MOHAMMAD AJMAL MAJOR Vs. ASSISTANT DIRECTOR ENFORCEMENT DIRECTORATE

JUDGEMENT

(1.) The petitioner, who claims to be a permanent resident of Bhatkal, has filed this petition for quashing the seizure of India currency of Rs. 5,55,000/- by the second respondent under seizure proceedings drawn on 4-4-1989 (Annexure-0) contending that such seizure amounts to re-seizure which is illegal and without jurisdiction. He also seek a direction to respondents 1 and 2 to release and deliver bank to the petitioner the said currency of Rs. 5,55,000/- seized under mahazar dated 4-4-1989, on the ground that it is retained illegally and without jurisdiction.

(2.) It is necessary to refer to the facts leading to the impugned seizure.2.1. The petitioner claims that he travelled from Bombay to Bhatkal by a Maharashtra Luxury Bus and got down at Bhatkal on 18-2-1986 at about 19-15 hours, with three packages. When he got down from the bus, certain Officers of the Customs Department approached him and asked his name and address; petitioner furnished them and also produced two tickets showing his travel from Bombay to Bhatkal Thereupon the Superintendent of Customs informed the petitioner that he had reasonable belief that he was carrying smuggled goods and he was therefore asked to accompany them to the Customs Office for detailed examination and search. On search by the Customs Superintendent at the Customs Office, it was found that the two card board packages carried by the petitioner contained Homeopathic medicines and personal articles of domestic use and nothing else. The third package (a sack hand bag) that was being carried by the petitioner contained Indian currency notes of the value of Rs. 5,55,000/-, wrapped in old news papers. Petitioner claims that he had explained to the Customs Officials that the amount had been received as a loan at Bombay to be handed over to his father at Bhatkal. However, the Superintendent of Customs seized the currency notes of Rs. 5,55,000/- on the ground that they were unaccounted and petitioner had failed to produce proof for valid possession of such amount. The seizure was effected under Mahazar dated 18-2-1986 (Annexure-A).2.2. On 20-2-1986, the first respondent, who is an Assistant Director in the Enforcement 'Directorate, Bangalore, purporting to exercise his powers under Section 38 of the Foreign Exchange Regulation Act, 1973, ('Act' or 'FERA' for short) seized the said Indian Currency of Rs. 5,55,000/- and documents from the possession of Superintendent of Customs, Anti Smuggling Unit, Bhatkal, under another Mahazar dated 20-2-1986 (Annexure-B), being under the belief that the same will be useful for and relevant to the investigation being made under FERA. In pursuance of it, the first respondent issued a show-cause notice (memorandum) dated 27-10-1986 (Annexure L) calling upon the petitioner to show-cause why adjudication proceedings as contemplated in Section 51 of the Act should not be held against the petitioner for the contravention alleged therein and why the Indian currency of Rs. 5,55,000/- seized on 20-2-1986 being the amount involved in the contravention should not be confiscated under Section 63 of the Act. It is alleged in the said memorandum that petitioner had received a sum of Rs. 6,00,000/- from a person, other than an authorised dealer in foreign exchange, by order or on behalf of a person resident outside India, without the general or special permission of Reserve Bank of India in contravention of Section 9(1)(b) and had paid Rs. 40,000/- out of it to persons in India by order of or on behalf of a person residing outside India and thereby contravened Section 9(1)(d). It is stated that the said proceedings for confiscation is still pending.2.3. In the meanwhile, the petitioner challenged the seizure made on 18-2-1986 by the Superintendent of Customs and the seizure dated 20-2-1986 by the first respondent, in W.P. No. 18180/1986 and sought release and delivery of the amount. This Court allowed the said petition by order dated 4-1-1989 (Annexure-M) and quashed the seizures dated 18-2-1986 and 20-2-1986. In regard to the first seizure dated 18-2-1986, this Court held that as no notice was given under Section 124(a) of the Customs Act, 1962, informing the grounds on which it was proposed to confiscate the currency, within six months of the seizure, the person from whom the currency was seized became entitled for the return of the same, under Section 110(2) of the Customs Act, 1962. In regard to the seizure by the first respondent on 20-2-1986 this Court held, relying on the decisions of the Supreme Court in Gian Chand v. State of Punjab, AIR 1962 SC 496 : (1962 (1) Cri LJ 485) and C.I.T. v. Tarsen Kumar, (1986) 161 ITR 505 : (AIR 1986 SC 1477) that seizure means taking possession against the will of the person possessing the property, and at the time of seizure on 20-2-1986, as the Indian currency had already been seized by the customs officials and was in the custody of the customs department, the said currency notes could not be once again seized and therefore the second seizure was illegal. Consequently, this Court quashed the mahazar dated 20-2-1986 and directed the first respondent herein to return the money to the person from whom it had been taken possession (that is the Superintendent of Customs Anti-smuggling Unit, Bhatkal). This Court also held that the petitioner was entitled to receive the currency notes from the Superintendent of Customs, on the same being redelivered by the Enforcement Directorate subject however to the following observations :

(3.) The learned counsel for the petitioner urged the following two contentions :(a) The seizure under Annexure 'O' dated 4-4-1989 amounted to re-seizure; and it violated the fundamental rights of the petitioner under Article 19(1)(f) of the Constitution of India and contravened the decision of the Division Bench of this Court in W.A. 356/1989; and(b) The seizure was not in accordance with Section 38 of the Act.