceedings as also at the trial, if any. Such person would nevertheless be entitled to call in aid section 24 of the Evidence Act, if and when the matter goes to a Court and if the making of the statement, if it amounts to a confession, appears to the Court to have been caused by any inducement, threat or promise proceeding from a person in authority and sufficient in the opinion of the Court to give the accused grounds which would appear to him reasonable for supposing that by making it he would gain any advantage and avoid any evil of a temporal nature in reference to the proceedings against him. If the conditions of this section are satisfied, such a self-incriminating statement would be excluded. 18. There is an aspect of right to silence, independently of the constitutional protection, under section 40 of the Act which presents some difficulty. This is how the section runs: "Power to summon persons to give evidence and produce documents. - (1) Any gazetted officer of enforcement shall have power to summon any person whose attendance he considers necessary e....
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....d upon by the Courts. Another way to look at the sub-section would be that the obligation to "state the truth" is a composite obligation, including the duty to state, i.e., to make a statement, and secondly, the duty that what he states is the truth and in that sense this part of the phraseology of sub-section (3) of section 40 would convey the same sense as does the first part of sub-section (2) of section 161. This interpretation finds some support from the fact that under section 179 of the Indian Penal Code, any one legally bound to "state the truth" renders himself liable to punishment if he "refuses to answer any question demanded of him touching that subject by such public servant in the exercise of the legal powers of such public servant". The expression "legally bound to" used in section 179, however, raises some doubts because this expression has been defined by section 43 of the Indian Penal Code as being "what it is illegal in him to omit". This would be open to the interpretation that the suspect would be liable under section 179 only if independently of section 179, it was illegal for him to omit to state the truth. This would appear to envisage that there must be som....
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....." This decision may be an authority for the proposition that a person summoned was bound to make a statement and also to state it truthfully. It may also be taken as an authority for the proposition that if such a person does not answer he would render himself liable to be prosecuted under section 228 of the Indian Penal Code, as if he was causing "obstruction" to an officer conducting judicial proceedings. In the same volume at page 44, is a report of another decision of the Supreme Court in the case of Hira H. Advani v. State of Maharashtra, AIR 1971 S.C. 44. This is by a larger Bench. The question before the Court was as to the admissibility in evidence against to maker of a statement under section 171 A of the Sea Customs Act, Corresponding the section 108 of the Customs Act, in criminal proceedings. The Court also considered the applicability to proceedings under the Customs Act of sections 4 and 132 of the Evidence Act. A contention was raised on behalf of the appellant that the object of an enquiry under section 171 A was to find out and establish the moral liability of the person making the statement", i.e., whether he had committed an offence or not, and as such, the enqu....
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....section 179 of the Indian Penal Code, irrespective of whether it would be attracted or not, if there is a refusal to answer a question, and this is a question which has not arisen in the present cases. The Supreme Court, with respect, appears to have rightly held in the case of Percy Rustomji Basta v. State of Maharashtra, AIR 1971 S.C. 1087, that such a person is bound to answer and if he made a false statement, he would be liable to be punished under section 193 of the Indian Penal Code. I am, however, not concerned with the question if refusal to answer would render such a person liable to be prosecuted under section 228 of the Indian Penal Code, a view also expressed by the Court in that case. The decision to the contrary in the case of Hira H. Advani v. State of Maharashtra, AIR 1971 S.C. 44, is by a larger Bench of the Supreme Court and ordinarily I would be bound to follow that decision but the decision in the case of Basta, AIR 1971 S.C. 1087 : (1971) Suppl S.C.R 35 is fully reinforced by a more recent decision in the case of Nandini Satpathy, AIR 1978 S.C. 1025 by a Bench of three judges even though dealing with the language of subsection (2) of section 161. If the two exp....
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.... in the same position as a person against whom no formal accusation had been made but the protection against self-incrimination was not conceded in that case in relation to these allegations on the basis of the constitutional guarantee against self-incrimination but on the basis of clear provision of sub-section (2) of section 161, and this section makes no distinction if a person is a mere witness, a suspect or an accused or a person, though then a mere witness or a suspect, may eventually be an accused. The protection of sub-section (2) of section 161 would, however, obviously not be available to the petitioners in the present case, because at the present stage of investigation under the Foreign Exchange Regulation Act, the code is inapplicable except to the limited extent it has been made applicable by that Act for the purpose of remand and/or bail, a question with which I am not concerned in the present case and which has otherwise presented considerable difficulty and led to an anomalous position. 23. However, taking his cue from the concept of justness, fairness and reasonableness of a procedure as a necessary condition for its validity, enunciated by the Supreme Court ....
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.... and large, subject to judicial review and legislative action is no exception. It is also well recognised, as an essential attribute of Rule of law, that all state action must not only conform to the constitutional and statutory constraints but must also be "just, fair and reasonable". In this sense, judicial control of legislative action is not confined to the traditional limit of legislative competence but extends to a judicial examination of the reasonableness of legislative action. In the context of articles 14 and 21 of the Constitution, any procedure prescribed for deprivation of personal liberty should satisfy the constitutional requirement of being just, fair and reasonable. Whether a procedure prescribed by law is just, fair and reasonable in the context of the overall circumstances, is in the ultimate analysis, to be judicially Ruled, even though the legislative view with regard to the criteria would not be substituted by the Court for its own if it is based on a possible view of the matter. It is no doubt true that some of the basic safeguards, rights and privileges of an accused person should not be dispensed with, however grave may be the charge forming the subject-mat....
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....e examined, that if he made a statement, it could be used against him. (c) Compulsion to make a written statement. 26. There is nothing in section 40 of the Foreign Exchange Regulation Act which may bind a person summoned under sub-section (3) of that section to make a statement in writing. Such a person is bound to "state the truth" upon any subject respecting which he is "examined" or "make statements". The expression "examined" has reference to the interrogation or questions that may be put to such a person and "make statements" has reference to what he may have to state either in answer to the question or on his own. Such a person no doubt would be at liberty to write out a statement, if he so chooses, but there is nothing in the section which may compel a person to make a statement in his own handwriting. To require a person to write a statement in his handwriting would be tantamount to asking him to "prepare a document" as distinct from "producing a document". The person can be required to produce a document but there is no power to require him to compile a document. It is no doubt true that the authorities prefer a statement in the hand of the suspect so as to guard a....
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....law flows from the right of an accused to a fair trial and the right to receive copies of all such statements at that stage could not be denied to an accused even where such a right may not necessarily flow from the provisions of the Code of Criminal Procedure. Thus, a right to receive copies of statements was conceded in the case of Satyen Bhowmic,(1981) 2 S.C.R 661 : AIR 1981 S.C. 917, even though it was a case of a complaint under the provisions of the Official Secrets Act, and the provisions of section 207 of the Code of Criminal Procedure were not attracted. On the same principle, the right to receive copies had been conceded when a show-cause notice had been issued to the suspect. But there is no such right in the course of investigation. Section 76 of the Evidence Act no doubt enjoins that the public officer having the custody of a public document, which any person has a right to inspect, shall give on demand a copy of it but as pointed out earlier, the Evidence Act, applies to all "judicial proceedings in or before any Court" and until the proceedings are in or before any court, the provision of this section also could not be invoked. It is no doubt true that the provisions....