A MALLICK Vs. ASSISTANT DIRECTOR ENFORCEMENT DIRECTORATE CHENNAI

JUDGEMENT

(1.) THIS revision is against the concurrent findings of the learned Principal Sessions Judge, Madras, in Cr. Appeal No.97 of 1992 confirming the conviction and sentence passed by the Additional Chief Metropolitan Magistrate, Egmore, Madras in E.O.C.C.No.812 of 1985. for the offences under Sec.9(1)(b) and 9(1) (d) read with Sec.56 of the Foreign Exchange Regulation Act, 1973, hereinafter to be referred to as the Act, to undergo rigorous imprisonment for six months for each of the offences.

(2.) THE facts in brief are as follows: THE revision petitioner is resident of Madras and he is running a grocery shop at No.89,Arunachala Naicken Street,Chintadripet.Chennai, and a video cassette shop in No.37,Meeran Sahib Street,Chennai. On 11.7.1983, the officers of the Enforcement Directorate viz., P.W.1 and one Viswanathan conducted search simultaneously in the house as well as the grocery shop of the accused/revision petitioner. P.W.1 who conducted the search in the house of the revision petitioner, was able to seize certain documents and letter in the presence of the witnesses under the mahazar Ex.P-2. THE other Officer who conducted the search in the shop was able to seize certain documents including a diary under Ex.P-1 mahazar in the presence of the witnesses. THE revision petitioner was absent on the date of the search and he was called to explain as to the contents of the documents seized from his house and the shop. On 17.9.1983. the revision petitioner appeared before the Enforcement Directorate and gave the statement by his own hand under Ex.P-4 explaining the contents of the documents seized from his house. Again, for clarification, he was asked to appear on 19.9.1983. On 19.9.1983 also he appeared before P.W.1, the Enforcement Officer and gave the statement Ex.P-6. THE Department, from his statement as well as from the documents seized from the house of the accused, was able to find out that the revision petitioner had violated the provisions of the Act by receiving money from the foreign countries namely from Malayasia and Singapore without proper authorisation. THErefore, the Assistant Director of Enforcement filed the complaint under the above provisions before the Additional Chief Metropolitan Magistrate (Economic Offences) for trial of the accused for violation of the provisions of law. P.W.1 was examined to prove the searches conducted in the shop as well as the residence of the revision petitioner and also to prove the statements Exs.P-2 to P-5 made by the revision petitioner.

(3.) THE learned counsel for the revision petitioner took up the next contention with regard to the search made by P.W.1 under Sec.37 of the Act. According to the learned counsel, the two conditions are that the Officer authorised alone shall conduct the search and before such search, the concerned Officer, who authorised to conduct the search, must have the reason to believe that it would be useful or relevant for investigation or any proceedings to conduct such a search and unless these conditions are satisfied, the search will be illegal and the court cannot act upon it. With regard to the second requirement. Which he referred to viz., the reason to believe for conducting the search, the learned counsel would submit that P.W.1 has not stated anywhere that what were the grounds, which the Assistant Director had thought fit to conduct the search and even though such reasons have not been recorded in the search list, at least P.W.1 could have mentioned on what basis, the Assistant Director had the reason for ordering such search and this has not been satisfied by the prosecution in the evidence. THE learned counsel has cited a serious of decisions in support of his argument that without satisfying this requirement as to the reason for conducting the search, the search becomes illegal. He relies upon a decision of this Court in Appavu Gounder v. Collector of South Arcot Appavu Gounder v. Collector of South Arcot , 1981 L.W. (Crl) 223 arising under the Tamil Nadu Paddy and Rice Regulation of Trade Order, 1974, wherein the Assistant Collector had not stated in his report the requirement as laid down in clause 25 of the order that he had reason to believe that any contravention of the order had been committed or was being committed or was about to be committed and without satisfying that he inspected the books of account and this Court has held that he had not satisfied the requirement of law viz. the reason to believe as aforesaid, and therefore, the inspection was illegal. THE learned counsel for the revision petitioner refers to another decision of the Apex Court in K.L.Subhayya v. State of Karnataka K.L.Subhayya v. State of Karnataka , A.I.R. 1979 S.C. 711 which relates to the search under Sec.57 of the Mysore Excise Act. THE Apex Court has observed, when the Sec.53 and 54 of that Act have introduced as a valuable safeguard for the liberty of the citizens in order to protect them from illfounded or frivolous prosecution or harassment, the Inspector, who had searched the car of the accused, had not made any record of any ground on the basis of which he had reasonable belief that any offence under Act was being committed before proceeding to search the car and therefore, in that case also, it was found that the search was illegal. In another decision of the Calcutta High Court in Assistant Customs Controller v. N.C.Jute Mills Assistant Customs Controller v. N.C.Jute Mills , A.I.R 1973 Cal. 91 the Bench of the Calcutta High Court has observed that when the words "the Officer has reasons to believe" suggest that the belief must be that of an honest and reasonable person based upon relevant materials and circumstances and although it is not necessary for the Assistant Collector to state the reason for his belief, he must disclose the materials upon which the belief was formed. It is true, such a view has been taken by the Apex Court and also the other High Courts in the last decade but some of the Benches of the Apex Court have taken a different view and the latest view of the Apex Court is that even if the search was illegal, when the materials have been seized by the prosecuting agency, the same cannot be shut out in the evidence.