TaxTMI 
TaxTMI 
TaxTMI 
1954 (7) TMI 31
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.... full agreement with the decision. The Ordinance, having been promulgated between 27-6-1940 and 1-4-1946, was not subject to the limitation of six months' duration contained in Section 72 of Sch. IX of the Government of India Act, 1935. It was to remain in force so long as it was not repealed. 3. The second contention that the sanction was not proved no longer remains valid. We examined Sri O. P, Gupta, Assistant Secretary to Government of India, Finance Department. He proved the under a resolution dated 28-7-1939 of the Ministry of Home Department he was authorised to sign letters and orders issued on behalf of the Government of India, that the Government of India had received a precis of the case from the State Government and after considering the facts of the case had sanctioned prosecution of the applicant and others for the offence of Section 7 of the Ordinance and that the sanction sent to the State Government on 16-4-1947 was signed by him. He also stated that the Deputy Secretary of the Finance Department and an Officer of the Department of Law were consulted before the sanction was granted. 4. Another contention was that the sanction does not show the facts constitut....
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.... held high denomination notes had to do was to have them exchanged for notes of smaller denominations after fulfilling the conditions prescribed therefor. He had nothing to gain by not having them exchanged for notes of smaller denominations and instead transferring them to another person. A person also had nothing to gain by acquiring high denomination notes when they had ceased ;o be legal tender. Therefore, the restriction imposed by Section 4 of the Ordinance upon the power to transfer or to receive high denomination notes was not at all an unreasonable restriction; having regard to the emergency which justified the promulgation of the Ordinance, the restriction was undoubtedly reasonable. But really we are not concerned even with the question whether Sections 3 and 4 became void under Article 13 or not. The applicant has been convicted not for infringing the provisions of Ss. 3 and 4 but for violating the provisions of Section 6(2) by making a false or only partially true declaration. If Section 6 were unconstitutional, the applicant could not be prosecuted for violating its provisions. The constitutionality of Section G was not impugned and did not depend upon the constitut....
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....uthority, but because it had to be shown that the sanction was in respect of those facts and not some other facts. A general sanction would not do; the sanction had to be for the particular act alleged to have been done by the accused. Unless the sanction for doing an act, for doing, which the accused was placed on trial, was there, it could not be said that the prosecution was with previous sanction. Consequently -- 'Gokulchand Dwarkadas v. The King (B)' is no authority for the proposition that even it' it is shown that the sanction was for the act, for doing which he is tried, the prosecution must show that the allegations made against him were considered by the sanctioning authority. In the present case it has been shown that the sanction and the trial were for the acts done by the applicant and the other men; in other words, the prosecution of the four men was with previous sanction. The preliminary condition for the takings of cognizance against the four men having been satisfied, all that the Court had to sec was whether the offence was established against them or not. 7. Since there, is no law which expressly requires that the sanctioning authority must consid....
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.... pass an order of detention but also that lie should be satisfied that such order is necessary. The Ordinance requires only one act to be done by the Central Government, namely, that of sanctioning the prosecution. Since two acts are required to be done under the Preventive Detention Act, it may be argued that while one act may be done by an officer authorised by the Governor to do it, the other act, namely, that of being satisfied, must be done by the Governor himself; no such argument is possible in the present case where only one act is required to be done. The other is that the decision in that case depended upon the subsidiary rules of business made by the Orissa State Government, with which we have no concern in the present case. 9. In -- 'Emperor v. Sibnath Banerji MANU/PR/0024/1945, the Privy Council held that Rule 26, Defence of India Rules, which authorised the Central Government or the Provincial Government, "If it is satisfied with respect to any particular person.....", to pass an order of detention against him, did not require that the Governor must be personally satisfied. 10. Section 40 of the 9th Schedule of the Government of India Act laid down that "all or....
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....the Governor-General in Council and questioning it on. the ground that it was not duly made by him. Further in that case it was decided that the Court was not debarred from investigating the truth of a recital contained in the order. The applicant before us does not question the truth of any recital contained in the sanction. From the fact that he is not debarred from questioning the truth of any recital contained in the sanction, it does not follow that he is not debarred from questioning that the sanction was duly given. Article 166(2) usss language similar to that of Section 53, Government of India Act; therefore, the interpretation placed upon it by the Orissa High Court in 'Shyama Ghana Ray's case (D)' is of no assistance. I agree with my brother Mukerji that Section 40 is a complete-answer to this contention of the applicant. 11. The next contention is that the confiscation of the notes recovered from the temple treasury contravenes Article 19 of the Constitution. The order of confiscation was passed by the Courts below under Section 517, Cr. P. C. The Ordinance contains no provisions for confiscation or forfeiture and Section 517, Cr. P. C., being the only prov....
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....e double lock were not property "regarding which any offence appears to have been committed, or which has been used for the commission of any offence." The offence committed by the applicant was that he signed the declaration without being the owner and that he stated in it particulars which were false or were not believed by him to be true. Even if it is correct to say that the smaller denomination notes were not the property regarding which the offence was committed or which had been used for the commission of the offence, there is another circumstance on account of which the courts below could pass the order of forfeiture. They had the power to pass orders as they thought fit for the disposal, by confiscation or otherwise, of any property that was produced before them. It did not matter if the property had not been used for the commission of any offence or was not one regarding which any offence had been committed. The bare fact that it was produced by the police before them invested them with the authority to pass an order for its disposal. In what manner they should order it to be disposed of was within their discretion. They might abuse the discretion by ordering it to be....
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.... action in regard to certain monetary activities of the country and, therefore, an Ordinance called the High Denomination Bank Notes (Demonetisation) Ordinance was promulgated on 12-1-1946 by the Governor-General in exercise of the powers conferred upon him by Section 72, Government of India Act, as set forth in the 9th Schedule of that Act Section 6 of the Ordinance provided for the exchange of high denomination bank notes held by any one for notes of smaller denomination or for other valid legal tender. This section provided for the procedure that had to be undergone, if and when, a holder of a high denomination bank note wished to have it converted into equivalent monies. Section 6 provided for a declaration that the owner of a high denomination bank note was enjoined to make before he was entitled to have that note converted by the Reserve Bank of India; for the Reserve Bans of India was authorised to convert the high denomination bank note which had been demonetised by the Ordinance. Section 7 of the Ordinance provided for penalties that would be imposed for breaches of any of the provisions of the Ordinance. The same section by its Clause (3) provided as follows: "No pros....
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....e declaration which the applicant signed was in these words: "I hereby declare that the particulars furnished above are full, true and correct to the best of my/our knowledge and belief. I further declare that the bank notes tendered herewith belong to me/us and are not benami holdings." The 'applicant signed his name and described himself as mukhtar-e-am of Mahant Govind Das mahtamim Sri Rangji Temple, Brindaban. 22. The Imperial Bank received the application but did not forthwith determine to exchange the high denomination notes but the Agent of the Bank referred the matter to the Finance Department of the Government of India for orders. The Agent also sent a copy of his letter, which he addressed to the Government of India, to Mahant Govind Das. On 13-3-1946 the Imperial Bank, however, exchanged the high denomination bank notes and delivered to the applicant five hundred notes of the value of Rs. 100/- each. 23. It appears that on receipt of the letter of the Agent of the Imperial Bank, Drigpal Singh, one of the trustees, recorded the statements of the applicant and some others in respect of this transaction of exchanging the high denomination bank notes. The applicant ....
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....sanction which borne no signature; The prosecuting agency, however, rectified their error by withdrawing that charge-sheet and immediately putting in another charge-sheet accompanied by the properly signed sanction dated 16-4-1947. This was done on 29-9-1948. The charge-sheet was against four persons, Sridhar Acharya, Lakshmi Narain, Parshotam Das and Ram Lal Asthana (the applicant). Sridhar Acharya died during the pendency of the proceedings before the Magistrate, while Lakshmi Navaln and Parshotam Das were discharged by the Magistrate and a charge against the applicant alone was framed under Section 7(1) of the Ordinance on 9-4-1949. 25. Several defences were raised on behalf of the applicant before the trial Court. One such defence was that the sanction had not been proved in accordance with law and further that the sanction which had been produced in Court did not show that, the sanctioning authority had considered all the relevant facts before according sanction. This contention was raised before the Magistrate by the applicant on 6-7-1949. On the 12th of July, the Magistrate considered it proper to examine a C. I. D. Inspector under Section 540, Criminal P. C., in order to ....
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....e, to prove the sanction. The sanction bore the signature of Shri Gupta so that, 'prima facie', he was the appropriate person to prove the sanction. Shri Gupta stated that the papers, which had been sent to the Government of India by the U. P. Government, had been care- fully scrutinised and the facts which appeared on those documents, were considered by a number of officers before sanction was given for the prosecution of the applicant. Shri Gupta was unable to state, however, whether the then Deputy Secretary consulted higher officers of Government, or, even consulted the Governor-General himself before he accorded his approval to the proposal made by the witness for giving sanction. On behalf of the State, reliance was placed on Section 40 of the 9th Schedule of the Government of India Act, 1935, for the argument that the sanction, having been authenticated by an officer authorised to make such authentication, could not be challenged before a Court. 29. Section 40 of the 9th Schedule of the Gov- eminent of India Act, 1935, is in these words: "40 (1) All orders and other proceedings of the Governor-General in Council shall be expressed to be made by the Governor-Gener....
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....how that the sanction, which had been authenticated by Shri O. P. Gupta and had been exhibited in the case and made the basis of the pro-secution, had not been accorded by the Governor-General in Council. In -- 'Sibnath Banerji's case (E)', their Lordships of the Privy Council did not consider the provisions of Section 40 of the 9th Schedule but considered the provisions of Section 59(2), Government, of India Act, 1935. Section 59 of that Act is in these words: "59(2)-- Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor." Section 59 creates a bar to questioning the 'validity' of an order on the ground that such an order was not an order made by the Governor. Section 40(1), on the other hand, creates a bar in the way of the applicant from raising the question that the order, which was duly authenticated, had not been 'duly made' by the Governor-General....
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....l to accord the sanction. It was not contended that there were any pre-requisites to making the sanction by the Governor-General. What was challenged was that the sanction, which had been produced in the case, was not the sanction of the Governor-General in Council but was a sanction that had been given by some officer of Government. In my judgment, Section 40(1) of the 9th Schedule in terms applies to such a contingency and bars such an argument being raised. 31. It was next contended on behalf of the applicant that the Governor-General had no materials before him, on which he could accord a proper sanction. It was further argued that there was nothing in the sanction to indicate that the Governor-General considered the relevant facts of the case before he accorded the sanction, assuming that the sanction was accorded by the Governor-General in Council. Reliance was also placed on the case of MANU/PR/0147/1948'. In that case, the Privy Council had to interpret Clause 23 of the Cotton Cloth and Yarn (Control) Order, 1943, That Clause was in these words: "23. No prosecution for the contravention of any of the provisions of this Order shall be instituted without the previous s....
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....which the prosecution had been ordered. Therefore, it was necessary for the State to prove which particular declaration it was, in respect of which the sanction had been accorded, and this the State in this case has done so that there was no invalidity in the sanction. The evidence given by Shri O. P. Gupta also indicated that the sanctioning authority had all the material facts necessary for according the sanction before it. In my view, it was not necessary for the prosecution to prove that the material facts before the sanctioning authority were sufficient for according the sanction. According to the rules of business framed by the Governor-General, allocation, of duties was made between the various departments and officers serving in those departments. The allocation of these duties was evidenced by a publication called 'The Administrative Directory of the Government of India'. This Directory was produced before us and we found that, on page 125 of that Directory, currency matters were to be dealt with by the Deputy Secretary (P) through the Assistant Secretary (F). During the relevant period in question, Shri K. N. Kaul was the Deputy Secretary (P) and it was he who s....
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....necessary, a request for short time for production of any such material, it available. But the learned Advocate-General frankly pleaded his inability. It must, therefore, be taken as a fact that the Home Secretary had no such authority which would enable him to pass the orders now under challenge in purported reliance on Rule 2 of subsidiary rules of business." The position of an order of detention made under the Preventive Detention Act stands on a footing different from that of a sanction which has to be accorded under Section 7 (3) of Ordinance 3 of 1946. Under Section 7 (3). there was no question of there first being any 'satisfaction' in the sanctioning authority before according sanction so that there could be no question of the prosecution showing that the sanctioning authority had accorded the sanction after being satisfied on the facts and materials placed before it that sanction should be accorded. There were before the sanctioning authority all the relevant facts on which a sanction could be given. Therefore in my view, the sanction, that had been accorded and was made the basis of this prosecution, was beyond challenge. 33. The question whether the declarat....
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....licant did not or could not know that the high denomination bank notes, which he was tendering for exchange, were not the temple property. 34. Learned counsel for the applicant, although he raised an argument to the effect that, me Ordinance having lapsed before the prosecution had been launched, the conviction of the applicant under that Ordinance was illegal, did not press this argument before us in view of the decision which had been given in this very case by this Court in earlier proceedings. 35. Learned counsel argued that Sections 3 and 4 of the Ordinance were connscatory in nature and, therefore, they were void on account of the guarantee contained in Article 19 of the Constitution. Section 3 of the Ordinance was in these words: "3. On the expiry of the 12th day of January, 1946, all high denomination bank notes shall, notwithstanding anything contained in Section 26 of the Reserve Bank of India Act, 1934 (2 of 1934), cease to be legal tender in payment or on account at any place in British India." There was 'prima facie', therefore, nothing in Section 3 to make it confiscatory in its operation. Currency notes are token money and their validity as money is depe....
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....nd this prohibition was made, as I have already said, in the interest of the general public. In my view, therefore, the provisions of Sections 3 and 4 of the Ordinance were not in conflict with the guarantee given by the Constitution under Article 19. 37. The last major argument on behalf of the applicant was that the order of forfeiture or confiscation made by the Magistrate in respect of the currency notes of the value of Rs. 50,000/-was unjustified. It is clear that there is no provision in the Ordinance fur confiscation either of the high denomination notes or me equivalent thereof. The Ordinance only prescribes punishment for any breach of any of the conditions provided for by the Ordinance. The order of confiscation was made by the Magistrate apparently because the Magistrate took the view that the sum of Rs. 50,000/- which was recovered from the treasury of the temple, was money obtained by changing the fifty high denomination bank notes improperly through the agency of the Imperial Bank of India. It is clear that the applicant did not lay any claim to these fifty thousand rupees himself. On behalf of the temple, no one has come forward to claim this sum of Rs. 50,000/- b....
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....r of the Magistrate to order disposal either by destruction, confiscation or otherwise of property comes into play even when the property is just produced before him irrespective of the fact whether any allegation that any offence in respect of that property has been committed or that property has been used for the commission of that offence is made or not. The explanation to the section makes it clear that the word 'property' in the section includes not only the original property regarding which an offence appears to have been committed but also any property which has come into being as a substitute of that property. The high denomination bank notes in this case were the subject-matter of the offence, in essence; in essence also, the high denomination bank notes were used for purposes of committing an offence, or, in respect of which an offence had been committed by the applicant. According to the prosecution, the notes, which were ordered to be confiscated, had been converted or exchanged for the high denomination bank notes and, therefore, an order in respect of those notes could be made in the same manner in which an order could have been made in respect of the high de....