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PETITIONER: BARIUM CHEMICALS LTD. & ANR.

       Vs.

RESPONDENT: SH. A. J. RANA & ORS.

DATE OF JUDGMENT07/12/1971

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ MITTER, G.K. SIKRI, S.M. (CJ) SHELAT, J.M. DUA, I.D.

CITATION:  1972 AIR  591            1972 SCR  (2) 752  1972 SCC  (1) 240  CITATOR INFO :  RF         1987 SC1109  (26)

ACT: Foreign    Exchange   Regulations   Act,   1947   (VII    of 1947)--Sub-section (2) of S. 19--"Considers it necessary  or expedient,"   scope   of--Application  of   mind   regarding necessity to obtain and examine all the documents  mentioned in  the order necessary condition---The order  must  specify the "information, book or other document." Administrative   law--"Central   Government   considers   it necessary   or   expedient,"  scope   of--Foreign   Exchange Regulation Act, 1947, S. 19(2).

HEADNOTE: After this Court’s decision in the Bariumn Chemicals Ltd. v. The Company Law Board [1966 3 S.C.R.] quashing the order  of the Company Law Board passed under Cl. (b) of s. 237 of  the Companies  Act, 1956, the Court ordered that all  the  books papers  and  other documents seized under the order  of  the Board be deposited in Court and that the appellants would be entitled to receive them from the custody of the Court.   On May  22,  1966, an order was passed under s.  19(2)  of  the Foreign  Exchange  Regulation Act, 1947, stating  that  "the Central  Government  considers it necessary  to  obtain  and examine  certain  Papers and documents"  and  requiring  the appellant company and/or its Managing Director to furnish to the Enforcement Officer the documents specified in the sche- dule to the Order on obtaining the same from the custody  of the  Court.  The first six items in the Schedule related  to five  letters  and  one  telegram  While  the  seventh  item mentioned  all  other  books  papers  and  other   documents relating to the appellants in the custody of the Court. Sub-section (2) of s. 19 of the Foreign Exchange  Regulation Act  provides  :  "Where for the purpose  of  this  Act  the Central   Government  or  the  Reserve  Bank  considers   it necessary   or   expedient  to  obtain   and   examine   any information, book or other document in the possession of any person or which in the opinion of the Central Government  or the  Reserve Bank it is possible for such person  to  obtain

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and furnish. the Central Government or, as the case may  be, the Reserve Bank may, by order in writing, require any  such person  (whose  name  shall be specified in  the  order)  to furnish, or to obtain and furnish, to the Central Government or  the Reserve Bank or any person specified ill  the  order with such information, book or other document." The  appellants  filed petitions under article  226  of  the Constitution in the High Court to quash the Order dated  May 22, 1966 on the ground. Matter alia, that the order was  not in conformity with the requirements of sub-s. (2) of s.  19. The High Court dismissed the petition.  In appeal by special leave, HELD  :  The impugned order is liable to be quashed  on  the ground  that  it does not satisfy the requirements  of  sub- section (2) of s. 19 of the Act. (i)  The  occasion for the exercise of the power  under  the sub-section arises when the Central Government considers  it necessary, or expedient for the purpose of the Act to obtain and examine any information. book or 753 document.  It is only when the said requirement is satisfied that  the  central  Government can  proceed  in  the  manner indicated in the subsection. [760 H] (ii)  The Word "considers it necessary" postulate  that  the authority concerned has thought over the matter deliberately and with care and it has been found necessary as a result of such thing to pass the order.  Therefore, due application of the  mind regarding the necessity to obtain and examine  the documents in question is sine qua non for the making if  the order. [761 D] (iii) A necessary. corollary is that mind has to be  applied with  regard to the necessity to obtain and examine all  the documents-mentioned  in  the order.  An application  of  the mind with regard to the necessity to obtain and examine only a  few of the many documents mentioned in the  order,  while there has been no such application of mind in respect of the remaining documents, would not be sufficient compliance with the requirements of the statute. [761 G] (iv) The  language  of  s. 19(2) of the Act  points  to  the conclusion  that  while an order under it may be  made  with respect  to "any information, book or other document" it  is essential  that "such information book or  other  documents" should be specified in the order.  The word "such" points  to the necessity of specifying the information  book or  other  document  in  the order.   The  fact  that  penal consequences  follow from noncompliance with an  order  made under   sub-section  (2)  of  s.  19  also  highlights   the importance  of  specifying  the information  book  or  other document in    the order. [762 A] (v)  In the present case the fact that an omnibus order  was made in respect of all documents relating to the appellants, which were in the custody of the Registrar under the  orders of  this Court, including some of the documents  which  have not even been the remotest bearing on the matters covered by the  Act, goes to show that there was no due application  of the  mind  by the authority concerned.  The element  of  due care  and attention Which is an essential ingredient of  the phrase  "considers  it necessary" is lacking in  this  case. [763 E] Seth  Durgaprasad etc. v. H. R. Gomes, [1966] 2 S.C.R.  991; M.  P.  Sharma  and  others  v.  Satish  Chandra,   District Magistrate, Delhi and others, [1954] S.C.R. 1077; Income-tax officer, Special Investigation Circle-B Meerut v. M/s.  Seth Brothers and others r [1970] S.C.R. 601; held inapplicable.,

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JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1452 and 1453 of 1971. Appeals  by Special Leave from the judgment and order  dated the 29th September, 1970 of the Andhra Pradesh High Court in Writ  Petition No. 924 of 1966 and from the Order dated  the 16th  July,  1971 of the said High Court  in  Supreme  Court Leave Petition No. 121 of 1971. S. Sorabjee, B. Datta, D. Bhartucha, J. B. Dadachanji, O. C. mathur and Ravinder Narain, for the Appellants (in both  the Appeals). M. C. Chagla and Porus.  Mehta, for Respondents Nos.  1 to 3 (in both the Appeals). 754 Porus A. Mehta, for Respondent No. 4 (in both the Appeals). The Judgment of the Court was delivered by Khanna, J. This judgment would dispose of two Civil  Appeals Nos. 1452 and 1453 of 1971 which have been filed by  special leave  by  the  Barium  Chemicals  Ltd.  and  its   Managing Director,  Shri P. N. Balasubramanian.  Appeal No.  1452  is directed  against  the judgment of the Andhra  Pradesh  High Court whereby the appellants’ petition under Art. 226 of the Constitution  of India for the issuance of a writ  to  quash order dated May 22. 1966 under section 19(2) of the  Foreign Exchange Regulation Act, 1947 (Act VII of 1947) (hereinafter referred to as the Act) and other consequential reliefs  was dismissed.   The other appeal is directed against the  order of the High Court refusing to certify the case to be fit for appeal  to the Supreme Court under Articles 132 and  133  of the  Constitution  against  the  aforesaid  judgment.    The respondents impleaded are (1) Shri A.   J.   Rana,    Deputy Director, Enforcement Directorate, Ministry of    Finance, (2) Shri R. C. Dutt, Secretary to the Government of    India, Ministry  of  Finance, (3) Shri M.  L.  Wadhwa,  Enforcement Officer,  Enforcement  Directorate and (4) Union  of  India. through the Secretary of Finance. The first appellant was registered as a public limited  com- pany  in  1961 with its registered office  at  Ramavaram  in Andhra  Pradesh.   The second appellant, who  is  the  sole proprietor  of  a  concern named Trans  world  Trades,  was appointed  the Managing Director of the appellant  company. On  May  19,  1965. an order was issued  on  behalf  of  the Company  Law  Board under clause (b) of section 237  of  the Companies Act, 1956 appointing four persons as inspectors to investigate  the  affairs of the appellant  company  on  the ground  that  the Board was of the opinion that  there  were circumstances suggesting that the business of the  appellant company  was  being  conducted with intent  to  defraud  its creditors,  members  or other persons and that  the  persons concerned  in the management of the affairs of  the  company had   in   connection  therewith  been  guilty   of   fraud, misfeasance and other misconduct towards the company or  its members.  The above order was made on behalf of the Board by Shri  Dutt respondent, who was at that time the Chairman  of the Company Law Board. In pursuance of the above order, searches were conducted  at Hyderabad, Ramavaram, New Delhi and Wellington and a #number of   documents  were  seized.   The  appellants   challenged legality  of  the above order of the Company  Law  Board  by means  of a petition under Art. 226 of the  Constitution  of India in the 755 Punjab  High  Court.   One  of  the  grounds  taken  by  the

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appellants in that petition was that the impugned order  had been  issued  mala  fide  at the  instance  of  Shri  T.  T. Krishnamachari,  who  was  hen  Finance  Minister  and  who, according  to the appellants, had a bias  against  appellant No.  2. The second ground on which the order of the  Company Law  Board was assailed was that there was no  material  on the basis of which such an order could have been made.  Some other grounds were also taken but we are not Concerned  with them.   The above petition was dismissed by the Punjab  High Court and thereupon the appellants came up in appeal to this Court.   It was held by this Court that the appellants  had failed to show that the impugned order had been passed  mala fide.   The  impugned order, however, was set aside  by  the majority  on  the  ground that the facts  mentioned  in  the affidavit  filed  on  behalf of the  respondents  could  not reasonably  suggest  that  the  business  of  the  appellant company  was  being  conducted  to  defraud  the  creditors, members  or other persons or that the management was  guilty of fraud towards the company or any of its members.  As  the facts  mentioned  in  the said affidavit were  found  to  be extraneous to the matters mentioned in clause (b) of section 237 of the Companies Act, the impugned order was held to  be ultra vires that section. The  above judgment of this Court was pronounced on  4th  of May,  1966.   On  6th May 1966, the appeal  was  posted  for directions  in  respect  of the  documents  which  had  been seized.    This  Court  then  passed  an  order  that   "the respondents  (1  & 3-7) will deposit in this Court  all  the books,  papers  and other documents that  they  have  seized under  the  order that has been quashed by our  judgment  in this  case, within ten days from today.  They also  give  an undertaking that they will not inspect those papers while in their  possession,  and after a fortnight  from  today,  the appellants will be entitled to receive them from the custody of this Court without further orders." In pursuance of the above order, the seized documents  were. deported  on  19th of May 1966 with the  Registrar  of  this Court.  An application thereafter was field in this Court by Shri  P. R. Krishnan, Assistant Director in the  Enforcement Directorate, praying for a direction to the Registrar of the Court  to accept service of an order under section 19(2)  of the Act and to hand 756 over  the documents in the custody of the Registrar  to  the Enforcement Directorate.  The said application was disposed of  without any specific orders.  On 22nd of May  1966,  the following order was issued by respondent No. 1 - "No. V(358)65 (Part File) (i) ENFORCEMENT DIRECTORATE MINISTRY OF FINANCE Department of Revenue & Insurance Government of India Grams    ’DIRENTFERA’ Reserve Bank Building 2nd Floor New Delhi- 1.               WHEREAS  for the purposes of the  Foreign  Ex-               change Regulation Act, the Central  Government               considers  it necessary to obtain and  examine               certain papers and documents belonging to Shri               P.  N. Balasubramanian, The  Barium  Chemicals               Ltd., and the Trans world Trades and documents               and   papers  pertaining  to   the   aforesaid               concerns including the documents specified  in               the schedule hereunder.               AND  WHEREAS, the documents specified  in  the

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             schedule are at present in the custody of  the               Registrar of the Supreme Court of India  under               an  order  dated 6th May, 1966 passed  by  the               Hon’ble Supreme Court in Civil Appeal No.  381               of 1966 (Barium Chemicals Limited Vs.  Company               Law Board).               AND  WHEREAS,  the  aforesaid  documents   are               likely  to be handed over to M/s.  The  Barium               Chemicals    Ltd.,   and/or   Shri    P.    M.               Balasubramanian   by  the  Registrar  of   the               Supreme  Court  of India under  the  aforesaid               order  of  the Supreme Court  dated  6th  May,               1966.               AND WHEREAS, Shri P. N. Balasubramanian is in.               control  of  the Barium  Chemicals  Ltd.,  and               Transworld  Trades  and is in  a  position  to               obtain and furnish the aforesaid documents.                757               NOW THEREFORE, in exercise of the powers under               section 19(2) of the Foreign Exchange  Regula-               tion Act, 1947, the Central Government  hereby               requires  the said Shri P. N.  Balasubrimanian               and/’or the Barium Chemicals Ltd., to  furnish               to  Shri  M. L. Wadhwa,  Enforcement  Officer,               Enforcement Directorate, Ministry of  Finance,               Department  of  Revenue  and  Insurance,   New               Delhi,  the  said documents (as  per  schedule               attached to this order) on obtaining the  same               from the Registrar of the Supreme Court.               Dated  at New Delhi this 22nd day of  May  One               thousand nine hundred and sixty six.               (A. J. RANA)               (Deputy Director)               Enforcement Directorate,               Ministry of Finance,               Directorate of Revenue & Insurance               Government of India."               Attached  to  the  order  was  the   following               schedule -               "1.   Letter   sent  by  Bank   of   Scotland,               Piccadilly,  Circus  Branch  16-18,  Piccadily               London  W,I.  in February, 1964 to Mr.  P.  N.               Balasubramanian, The Barium Chemicals Ltd.               2.    Letter   dated  20-5-1965  from  L.   A.               Mitchell  Ltd.  Chemical Engineers,  Harvester               House,  37, Peter Street, Manchester-2 to  Mr.               P.  N. Balasubramanian, The  Barium  Chemicals               Ltd.               3.    Letter  dated 28-5-1962 from Mr.  P.  N.               Subramanian     to Sir Charles Chominglan  Kt.               93, Iverna Court London WG.               4.    Letter dated 21-11-1961 from  Transworld               Trades  signed by L. A. Shandero, Director  of               Agencies  to  L. A. Mitchell  Ltd.,  Harvester               House, 37, Peter Street, Manchester-2.               5.    Copy  of telegram dated 24-7-61 from  P.               N. Balasubramanian, 186-Golf Links, New Delhi-               3  to  Lt.   Mitchell,  Inspection  Manchester               England booked at C.T.O. New Delhi.               6.    Letter   dated   30-6-1961   from   L.A.               Mitchell  Ltd.  Chemical Engineers,  Harvester               House, 37, Peter Street,, Manchester-2 to  Mr.               P. N. Balasubramanian, Transworld Trades,  186               Golf Links, New Delhi-3.                758

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             7.    All   other  books,  papers  and   other               documents    relating    to   Shri    P.    N.               Balasubramanian  Transworld  Trades  and   the               Barium  Chemicals Ltd., in the  possession  of               the  Registrar of the Supreme Court  of  India               under  an order dated 6th May 1966  passed  by               the  Hon’ble Supreme Court of India  in  Civil               Appeal No. 381 of 1966 (Barium Chemicals Ltd.,               Vs. Company Law Board and others)." The  order was addressed to the appellant company.   Another copy of the order was addressed to appellant No. 2. The  appellants thereupon filed petition under Art.  226  of the  Constitution of India in the Andhra Pradesh High  Court for  the issuance of a writ, as mentioned earlier, to  quash the  order  dated  May  22,  1966  and  other  consequential reliefs.   One  of the grounds taken by the  appellants  for assailing  the  impugned order was that the order  had  been passed  mala fide at the instance of Shri  Dutt  respondent, who was previously Chairman of the Company Law Board and was at  the time of the passing of the impugned order  Secretary to the Government of India, Ministry of Finance,  Department of  Revenue and Insurance.  It was stated that Shri Dutt  in conspiracy  with his subordinates wanted to wreak  vengeance against  the  appellants as the earlier order  made  by  him under  clause  (b) of section 237 of the Companies  Act  had been  quashed  by  the Supreme Court.  Shri  Dutt  was  also stated   to  be  inimical  to  the  appellants  because   of publication of certain articles against him.  Another ground taken  by the appellants was that Shri Rana. respondent  No. 1, was not competent to make the impugned order and the same was not in conformity with Art. 77 of the Constitution.  The order was also stated to be ultra vires section 19(2) of the Act, as the conditions precedent to the making of the  order were  non-existent.   Ground  further  was  taken  that  the provisions  of  section 19(2) of the Act were  violative  of Articles 14, 19(1) (f)   and   (g)   and   20(3)   of    the Constitution. The above grounds were controverted by the respondents and the  affidavits  of Shri Rana and Shri Dutt  respondents  as also  those  of Shri Jasjit Singh, Joint  Secretary  in  the Ministry  of Finance (Department of Revenue and  Insurance), Shri  Venkataraman, Director of Enforcement and Shri  T.  P. Singh,  Secretary of the Ministry of Finance were  filed  in opposition  to the petition.  According to the case  of  the respondents,  Shri Dutt had nothing to do with the  issuance of  the  impugned order and he was never consulted  by  Shri Rana  or the Joint Secretary concerned or any other  officer in that connection.  It was further stated that the impugned order  was the result of consultation which the Director  of Enforcement and Shri Jasjit Singh had with the then  Finance Minister, 759 Shri  Sachindra  Choudhuri.  There was no  legal  infirmity, according  to the respondents, in the impugned  order.   The order   was,.   it  was  added,  in  conformity   with   the requirements of section 19(2) of the Act and Art. 77 of  the Constitution. The learned Judges of the High Court held that the charge of mala  fide against Shri Dutt must fail as he had nothing  to do  with the issuing of the impugned order.  It was  further held  that  necessary material had been  placed  before  the Finance  Minister  with  a view to enable  him  to  form  an independent  opinion  as  to the necessity  of  issuing  the impugned  order  under  section  19(2)  of  the  Act.    The contention  that  the impugned order was not  in  conformity

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with  section  19 (2) of the Act was  repelled.   Shri  Rana respondent.  it was further held, was authorised to sign  on behalf  of  the President.  The impugned order as  such  was found to be in conformity with Art. 77 of the  Constitution. The appellant did not press the ground that section 19(2) of the Act was violative of Articles 14, 19(1) (f) and (g)  and 20(3) of the, Constitution in view of an earlier decision of this Court but reserved the right to agitate the question in appeal  in  this Court.  The High Court  also  overruled  an objection  taken  on behalf of the respondents  relating  to territorial  jurisdiction.  In the result, the petition,  as stated earlier, was dismissed. Before proceeding further, it may be mentioned that the  Act was enacted, as according to its preamble, "it is  expedient in the economic and financial interests of India to  provide for the regulations of certain payments, dealings in foreign exchange  and  securities  and  the  import  and  export  of currency and bullion".  Section 19 of the Act confers  power to  call for information.  Sub-section (2) of that  section, with which we are concerned, reads as. under :-               "2.  Where  for the purpose of  this  Act  the               Central   Government  or  the   Reserve   Bank               considers  it necessary or expident to  obtain               and  examine  any information, book  or  other               document  in the possession of any  person  or               which in the opinion of the Central Government               or  the Reserve Bank it is possible  for  such               person  to  obtain and  furnish,  the  Central               Government or, as the case may be, the Reserve               Bank  may,  by order in writing,  require  any               such person (whose name shall be specified  in               the  order)  to  furnish,  or  to  obtain  and               furnish,  to  the Central  Government  or  the               Reserve  Bank or any person specified  in  the               order  with  such information, book  or  other               document." Various  contentions  have been advanced in  appeal  by  Mr. sorabji on behalf of the appellants but it is not  necessary to deal 760 with  all of them, as in our opinion, the impugned order  is liable  to be quashed on the short ground that it  does  not satisfy the requirements of section 19(2) of the Act. Sub-section (2) of section 19 of the Act has been reproduced above and its perusal shows that the sub-section consists of two  parts.   The first part mentions the  occasion  or  the circumstance  in which an order under the subsection can  be made, while the second part deals with two contingencies and provides  for  the form and mode of the order  in  which  it should be made to suit ,each contingency.  The two parts  of the sub-section are :               1.    Where  for  the purpose of the  Act  the               Central   Government  or  the   Reserve   Bank               considers it necessary or expedient to  obtain               and  examine  any information, book  or  other               document.               2(a)  In  case the said information,  book  or               document  is in the possession of any  person,               the Central Government or as the case may be,               the  Reserve  Bank may, by order  in  writing,               require such person to furnish to the  Central               Government  of the Reserve Bank or any  person               specified in the order such information,  book               or other document.               (b)   In case, however, the information.. book

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             or  document is not in the possession  of  the               person to whom the order is addressed, but  it               is  possible  in the opinion  of  the  Central               Government  or  the  Reserve  Bank,  for  such               person to obtain and furnish that information,               book or other document, the Central Government               or the Reserve Bank may, by order in  writing,               require  such person to obtain and furnish  to               the Central Government or the Reserve Bank  or               any   person  specified  in  the  order   such               information, book or other document. It  would, therefore, follow that the power under the  above provision can be exercised either by the Central  Government or  by the Reserve Bank.  The occasion for the  exercise  of this  power  Would  arise when either  of  them,  viz.,  the Central  Government  ,or  the  Reserve  Bank,  considers  it necessary or expedient for the purpose of the Act to  obtain and  examine any information, booker document.  It  is  only when  the  said requirement is satisfied  that  the  Central Government  or  the Reserve Bank, as the case  may  be,  can proceed  in  the manner indicated above in  clause  2(a)  or 2(b). 761 We  are in the present case not concerned with  the  Reserve Bank  nor  with  the situation  wherein  it  was  considered expedient  to  obtain and examine any information,  book  or other  document.  The impugned order purports to  have  been made by the Central Government because, according to it, the Central  Government considered it necessary for the  purpose of  the Act to obtain and examine the papers  and  documents specified in the schedule to the order.  The question  which arises for determination is whether the authority  concerned applied  its mind so as to show that the Central  Government considered it necessary for the purpose of the Act to obtain and  examine  the  papers and  documents  specified  in  the schedule. The  words  ’considers  it  necessary’  postulate  that  the authority concerned has thought over the matter deliberately and with care and it has been found necessary as a result of such thinking to pass the order.  The dictionary meaning  of the  word  ’consider’ is ’to view  attentively,  to  survey, examine, inspect (arch), to look attentively, to contemplate mentally,  to  think over, meditate on, give heed  to,  take note  of,  to  think  deliberately,  be  think  oneself.  to reflect’  (vide  Shorter Oxford Dictionary).   According  to Words  & Phrases-Permanent Edn: Vol. 8A to ’consider’  means to think with care.  It is also mentioned that to ’consider’ is to fix the mind upon with a view to careful  examination; to ponder; study; meditate upon, think or reflect with care. It  is,  therefore, manifest that careful  thinking  or  due application  of the mind regarding the necessity  to  obtain and  examine the documents in question is ,vine que non  for the making of the order.  If the impugned order were to show that   there  has  been  no  careful  thinking   or   proper application of the mind as to the necessity of obtaining and examining   the  documents  specified  in  the  order,   the essential  requisite. to the makings of the order  would  be held to be non-existent. A  necessary  corollary of what has been observed  above  is that mind has to be applied with regard to the necessity  to obtain and examine all the documents mentioned in the order. An  application of the mind with regard to the necessity  to obtain  and  examine  only  a  few  of  the  many  documents mentioned  in  the  order,  while there  has  been  no  such application  of mind in respect of the remaining  documents,

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would not be sufficient compliance with the requirements  of the  statute.  If, however, there has been consideration  of the matter regarding the necessity to obtain and examine all the  documents and an order is passed thereafter, the  Court would  stay its hand in the matter and would not  substitute its  own  opinion  for  that  of  the  authority   concerned regarding  the --necessity  to  obtain  the  documents  in question. 762 The  language  of  section 19(2) of the Act  points  to  the conclusion  that  while an order under it may be  made  with respect to .any information’, book or other document, it  is essential  that  such information, book  or  other  document should  be specified in the order.  This is apparent  from the  concluding part of the said .sub-section wherein  there is  reference to ’such information, book or other  document. The  word ’such’ points to the necessity of  specifying  the information, book or other document in the order.  It is, no doubt,  true that the order can relate to a large number  of books, documents or information, it is all the same  impera- tive  that the same should be particularized in  the  order. According to sub-section (1-A) of section 23 of the Act,  if any person contravenes any of the provisions of this Act or of  any  rule, direction or order made thereunder,  for  the contravention of which no penalty is expressly provided,  he shall,  upon  conviction  by a ,court,  be  punishable  with imprisonment  for a term which may ,extend to two years,  or with  fine, or with both.  The fact that penal  consequences follow  from  non-compliance with an order made  under  sub- section (2) of section 19 also highlights the importance  of specifying  the  information book or other document  in  the order. The order under the above provision of law is addressed  to the  person  who  is  either  in  possession  of   requisite information book or other document or is, in the opinion  of the  authority ,concerned, able to obtain and  furnish  such information,  book or ,other document.  For compliance  with such an order, it is imperative that the person against whom the order is directed should be left in no doubt with regard to the precise information, book or other document which  is required  to  be furnished by him.  It,  therefore,  becomes essential  that  the requisite information, book  ,or  other document should be specified in the order. In  the light of what has been stated above, let us  examine the impugned order in the present case.  The appellants have been  directed by the impugned order to obtain  and  furnish the  documents  mentioned in the schedule  attached  to  the order.   The  first six items in the schedule  relate  to  5 letters  and one telegram while the 7th item mentions  other books,  papers and documents relating to the  appellants  in the  possession of the Registrar of this Court  under  order dated  6th of May, 1966 passed by this Court.  The  list  of those documents is on the file of this case and its  perusal shows  that  hundreds  of documents and  files  are  in  the custody  of the Registrar relating to the appellants.   Some of  those  documents have not even the  remotest  connection with  the  matters  for which  information,  book  or  other docment may be obtained under section 19(2) of the Act.  One of the 763 documents is a Memorandum submitted by the appellant comPany to  the  Minister for Finance and  Industry,  Government  of Andhra Pradesh.  Some other documents contain agenda for the meetings of the Board of Directors.  Still another  document is  described  as "one confidential typed pamphlet  of  five

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papers  heading ’The Empire of T.T.K. and Company’ found  in the personal brief case of the Managing Director." There are also  files  relating  to the  Memoranda  submitted  to  the Minister  for  Heavy Engineering as also copies  of  letters addressed  to the Chief Controller of Imports  and  Exports. Some sheets of papers contain chemical formulae relating  to the  preparation of certain barium compounds.  A  number  of shares certificates of the appellant company in the name  of the  appellant,  his wife and minor child are  also  in  the custody of the Registrar.  We are at a loss to understand as to  how it was considered necessary for the purpose  of  the Act  to  obtain  and  examine any  of  the  above  mentioned documents.  It cannot be gainsaid that there has to be- some nexus  between the documents sought to be obtained  and  tic purpose  of the Act.  Where such a nexus is missing and  the document  has no relevance for the purpose of the  Act,  the condition precedent to the making of an order under  section 19(2) must be held to be non-existent. The  fact that an omnibus order was made in respect  of  all documents  relating  to the appellants, which  were  in  the custody  of  the Registrar under the orders of  this  Court, including  some  of the documents which have  not  even  the remotest bearing on the matters covered by the Act, goes  to show  that there was no due application of the mind  by  the authority  concerned.   As mentioned earlier,  an  essential condition precedent to the making of an order under  section 19(2) is that the authority concerned should have considered it  necessary to obtain-and examine for the purpose  of  the Act the specified information, book or other document.   The element  of  due care and attention which  is  an  essential ingredient of the phrase ’considers it necessary’ is lacking in this case.  As such, the impugned order should be held to be not in conformity with sub-section 19 of the Act. Mr. Chagla on behalf of the respondents has referred to  the case  of Seth Durgaprasad etc. v. H. R. Gomes where  it  was held  that the power to search granted under section 105  of the  Customs Act is a power of general search and it is  not necessary for its exercise that the authority should specify the  documents  for which search is to be made.   The  above case,  in our opinion, cannot be of much assistance  to  the respondents.   The power to search contemplated  by  section 105 of the Customs Act  (1) [1966] 2 S.C.R. 991. 764 is  similar  to  that conferred under  section  19D  of  the Foreign  Exchange  Regulation  Act, which  also  relates  to search  for  and seizure of useful  and  relevant  documents secreted  in  any  place.   The  authorisation  for   search contemplated  by the above two provisions need  not  specify the  documents for which search is to be made because  in  a vast majority of cases, the authority concerned might not be aware of the precise nature of the secreted documents.   The same  reasoning  would not, however, hold good  in  case  an order  is made under section 19(2) for  obtaining  specified documents. Reference  has also been made by Mr. Chagla to the cases  of M.  P.  Sharma  and  others  v.  Satish  Chandra,   District Magistrate,  Delhi  and  other(1)  and  Income-tax  Officer, Special Investigation Circle-B, Meerut v. M s. Seth Brothers and  Ors.  The first of these cases deals with the  question as to whether search warrant issued under section 96 of  the Code  of Criminal Procedure offends Article 19(1)(f) of  the Constitution    and   whether   compelled   production    of incriminating  documents  by a person against whom  a  first information  report has been made is testimonial  compulsion

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within the meaning of Art. 20(3) of the Constitution.   None of these questions arises for consideration ’in the  present case and as such the cited authority cannot be of much  help to  the respondents.  The other case of Seth Brothers  dealt with  the power of search and seizure under section  132  of the  Indian Income-tax Act.  The question involved  in  that case  was essentially different from that which  arises  for determination  in  the  present case.   As  such,  the  said decision can also be of not much avail to the respondents. The impugned order for the reasons stated above is liable to bequashed.   It  would, however, be open  to  the  authority concerned  to make a fresh order in due compliance with  the requirements  of section 19(2) of the Act.   We,  therefore, allow appeal No. 1452 of 1971, set aside the judgment of the High  Court  and quash the impugned order.   The  appellants shall be entitled to the costs of this appeal as well as  of the   High   Court.   Appeal  No.  1453  of  1971   in   the circumstances  has become  infructuous  and  as  such   is dismissed with no order as to costs. The  records in question, in the custody of  the  Registrar, will  be returned to the appellants after a month unless  an other order has been made under section 19(2) of the Act  or other provision of law. K.B.N. C.A. No. 1452/71 allowed. C.A, No. 1453/71 dismissed. (1)  [1954] S.C.R. 1077. (2)  [1970] I S.C.R.601. L643SupCI/71-2,500-5#-73 -GIPF. 765