VASNATAL RANCHHODDAS PATEL Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE three appeals have been heard together as they raise common questions of law and fact. On 23rd July, 1964 the Assistant Enforcement Officer, enforcement Directorate, obtained a search warrant from the Chief Presidency Magistrate, Bombay under Section 19 of the Foreign Exchange Regulation Act authorising him to search shop No. 157 situated at Mumbadevi Road, Bombay and seize incriminating documents, foreign exchange, instruments, account books, correspondence and passport, if any for the purpose of the enquiry into offences under Sections 4,5 and 9 of the said Act. In pursuance of this warrant, the Assistant Enforcement Officer, respondent No. 3,. accompanied by some other officers of the Enforcement Branch, searched the said premises on the same day. No incriminating documents or other materials were found. One V. R. Patel, who is the appellant in appeal No. 2 of 1965, was then present in the shop. He was searched in the presence of panchas and four packets containing diamonds, believed to be foreign cut diamonds, were found on his person. They were, therefore, seized. There was a safe in the shop the key of which was with the proprietor, who was not present the. The safe was,. therefore, sealed. One of the enforcement Officers then telephoned to a Custom Officer about the seizure of the diamonds. Two Custom Officers then went there, but as the panchanama had been already made and as the diamonds had been already taken charge of and also sealed, they did not themselves seize them. They, however, started holding investigation in regard to these diamonds. A summons under section 108 of the Customs Act was served upon the appellant and his statement was also recorded.

(2.) ON the following day, 24th July, 1964, the safe was opened. It was found to contain seven packets of diamonds and currency notes of the value of Rs. 24,055. All these articles were seized by the officers of the Enforcement Directorate. Out of these seven packets, one was claimed by J. C. Mehta, the appellant in appeal No. 3 of 1965 and five were claimed by J. A. Mehta, who is the appellant in appeal in appeal No. 5 of 1965. All the packets of diamonds remained in the custody of the Enforcement Directorate till 4th September. On that date two Custom Officers took charge of the diamonds from the Enforcement Directorate and Seized them under section 110 of the Customs Act. A receipt for the diamonds taken charge of was passed in favour of the Assistant Director of the Enforcement Directorate. It appears that, thereafter, in November, 1964 the three appellants as well as the proprietor of the shop Motiwalla were called by the Customs and in the presence of Motiwalla and the appellants in appeals Nos. 2 and 3 of 1965, the Custom Officers removed the seals placed on the packets by the Enforcement Directorate and re-sealed them by putting the seals of the Customs Department.

(3.) THE appellants then applied to the Chief Presidency Magistrate for orders directing the officers of the Enforcement Directorate to return the diamonds to them. It was urged on behalf of the Enforcement Directorate that the diamonds had not been seized in pursuance of the search warrant issued by the Chief Presidency Magistrate, but that they had been seized under section 151 of the Customs Act 1962 read with the notification issued by the Central Government on 23rd May 1964 and that on 4th September they had been taken charge of by the customs authorities. This contention was accepted by the Chief Presidency Magistrate who held that as the Customs Authorities had taken charge of the diamonds according to law, he could not order their return to the appellants. Thereafter, the appellants filed miscellaneous petition on the Original Side of the High Court against the union of India, the Deputy Director and another officer of the Enforcement Directorate respondents Nos. 2 and 3,and the Collector of Customs. In these petitions they prayed that the respondents should be directed to forthwith return and/or deliver the diamonds to them. These petitions were summarily dismissed. Against the orders dismissing the petitions the present three appeals have been filed.