LexDR. PARTAP SINGH AND ANR. versus DIRECTOR OF ENFORCEMENT, FOREIGN EXCHANGE REGULATION ACT AND ORS.
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. . DR. PARTA!' SINGH AND ANR. v • DIRECTOR OF ENFORCEMENT, FOREIGN EXCHANGE REGULATION ACT AND ORS. Apr;/ 26, 1985 [D.A. DESAI AND V. BALAKRISHNA ERADI, JJ.] 969. , .,, Foreign Exchange Regulation Act 1973, section 37 and Code of Cri- minal Procedure, sectlon 165-Seareh warrant-Issuance of-Officer whether obliged to record. in writing the grounds for his belief before is.ru1nce-'Rea~on to belleve 9-What is-Whether groundS inducing 'reasonable beUef, tO bC stated in search warrant..:.:..Whethe.r open to judicial scruti11y. •. Foreign Exchange Regulation Act, section 37, 38 aud 41::.._Sear'lh and Seizure-I/legality of-Whether would render seizure pursuant to illegal search invalid-Evidence collected during illegal search.:.....court to be cautiOus in assessmenl. A . n c D Income Tax Act 1961, section 132 A-Warrant ofauthOrisariOn ·ro seal E documents artlde1 $eeized . during the !learch under section 37 of the FOreign Exchange Regulation Act, 1973-Whether could be returned. Word!! and ,hrase!l-•eaning of-'Reason to belie11e' and 'so far as 1nay be'-Meanlng al-Section 37 (J) and Section 37 (2) of FER-4 1973. F The appe11ants husband and wife moved the High Court under· Arti_cle · ' · 226 for quashing of a search warrant' issued by respondent No. 2-Assistant Director, Enforcement, as also the warrant of authorisation issued by respon- dent No. 5-Commissioner of Income Tax and for a direction to return articles seized during the search of their house and for relief incidental an·d ancillary thereto! The appellants alleged that respondent No. 6-an Assistant Com- missioner of Income Tax, bore personal malice towards them, attributable lo· G an inciden.t concerning the servant Of .the appellants and an application for' transfer of appeals pending before him was made to the Chairman Central Board ef Direct Taxes by the first appellant. Actuated by this personai malice, respondent No. 6 first instigated respondent No. 2 to issue a search \\'.arrant under the authority ·of which a raid was carri~d out at tbe residence of the appellants wh~ch led to the seizwe of certain documents including some foreign currency. Thereafter when the appellants made various repre- sentations for return of documents, again instigated by respondent No." 6, , H A B c D E F G H 970 SUPREME COURT REPORTS (1985] 3 s.c.a. respondent No. 5 issued a warrant of authorisation under section 132 A of the Income Tax Act directing respondent No. 2 to deliver such books of accounts and other documents and goods seized during the search to the reciuisiti9ning officer. The documents and material seized during the search had not been returned. The High Court held that there was nothing illegal in the issuance of the search warrant, the consequent search, the seizure during the search and taking over of the docum~ts by the Income Tax. Department under Section 132-A and dismissed the petition. In the appeal to this Court it was contended by the first appellant : (i) that rcspondCnt No. 2 acted in a manner contrary to law in issuing a sc.arch warrant without any material before him on which he could entertain a reasonable belief that any documents which in bis opinion will be useful for, or~retevant to, in investigation or proceedings under Forei~n Exchange Regu- lation Act, 1973 are secreted in any place and (ii) that as the second respon- dent did· not record his reasons in writing on which reasonable belief was cntcrtairied, the search warrant issued by hicri was illegal. Dismissing the appeal, HELD : 1. When an officer of the Enforcement Department proposes ·to act under section 37 he must have reason to believe that the docu nents useful for investigation or proceeding under the Act arc secreted, The materi- al on which the belief is grounded may be secret, may be obtained through intelligence o·r occasionally may be conveyed orally by informants. It is not obligatory upon the officer to disclose his material on the mere allegation that there was no material before him on which his reason to believe can be grounded. Whether these grounds are adequate or not is not a matter for the Court io investigate. [079F-H; 977A·C] S. Narayanappa v. Commissioner of Income Tax, Bonga/ore, [1967] I SCR 590 relied upon. 2. The expression 'reason to believe• is not synonymous with subjective satisfaction of the Officer. The belief must be held in good faith; it cannot be merely-be a pretence. It
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