Holding

A search warrant under Section 37 FER Act is valid if the officer had material to form a reasonable belief, even if the grounds are not recorded in writing or stated in the warrant, and illegality of the search does not compel return of seized documents.

Summary

Dr. Partap Singh and his wife challenged the validity of a search warrant issued by an Assistant Director of Enforcement under Section 37 of the Foreign Exchange Regulation Act, 1973, alleging that the officer had no material to form a reasonable belief and failed to record the grounds in writing. The High Court had dismissed their petition, holding the warrant, the subsequent seizure and the Income Tax authority's seizure under Section 132A were lawful. On appeal, the Supreme Court examined whether the officer must disclose the material or state the reasons for "reason to believe" in the warrant and whether non‑compliance would render the search illegal and the seized documents returnable. The Court held that the officer need not disclose the underlying material and that the grounds need not be recorded in the warrant; it is sufficient that the officer had material to form a reasonable belief, and the search remains valid. It further ruled that illegality of the search does not automatically require the return of seized material, and the allegations of personal malice were unsubstantiated. Consequently, the appeal was dismissed.

Issues considered

The officer issuing a search warrant under Section 37 FER Act must record in writing the grounds for "reason to believe".
Whether the grounds for "reason to believe" must be stated in the warrant itself.
Whether failure to record such grounds renders the warrant illegal and the seizure invalid.
Whether evidence seized in an illegal search must be returned to the parties.
Whether Section 37(2) incorporates the procedural requirements of Section 165 of the Code of Criminal Procedure.

Legislation cited

Code of Criminal Procedure, 1973s. 165
Foreign Exchange Regulation Act, 1973s. 37, s. 38, s. 41
Income Tax Act, 1961s. 132A, s. 34

Subjects

search warrantreasonable beliefForeign Exchange Regulation Actseizureillegal searchSection 37Code of Criminal ProcedureIncome Tax Actpersonal malice

Judgment

969.

.A
DR. PARTA!' SINGH AND ANR.

.
. v•
n
DIRECTOR OF ENFORCEMENT, FOREIGN
EXCHANGE REGULATION ACT AND ORS.

Apr;/ 26, 1985

[D.A. DESAI AND V. BALAKRISHNA ERADI, JJ.]
, .,,
c
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 belleve9 -What is-Whether groundS inducing 'reasonable beUef, tO bC stated
in search warrant..:.:..Whethe.r open to judicial scruti11y.
•. D
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.

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
970 SUPREME COURT REPORTS (1985] 3 s.c.a.

respondent No. 5 issued a warrant of authorisation under section 132 A of the
A 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
B 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
c 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.

D 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
E 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
F 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 is open to the Court to examine the questic1n to the
limited extent whether the reasons for the belief have a rational connection
G or a relevant bearing to the formation of the belief and are not extraneous or
irrelevant to the purpose of the section. {97; D·E]

3. Sul>-~ection (2) of section 37 provides a shield against abuse .of power
inasmuch as that where an officer below the rank of the Director of Enforce..
meat carried out the search. he must sefid a report to the Director of En..
rorccment. [978CGJ
H
PARrAP SINGEi v. miroRCBMBNf, FOREIGN BlCCflANOB 911
In the instant case, ·the reply affidavit on behalf of the respondent.s. ~ ~o
4 and the original papers, shown to the Court, indicate that there was mS.terial
before the second respondent which furnished him grounds for eotertait~ing a
reasonable belief that some- documents which would be useful in t_he investi..
gation or proceeding under the Act were secreted irt the house of the appellants
and be was, therefore, fully justified in issuing the search warrant.
' [975E-H;976A·!!l
B
Calcutta Discount Co Ltd. v. Income· Tax Officer Companies Dl1trict,1,
Calcutta & Anr. 41 !TR 191 and R.S, Seth Gopikrishan Agarwal v. R.N.·Sen,
Assistant Collector of Customs & Ors., [1967] 2 SCR 340 relied upon.

4. Section 37(2) provides that the pro'(lsions of the Code of Crimi~ai Pr~
cedure relating to searches, shall so far as may be, apply to searches directed c
under section 37(1). Reading the two sections together,- meanS that the
methodology prescribed for carrying out the search Provided in section 16S
has to be generally followed. The expresSion •so far a:s may be' has always
been tonstrued to mean that those provisions· may be generally followed to the
extent possible. If section 165(1) was to be incorporated by pen and ink as
sub-section (2) of section 37, the Jegistature·would have provided that the pro.
visions of the Code relating to searches shall· apply to the searches -direCt~d ·or D
ordered under section ~/(1) except_ that the power will be exercised by the
Director of Enforcement or other officer exercising his power and· he will be
stibstituted in place of the Magistrate. The provisions Of sub-Section (2) of
section 37 has not been cast in any such language. It merely provides that the
search may be carried out according to the method prescribed in section
165 (1). [979E-H;980A-B) . .
E
S. If it was the intention that reasons which furnish grounds for enter-
taining a reasonable belief were to be recorded in advance, appropriate words
could have been inco:-porated in section 3 7(1), otherwise a simple one line
section would have· been sufficient that all searches as required for the purpose
of this Act shall be carried out in the manner prescribed in section 16S of. the
Code by the Officer to be set out in the section, [9SOCJ F

6. In order to give full meaning to the expression •so far as may be'
sub.section (2) of section 37 should be interpreted -to mean that broadly th;
procedure relating to search as enacted in. section 165 shall be followed .. But
if a deviation becomes necessary to carry out the purposes of the Act in which
section 37(1) is incorporated, it would be permissible except that When chal-
lenged before a court of law, jnstification will have to be offered for the G
deviation. [980)

R.S. Seth Gopikrishan v. R.N. Sen: Assistant ~_Collector of Customs&: Ors.,
[1967] 2 SCR 340 and Poortin Mal etc. v. n;;ector of Inspection (Investigation)
of Income Tax Mayur Bhavan, New Delhi&: Or&., [1974) 2 SCR 70S follOwed,
": H
972 SUPREME COURT REPORTS [19g5j 3 s.c.Il,
A H.'JJ._ St1Ja1Yo <;'onimissio'ni!r of ,Income, Tax, Punjab and Ors., [1975] 101 ITR
112; Con1missioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver
1966 ITR 664 referred to, New Centfal lute Mills Co. Ltd. v. T.N. Kou/ & Ors.:
AIR 1976 Cal. 178 held over-ruled.

.. 1-. The grounds which induced reasonable belief need not be stated in
the ~eaich warrant. In the instant case, the file submitted to the court unmis-
•
'B takably shows that there was material enough before the second respondent to
form· a reasonable belief which pron1pated him to direct the search. That the
aO'cumcnts seized during the search :aid not. provide sufficient material to the
officer for further action cannot be a ground for holding that the grounds
which induced the reasonable belief were either imaginary or fictitious or mala
fide conjured up.[980E-G]

c 8. ·Legality in the method, manner or initiation of a search does not
necessarily mean that anything seized during the search bas to be returned.
Aftei.all in the course of a search, things or document$ are required to be
seized and such things and documents may furnisa •vi4•et. Illtplity of the
sea'.rch does not vitiate the evidence collected during such illegal ~earch. The
only requirement is that the court or the authority before which such material
or evidence ·seized during the search shown to be illegal, is placed has to be
D cautious and circumspect in dealing with such evidence or nla~erial. [981E-F)
Radhakishan v, State of U.P., [1963] Supp. I SCR 408 at 411 ; and
State of Maharashtra v. Natwarlal Damodardas Soni, [1980] 4 >CC 669 relied
upon ..
9. ThC mere fact that during the pendency of the writ petition before
the High Court the Enforcement Directorate ·decided to close the proceedings
E against appeHant in respect of the 1naterial seized during the search, would
uot show that the search was mala fide or for reasons ir:relevant or e:ittraneous
'°the 'exercise of power. There is no warrant for tbe assertion that every
search must result in seiz;ure of incriminating material. There can be cases in
which search may fail or a reasonable explanation ia respect of the docu-
ments may be forthcoming, [982B-E]
F
In the instant case,· as the documents and other materials have been
sealed under the warrant of authoris"ation issued under sectioLi 132-A of the
Income Tax 'Act, the· Enforcement Directorate may legitimately close the
Pfllce<dings. [982E-F]

Pooran Mal etc. v. Director Inspection (Investigation) of Income ·Tax
Mayur Bhavan, New Delhi & Ors, {1974) 2 SCR 705 ; and Income Tax Officer,
G Special Investigation Circlc-B, Meerut v. Mis Se.th Brothers & Ors., [1970) 1 SCR
601 relied on.

10. If the officer who issued the se~rch warrant had ~material for forming
a reasonable belief for the exercise of the power, the search cannot be styled
· as, illegal and, therefore, no case is made out for directing return of documents

H on the supposition thot the search and seizure ·were iUegal. [9820: 983A]
l>AllTAP SINGH v. BNFORCBMBNT, FOREiGN EXCHANGE (Desai: J.) 913

11. The allegallions of mala tides in the instant case were scanty ,a~c!_,
vague and completely misleading averments were made to support such a A
serious aliegations against a responsible officer· discharging his duties. A
nefarious attempt had been made to cook-up a wholly imaginary allegation
for attributing personal mala fides to the sixth respondent. In ~the circum-
stances the allegation cannot stand.

CIVIL APPELLATE JURISDICTION Civil Appeal No.1138 ,of B
1981.

From ihe Judgment and Order dated 22.9. 1980 of the Punjab
and Haryana High Court in W. P. No. 2163of1980.
c
Appellant-in-person.

M. M. ,4bdul Khader, Y. S. Delai, Ms. A. Subhashini, and
R. N. Poddar for the Respondents.
''
D
The judgment of the Court was delivered by

DESAI, J. Appellants who are husband and wife respectively
moved Civil Writ Petition No. 2163 of 1980 in the High Court of
Punjab and Haryana praying for quashing of a search warrant issued
by res-ponde~t No. 2 - Assistant Director, Enforcement on E
August 24, 1979 as also the warrant of authorisation' issued byres-
pondent No. 5 - Coinmissioner oflncome Tax, Julhmdur on April
9~ 1980 and for a direction to return articles seized during the search
of h!s house on August 24, 1979 and for relief incidental and ancil-
lary thereto.
F
Briefly stated, the allegations were that respondent No. · 6 -
Shri J. S. Ahuluwalia, ·Assistant Commissioner of Income-tax at
• Jullundur bore personal malice towards the appellants, amongst
others, attributable to an incident concerning the servant of the
appellants and an application for transfer of appeals pending before G
him made to the Chairman, Central Board of Direct Taxes by the
first appellant. Actuated by this personal malice, respondent No. 6
first instigated respondent No. 2 to issue a search warrant under the
authority of which a raid was carried out at the residence of the
appellants on August 24, 1979 which led to the seizure of cer\ai.n
I
documents including some foreign currency. Thereafter, when the H
SUPREME COURT REPORTs (19SS] 3 s.c.R.
A appellants made various representations for return of documents,
again instigated by respondent No. (i,. respondent No. 5 issued a
warrant of authorisation under sec. 132A of the Income .Tax Act
on April 9, 1984 by which respondent No. ·2 was directed to deliver
such t>ooks of accounts and other documents' and go'ods seized
during the search to the requisitioning officer. As the documents
B and material seized during the search had not been returned, the
writ petition as afore-mentioned was filed for the reliefs hereinabove
set out.

When the writ petition came up before a Division Bench of the
c Punjab and Haryana High Court, Mr. Kuldeep Singh, learned
counsel who appeared on behalf of the Directorate of Enforcement (

Department made a statement that the Directorate has closed the
proceedings and does not want to take any action against tho appel-
lants on account of the search. The High Court observed that in
view of this statement, the Directorate of Enforcement would nor-
D mally be required to return the seized material to the appellants but
it was noticed that as the same was sealed under a warrant of autho-
risation issued under Sec. 1 32A of the Income Tax Act, an order
for return of the same cannot be made. The High Court also took
note of the statement made by Mr. D.N. Avathy that the Income
Tax Department was still scrutinising the seized documents: The
E High Court was of the opinion that there was nothing illegal in the
issuance of search warrant, the consequent search, the seizure during
the s.earch and taking over of the documents ~'Y the Income Tax
D~partment under sec. 132A. The High Court ;ccordingly dismissed
the petition. Hence this appeal by special leave.
F ..
Dr. Partap Singh, the first appellant who appeared in person
submitted that respondent No. 2 acted in a manner contrary to law
in i·ssuing a search warrant when there was no material before him
on which he could entertain a reasonable beliei· that any. documents
which in his opinion will be useful for, or relevant to, in investi-
G gation .or proceedings under Foreign Exchange Regulation Act,
1973 (Act for short) are secreted in any place, whereupon alone he
may authorise any officer of Enforcement to search for and seize or
may himself search for and seize such documents. It was also con-
tened that as the second respondent did not record his reasons in
writing on which reasonable bel{ef was entertained, the search war-
H r~~iissued by him was illegal. . i
'
PAR:i'AP SINGH v. BNFORCBMBNT, FORBiGN EXCllANGB (Desai, J.) 915

Sec. 37 of the Act confers power on any officer of Enforce- A.
ment not below the rank of Assistant Director of Enforcement to
search premises. This power can. be exercised if the officer has
reason to believe that any documents which ·in his opinion will be
useful for, or relevant to, any investigation .or proceedings under the
Act, arc secreted in any place. The appellant contended that no
material was placea on record which may permit an inference that ll
the second respondent had reason to believe that any documents
which in his opinion would be useful for or relevant to any investi-
gation or proceeding under the Act were secreted in the house of the
appellants. It was urged that respondent No. 6 who was actuated
by personal malice towards the appellants and who being a friend of
respondent No. 2 instigated and provoked him to exercise this c
power of search and seizure not to effectuate any purpose for which
power is conferred but with a view to humiliating arid harassing the
appellants.

A little while after, we will examine the allegation of personal D
malice. Suffice it to say that the.re is no substance in the allegation.

Respondent No. 2 is a responsible officer being the Assistant
Director, Enforcement, Foreign Exchange Regulation Act stationed
at Jullundur. He issued the impugned search warrant ·which led to J~
the seizure. In the affidavit in reply on behalf -of the respondents
Nos. 1 to 4, it was clearly stated that search was authorised by
the second respondent after he was fully satisfied on the basis of the ·
information available in the official record and also on the basis of
the information collected by the officers of the Enforcement Directo-
rate after making enquiries. It was repeated in para 14 of the affi- F
davit-in-reply, that on the basis of the official record and reliable.
information in possession of respondent No. 2, he entertained a
reasonable belief for issuing the search warrant against the. appel-
lants. Respondent No. 2, it was said, on the basis of the informa-
tion available on the file hadre asons to believe that incriminating
documents were secreted in the residential premises of the first appel- G
lant and the documents which were seized by Enforcement Directo-
rate wero useful for the investigation undertaken by the office. He
undertook to produce the relevant r_ecords for the inspection of the
court at the time of the hearing of the petition. Relying on this
statement in the affidavit in reply, the appellant contended that no .
record was shown to the court as promised therein. We therefore, H
·,
916 SUPREME COURT REPORTS [198 5) 3 S.C.R

A adjourned the matter to· a later date and directed the learned
counsel for respondents Nos. -1 to 4 to produce the file. Origina
papers were shown to us and typed copies were furnished to the
·court. We have minutely gone through the file and we are fully
satisfied that there was material before the second respondent which
would furnish him grounds for entertaining a reasonable belief that
some documents which v.ould be useful in the investigation or pro·
ceeding under the Act were secreted in the house of the appellants.
He was therefore, fully justified in issuing the search warrant.

The appellant contended that in order to justify that the power
c of search was exercised in a fair and just manner and to effectuate
the purpose for which it is conferred as is evident from the language
employed in sec. 37, the officer issuing the search warrant must
disclose what material was before him on which he entertained a
reasonable belief to move into the matter. Proceeding along it was
submitted that neither in the search warrant nor in the affidavit in
ll opposition in the High Court, the material on which reasonable
belief was entertained was disclosed. It was submitted that the affi·
davit merely recites in a mechanical manner the language of the
section which cannot be held sufficient for discharging the burden
on the party which has exercised this power of search and seizure.
In this connection, lastly it was submitted that if the court is going
to look into the file, produced on behalf of the second respondent,
the same must be disclosed to the appellants so that they can contra·
vert any false or wholly unsustainable material set out in ·the file.

When an officer of the Enforcement Department proposes to
act under Sec. 37 undoubtedly, he must have reason to believe that
the documents useful for investigation or proceeding under the Act
are secreted. The material on which the belief is grounded may be
secret, may be obtained through Intelligence or 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~
The exprerssion 'reason to believe' is to be found in various statutes.
We may take note of one such. Sec. 34 of the Income Tax. Act,
192: inter a/ia provides that the Income Tax officer must have
'reason to believe' that the incomes, profits or gains chargeable to
income-tax have been under-assessed, then alone he can take action
R' 11nder sec. 34. In S. Narayanappa v. Commissioner of Income Tax,
PA.RTAP SJ:NGH v. ENFORCEMllNt, FOREIGN EXCHANGE (Desai J.) 97t

Bangalore(') the assessee challenged the action taken under sec. 34
A
and amongst others it was contended on his behalf that the reasons
which induced the Income-tax Officer to initiate proceedings under
sec .. 34 were justiciable, and therefore, these reasons should have
been communicated by the Income Tax Officer to the assessee before
the assessment can be re·opened. It was also submitted that the
reasons must be .sufficient for a prudent man to come to the conclu- B
sion that the income escaped assessment and that the court can exa-
mine the sufficiency or adequacy of the reasons on which the Income
Tax Officer has acted. Negativing all the limbs of the contention, .this
Court held that 'if there are in fact some reasonable grounds for the
Income Tax Officer to believe that there had been any non-dis~losure
as regards any fact, which could have a material bearing on the c
question of under-assessment, that would be sufficient to give jurisdic-
tion to the Income Tax Officer to issue notice under sec. 34. The
Court in terms held that whether these ·grounds are adequate or not
is not a matter for the court to investigate'.'

The expression 'reason to believe' is not synonymous with D
subjective satisfaction of the' Officer. The belief must be held in
good faith; it cannot be merely be a pretence. In the same case, it
was held that it is open to the court to examine the question whether
the reasons for the belief have a rational connection or a relevant
bearing to the formation of the belief and are not extraneous or
E
irrelevant to the purpose of the section. To this limited extent the
action of the Income Tax Officer in starting proceedings under Sec.
24 is open to challenge in a court of law. (See Calcutta Discount Co.
Ltd. v. Income Tax Officer Companies District I, Calcutta & Anr.)(')
In· R. S. Seth Gopikrishan Agarwal v. R. N. Sen, Assistant Collector
of Customs ii Ors.,(3 ) this Court repelled the challenge to the validity
of the search of the premises of the appellant and the seizure of the
documents found therein. The search was carried out under the
authority of an authorisation issued under Sec. 126 (L) (2) of the
Pefence of India (Amendment) Rules, 1963 (Gold Control Rules)
for search of the premises of the appellant. The validity of the
authorisation was. challenged on the ground of mala fides as also on G
the ground that the authorisation did not expressly employ the

(I) (1967] I SCR 590.
(2) 41 !TR 191. ,
(3) (1967] 2 SCR 3-40
u
918 SUPllBMB COU!lt llBPORTS [19SS] 3 S.C.ll.

A phrase 'reason to believe' occurring in Sec. 105 of the Customs Act.
Negativing both the contentions, Subba Rao, C. J. speaking for the
court observed that the subject underlying Sec. !05 of the Customs
Act which confers power for issuing authorisation for search of the
premises and seizure of incriminating articles was to search for
goods liable to be confiscated or documents secreted in any place,
B which are 'elevant to any proceeding under the Act. The legislative
policy reftected in the section is that the search must be in regard to
the two categories mentioned in the section. The ·court further ob·
served that though under the section, the officer concerned need not
give reasons if the existence of belief is questioned in any collateral
proceedings he has to produce relevant evidence to sustain his belief.
c A shield against the abuse of power was found in the provision that
the officer authorised to search has to send forthwith to the
Collector of customs a copy of any record made by him. Sub-sec. (2)
of Sec. 37 of the Act takes care for this position inasmuch as that
where an officer below. the rank of the Director of Enforcement
carried out the search, he must send a report to the Director of
D Enforcement. The last part of the submission does not commend to
us because the file was produced before us and as stated earlier, the
Officer issuing the search warrant had material which he. rightly
claimed to be adequate for forming the reasonable belief to issue the
search warrant.
E
It was however contended that when sub-sec. (2) of Sec. 37
is read in juxtaposition with sub-sec. (I), the legislative mandate
clearly manifests itself that before issuing a search warrant in exer·
cise of the power conferred by Sec. 37 (1), it is obligatory upon the
officer issuing the search warrant to record in writing the grounds of
F his belief and specifying in such writing, so far as possible, the thing
for which search is to be made because Sec. 37 (2) proviaes that the
provisions of the Code of Criminal Procedure, 1898 (now 1973)
relating to searches, shall, so far as may be, apply to searches nuder
this section subject to the modification that sub-sec. (5) of Sec. 165
of the said Code shall have effect as if for the word 'Magistrate',
G
wherever it occurs, the words "Director of Enforcement or other
officer exercising his power" is substituted. It was submitted that if
the power to search premises is conferred on the officer therein men-
tioned it is hedged in with a condition that in exercise of the power
' . - .
he is bound by the requirements of Sec. 165 of the Code. Jn
ll other wotds, it was said that by sub-sec. (2) of Sec. 37, Sec. 165 of
PARTAP SINGH v. ENFORCEMENT, FORBiGN EXCHANGE (Desai, J.) 979

the Code is incorporated in pen and ink in Sec. 37. It was urged
that the seCtion should be re~read as Sec·. 37 (I) as it is and Sec. 165 A
(I) of the Code be read as Sec. 37 (2). Continuing along this line,
it was submitted that read thus; the necessary intendment of the
Legislature becomes revealed in that such drastic power of search
and seizure· without notice to the person affected, can be exercised,
if the officer has reason to believe which must have its foundation
B
on some material· or grounds which must be stated in the search
warrant itself or in a record anterior to the issuance of the search
warrant so that when questioned the contemporaneous record would
be available to the court. to examine the conte.ntion whether there
was material for taking such a drastic action or that the action was
taken for extraneous and irrelevant reasons. In support of this c
submission ' reliance was placed on a decision. of the
' . Punjab and
Haryana High Court in H.L. Sibal v. Commissioner. of Income Tax,
Punjab & Ors.(l) The court was examining the expression 'in con-
sequence of information in his possession, has reason to believe' in
Sec. 132 of the Income Tax Act, 1961. The Court after referring to
the decision of this Court in Com,,,issioner of Commercial Taxes v. D
Ramkishan Shrlkishan Jhaver(2) held that 'the obligation to record in
writing, the· grounds of the be~ief as enjoined by Sec. 165 (I), if not
complied with would vitiate the issuance of search warrant and the
seizure of the articles'. It was then submitted that if the search is
illegal, anything seized during such an illegal search has to be
E
returned as held by a learned Single Judge of the Calcutta High
Court in New Central Jute Mills Co. Ltd. v; T. N. Kaul & Ors.<8)

Sec. 37 (2) provides that 'the provisions of the Code relating to
searches, shall so far as may he, ·apply .to searches directed under
Sec. 37 (I). Reading the two sections together it merely means that F
the methodology prescribed for carrying out the search provided in
Sec. 165 has to be generally followed. The expression 'so far as may
be' has always been construed to mean that those provisions may be
generally followed to the extent possible. The submission that Sec.
165 (1) has been incorporated by pen arid ink in Sec. 37 (2) has to
be negatived in view of the positive language employed in the section G
that the provisions relating to searches shall so far as may be apply

(I) [1975] 101 ITR 112.
(2) [1966] ITR 664.
(3) AIR 1976 Cal. 178. a
980 SUPREME COURT REPORTS [ ! 985] 3 s.c.R.

A to searches under Sec. 37 (I). If Sec. 165 (ll was to be incorpora-
ted by pen and ink as sub-sec. (2) of Sec. 37, the legislative drafts-
manship will leave no room for doubt by providing that the provi-
sions of the Code of Criminal Procedure relating to searches shall
apply to the searches directed or ordered under Sec. 37 (I) except
that the power will be ·exercised by the Director of Enforcement or
B other officer exercising his power and he will be substituted in place
nf the Magistrate. The provisions of sub-sec. (2) of Sec. 37 has not
been ca't in any such language. 1t merely provides that the search
may he carried out accordin~ to the method prescribed in Sec. 165
(I). If the duty to record reuo"' which furni'h grounds for enter-
talnin~ a reasonable belief were to be recorded in advance, the same
c could have been incorf,orated in Sec. 37 (I), otherwise~ simple one
line section would have been sufficient that all searches as required
for the purpose of this Act shall be carried out in the maimer pres-
cribed in . Sec. 165 of the C0de by the officer to be set out in the
section. In order to· give full meaning to the expression 'so far as
D may be'. sub-sec. (2) of Sec. 37 should be interpreted to mean that
broadly the procedure relating to search as enacted in Sec. 165 shall
be followed. But ifa deviation becomes necessary to carry out the
purposes of the Act in which Sec. 37 (!)is incorporated, it would be
permissible except that when challenged before a court of law, justi-
fication will have to be offered for the deviation. This view will give
E full play to the expression 'so far as may be'.

The view which we are taking is in accord with the view· taken
in Gopikrishan A!!arwal's case. The grounds which induced reason-
able belief therefore need not be stated in the search warrant.

F
Assuming that it was obligatory to record reasons in writing
prior to directing the search, the file submitted to the court unmis-
takably shows that there was mat erial enough before the officer to
form a reasonable belief which prompted him to diroct the search.
That the documents seized during the search did not provide suffi-
cient material to the officer for further action cannot be a ground
G for holding that the grounds which induced the reasonable belief
were either imaginary of fictitious or mala fide conjured up.

Assuming that it is obligatory upon the officer proceeding to
take search or directing a search to record in writing the grounds of
his belief and also to specify in such writing, s.o far as possible, the
H , thing for which the search is to be made, is mandatory and that non-
PARTAP SiNGH v. ENFORCEMENT FOREiGN ~CHANGB (Desai, J.) 981.,

recording of his reasons would result in the search be.ing condemned
as illegal, .what consequence. it would have on the seizure of the
documents during such illegal search. The view taken by a learned
Single Judge of the Calcutta High .Court in New Central Jute MillsCo •.
Ltd. case that once the authorisation for carrying out the search is
found to be illegal on account of the absence of recording reasons in
the formation of a reasonable belief, the officer who has seized
documents during such search must return the documents seized as
a result of the illegal search is against the weight ·of judicial opinion
•
on the subject and does not commend to us. In fact this decision
should not detain us at aUbecause virtually for all practical pur-
poses,· it can be said to heve been overruled by the decision of the
Constitution Bench in Pooran Mal etc. v Directo.r of Inspection (In-
vestigation) of Income Tax Mayur Bhavan, New Delhi & Ors.( 1) This
Court held that 'courts in India and even in England have consis-
tently refused to exclude rele~ant evidence merely on the ground,
that itis obtained by illegal search or seizure.' If therefore, the
'view of the learned Single Judge of the Calcutta were to be accepted
meaning thereby that if the search is shown to be illegal, anything
seized during such illegal search will have to be returned to the per- D
son from whose premises the same was seized. It would tantamount
to saying that evidence collected during illegal search must be
excluded on that ground alone. This was lri terms negatived by the
Constitution Bench. It has beeri often held I.hat the legality in the E
method, manner or initiation of a search does not necessarily me.an
that anything seized during the search has to be returned. After all
in the course of a search, things or documents are required to be
seized and such things and documents when seized may furnish
evidence. Illegality of the search does not vitiate the · evidence
collected during such illegal search. The only requirement is that
the court or the authority before which such material or evidence
·seized during the search shown to be illegal, is placed has to be cau-
tious and circumspect in dealing with such evidence or material.
.) This is too well-established to necessitate its substantiation by a
precedent. However, one can profitably refer to Radhakishan v. G
State of U.P.<'l wherein the court held that assuming that the search
was illegal the seizure of the articles is not vitiated. It may be that
because of the illegality of the search the court may be inclined to

(I) [1974] 2 SCR 705.
(2) [1963) Supp I S.C.R. 408 at 411

"
982 SUPR8M8 COURT REPORTS [198 5] 3 s.c.R.

A examine carefully the evidence regarding seizure, but no other con-

sequence ensues. (See State of Maharashtra v. Natwarlal Damodardas'
Soni.(')

In this behalf, the appellant further contended that if the •
B se·arch was genuine or bona fide for carrying out the purposes of the
Act, it is surprising that when the matter was before the High Court
the Enforcement Directorate submitted that it does not wish to take •
any further action in respect of the material seized during the search.
There is no warrant for the assertion that every search must result
in seizure of incriminating material. Such an approach would be
c a sad commentary on human, ingenuity. There can be cases in which
search may fail or a reasonable explanation in respect of the. docu-
ments may be forthcoming. In Income Tax officer, Special Investi·
Ratio• Circle.B,-Meerut v. M/s Seth Brothers& Ors.,(2) it was in terms
held that 'from amongst the documents seized during the search, if
some are found not to be useful for or relevant to the proceeding,
D
that by itself will not vitiate the search. Nor can an inference be
made that the power was initially exercised mala fide.' The Cour .
in Pur m Mal's case held that if the books of account and other
documents collected during the search were afterwords found to be
not relevant that by itself does not make the search and seizure
E illegal. Ju this case, however as the documents and other materials
have been sealed under the warrant of authorisation issued under
Sec. 132 A of the Income Tax Act, the Enforcement Directorate
may legitimately close the proceedings. We cannot move back-
ward and conclude that if no further proceedings are taken, at the
inception the search was malafide or for reasons irrelevant or extra- ·
F ·neous·to the exercise of power. The contention. therefore, must be
rejected. Having examined all the limbs of the submissoin, we
J
find no merit in the contention that the issuance of search warrant
was illegal or the search was illegal and inval.id.

It was next urged that if there was no justification for issuing
a search warrant, the search i:nder the authority of such a warrant
G
would be illegal and the respondents I to 4 are bound to return the
documents. If the officer who issued the search warrant had materi- ·
al for forming a reasonable belief to exercise the power, the search

(I) (1980] 4 s,E,C. 669
H (2) [1970) l S.C.R. 601,

•
PARTAP SINGH v. ENFORCEMHNT FOREiGN EXCRANGE (Desai, J.) 983
• cannot be styled as illegal and therefore, no case is made out for A
directing return of the document~ on the supposition that the search
and seizure were illegal. ·

The next submission was that respondent No. 6 was actuated by
a personal malice and with a view to harassing and humiliating the
,B
appellants instigated and provoked his friend, the second respondent
to issue the search warrant and to carry out the search. In the petition
filed in the High Court the allegations of mala fides are so scanty
that the High Court was Justified in not examining the contention
on merits. In para 6 of the petition, it is Stated 'that the petitioners
own house No.. 531 in New Jawahar Nagar, JuUundur while respon- c
dent No. 6 occupies the adjoining house, 'His attitude towards
·the petitioners was inimical and has ever been so. · Some
appeals filed by the appellants against their assessments
under the Wealth Tax were pending before· the sixth resp'on- 0

dent and that 'on May 29, 1979, the first appeUant subniitted
a representations to the Chairman, Central Board of Direct taxes D
'" complaining about the animosity of the sixth respondenf towards
••
the first appellant and requested that those appeals pending before
the sixth respondei,lt be transferred to another appellate court'.
These are all the relevant averments on the al.legation of mala tides.
When attention of the first appeUant was' drawn to this ·scanty
material, he drew our attention to the averments in para .6 of the E
petition for special leave wherein it is alleged 'that ·when the peti-
tioners were·away from Jullundur leaving their servant Gyari 'Chand
to look after their house, the servant of respondent ·No.
6 left his job whereupon respondent No. 6 nursed a "feeling
that his servant had left the job on being tutored by the petitioner's
F
servant. Thereupon. respondent No. 6 got
' . Gyan Chand detained and
' )-

maltreated by the police. When the petitioners learnt about it at
·Bombay, they requested a common friend to get Gyan Chand
released and in fact Gyan Chand was released. It was then stated .
that the friend contacted the Police Officer who ·had detained Gyan
Chand and before him, the Police Officer admitted that Gyan Chand
G
was detained at the instance of the sixth respondent.' Could there
, be more vague and completely misleading averments to support
serious allegation of personal mala fide against the officer discharging
his duties ? We are not inclined .to dilate any m'ore on this aspect
save ahd except saying that' the affidavit of Gyan Charid is not
forth-coming, that the name~of the. friend is not 'mentioned and H
·. 984 SUPREME COURT REPORTS [198 5] 3 S.C.R.

A the Police Officer cannot be identified from the material disclosed
in the petition. One can only say that a nefarious attempt has been
made to cook up a wholly imaginary allegation for attributing
personal mala fides to the sixth respondent. The contention must be
1d negatived without further examination. '

B It was lastly urged that there has been tampering with the
. documents by the officers of the Enforcement Directorate while-the
Income Tax Officer scaled and took possession of the documents
under the authority of warrant of authorisation issued by the fifth
respondent .under Sec. 132A of the Income Tax Act It was submit·
ted that the documents with which the appellants were not concer-
c ned have been foisted upon him and some documents -have been
removed. Though the submission was made at some length, .Mr.
Desai, learned counsel appearing for some of the ·. respondents
dispell~d whatever little doubt was generated in our mind by ,the
1 submissions -of the first appellant. He referred to Pass Book Account
. Nos. 132269 ~nd 159431, both issue_d by the Bank oflndia and,u~ged
D
that what was mentioned was not the account number but. the Pass
Book numbers and the Account Nos. SB 6731 and SB 7626 b~th
tally and therefore, the submission in this behalf is misconceiyed.
We accept the same. It was then urged that there were some
erasures in some of the loose sheets. We found none. After referring
:to pages 148, 149 and 150 of the diary. an argument was attempted
E to be built up that there is some tin<ering with the same. We found
the submission wholly imaginary. Therefore, there is abso.lutely no
merit in the contention that there has been some tampering with the
documents .when they were sealed under the authority of the. wammt
of authorisation issued by the Commissioner of Income Tax. ·
F
· These were all. the contention.s raised in this appeal and as
. there is no merit in any ofthem, the appeal fails and is dismissed
but with no order as to costs.

G

A.P.J. Appeal dismissed.

H

'