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PETITIONER: DR. PARTAP SINGH AND ANR.

       Vs.

RESPONDENT: DIRECTOR OF ENFORCEMENT FOREIGN EXCHANGE REGULATION AND ORS.

DATE OF JUDGMENT26/04/1985

BENCH: DESAI, D.A. BENCH: DESAI, D.A. ERADI, V. BALAKRISHNA (J)

CITATION:  1985 AIR  989            1985 SCR  (3) 969  1985 SCC  (3)  72        1985 SCALE  (1)1208

ACT:      Foreign Exchange  Regulation Act  1973 section  37  and Code of  Criminal  Procedure.  section  165-Search  warrant- Issuance of-Officer whether obliged to record in writing the grounds for  his belief before issuance-’Reason to believe’- What is-Whether  grounds inducing  ’reasonable belief  to be stated In search warrant-Whether open to judicial scrutiny.      Foreign Exchange  Regulation Act  section 37 38 and 41- Search  and   Seizure-Illegality  of-Whether   would  render seizure  pursuant   to   illegal   search   Invalid-Evidence collected during  illegal search-Court  to  be  cautious  in assessment.      Income  Tax   Act  1961   section  132   A-Warrant   of authorisation to  seal documents  articles seized during the search under  section 37  of the Foreign Exchange Regulation Act 1973-Whether could be returned.      Words and  phrases-(caning of-’Reason  to believe’  and ’so far  as may  be-Meaning of-Section 37 (1) and Section 37 (2) of FERA 1973.

HEADNOTE:      The appellants  husband and  wife moved  the High Court under Article 226 for quashing of a search warrant issued by respondent No.  2-Assistant Director,  Enforcement, as  also the warrant  of authorisation  issued by  respondent No.  5- Commissioner of  Income Tax  and for  a direction  to return articles seized  during the  search of  their house  and for relief incidental  and  ancillary  thereto.  The  appellants alleged that respondent No. 6-an Assistant Com. missioner of Income Tax,  bore personal malice towards them, attributable to an  incident concerning the servant of the appellants and an application  for transfer  of appeals  pending before him was made  to the  Chairman Central  Board of Direct Taxes by the first  appellant.  Actuated  by  this  persona;  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 which led to the seizure  of certain  documents  including  some  foreign currency.  Thereafter   when  the  appellants  made  various representations for return of documents, again instigated by respondent No. 6, 970

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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  requisitioning 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 documents 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 respondent No. 2 acted in a manner contrary to  law in  issuing a  search warrant  without  any material before him on which he could entertain a reasonable belief that  any documents  which in  his  opinion  will  be useful for,  or relevant to, in investigation or proceedings under Foreign  Exchange Regulation Act, 1973 are secreted in any place  and (ii)  that as  the second  respondent did not record his reasons in writing on which reasonable belief was entertained, the search warrant issued by him 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  documents  useful  for  investigation  or proceeding under the Act are secreted. The material on which the belief is grounded may be secret, maybe 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. Whether these grounds are adequate or not is not a matter for the Court to investigate. [079F-H: 977A-C]      S.  Narayanappa   v.  Commissioner   of   Income   Tax, Bangalore, [1967] 1 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 is open  to the Court to examine the question to the limited extent 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 irrelevant to tho purpose of the section. [977 D-E]      3. Sub-Section  (2) of  section 37  provides  a  shield against abuse  of power  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 Enforcement. [978C-G] 971      In the  instant case,  the reply affidavit on behalf of the respondents I to 4 and the original papers, shown to the Court, indicate  that there  was material  before the second respondent which  furnished him  grounds for  entertaining a reasonable belief  that some documents which would be useful in the  investigation  or  proceeding  under  the  Act  were secreted  in  the  house  of  the  appellants  and  he  was, therefore, fully justified in issuing the search warrant.                                              [975E-H 976A-B]      Calcutta  Discount   Co  Ltd.  v.  Income  Tax  Officer Companies District  1, Calcutta  & Anr.  41 ITR 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  provisions of the Code of  Criminal Procedure  relating to  searches, shall so

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far as  may be,  apply to  searches directed  under  section 37(1). Reading  the two  sections together,  means that  the methodology prescribed  for carrying out the search provided in section  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. If  section 165(1)  was to  be incorporated by pen and ink  as sub-section  (2) of  section 37, the legislature would have provided that the provisions of the Code relating to searches  shall apply to the searches directed or ordered under section  37(1) except that the power will be exercised by tho  Director of  Enforcement or other officer exercising his power  and he  will  be  substituted  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 tho  search may  be carried out according to tho method prescribed in section 165 (1). [979E-H;980A-B]      5. If  it was  the intention that reasons which furnish grounds for  entertaining a  reasonable belief  were  to  be recorded in  advance,  appropriate  words  could  have  been incorporated in  section 37(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 165  of the  Code by  the Officer to be set out in tho section. [980C]      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 the 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  challenged before  a court of law,  justification   will  have   to  be  offered  for  the deviation. [980]      R.S. Seth  Gopikrishan v. R.N. Sen, Assistant Collector of Customs  & Ors.,  [1967] 2 SCR 340 and Pooran Mal etc. v. Director of  Inspection (Investigation)  of Income Tax Mayur Bhavan, New Delhi & Ors., [1974] 2 SCR 705 followed, 972 H.L. Sibal  v Commissioner  of Income,  Tax, Punjab an Ors., [1975] 101  ITR 112;  Commissioner of  Commercial  Taxes  v. Ramkishan Shrikishan  Jhaver 1966  ITR 664  referred to, New Central Jute  Mills Co.  Ltd. v.  T.N. Kaul  & Ors. AIR 1976 Cal. 178 held over-ruled.      7. The grounds which induced reasonable belief need not be stated  in the  search warrant.  In the instant case, the file submitted  to the  court unmistakably  shows that there was material  enough before  the second respondent to form a reasonable belief  which prompated him to direct the search. That the  documents seized during the search did not provide sufficient material to the officer for further action cannot be a  ground for  holding that the grounds which induced the reasonable beli f  were either  imaginary or  fictitious  or mala fide conjured up.[980E-G]      8. Legality  in the  method, manner  or initiation of a search does not necessarily mean 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 may furnish envidence . 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 cautious and circumspect in dealing with such evidence or material. [981B-F]

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    Radhakishan v.  State of  U.P.-, [1963] Supp- 1 SCR 408 at 411;  and State  of Maharashtra  v. Natwarlal  Damodardas Soni, [1980] 4 SCC 669 relied upon.      9. The  mere fact  that during the pendency of the writ petition  before     the   High  Court   -  the  Enforcement Directorate  decided   to  close   the  proceedings  against appellant in  respect of  the  material  seized  during  the search, would not show that the search was mala  fide or for reasons irrelevant  or extraneous  the  exercise  of  power. There is no warrant for the assertion that every search must result in  seizure of  incriminating material-  There can be cases in  which search  may fail or a reasonable explanation in respect of the documents may be forthcoming. [982B-E]      In  the  instant  case,  as  the  documents  and  other materials  have   been   sealed   under   the   warrant   of authorisation issued  under section  132-A of the Income Tax Act, the  Enforcement Directorate  may legitimately case the proceedings. [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, Special Investigation Circle-B, Meerut v.  M/s Seth Brothers & Ors., [1970] 1 SCR 601 relied on.      10. If  the officer  who issued  the search 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 on  the supposition  that the  search and  seizure were illegal. [982G: 983A] 973      11. The  allegations of  mala fides in the instant case were scanty  and vague  and completely  misleading averments were made  to support  such a  serious allegations against a responsible  officer   discharging  his  duties.A  nefarious attempt  had   eeen  made  to  cook-up  a  wholly  imaginary allegation for  attributing personal mala fides to the sixth respondent.  In  the  circumstances  the  allegation  cannot stand.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No.1138 of 1981.      From the  Judgment and  Order dated  22.9. 1980  of the Punjab and Haryana High Court in W. P. No. 2163 of 1980.      Appellant-in-person.      M. M. Abdul Khader, V. S. Desai, Ms. A. Subhashini, and R. N. Poddar for the Respondents.      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  respondent  No.  2-  Assistant Director, Enforcement on August 24, 1979 as also the warrant of authorisation  issued by  respondent No, 5 - Commissioner of Income  Tax,  Jullandur  on  April  9,  1980  and  for  a direction to return articles seized during the search of his house on  August 24,  1979 and  for  relief  incidental  and ancillary thereto.      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

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for transfer  of appeals  pending before  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 certain   documents  including  some foreign currency. Thereafter, when the 794 appellants  made   various  representations  for  return  of documents, again  instigated by respondent No. 6, respondent No’ S  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 rooks of accounts and other documents  and   goods  seized  during  the  search  to  the requisitioning officer  As the documents and material seized during the  search had  not been returned, the writ petition as aforementioned  was filed  or the reliefs hereinabove set out.      When the  writ petition  came. up  before a  Divisional Bench of  the 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 the appellants on account of the search. The  High  Court  observed  that  in  view  of  this statement, the  Directorate of Enforcement would normally be required to return the seized material to the appellants but it was  noticed that  as the same was sealed under a warrant of authorisation  issued under  Sec. 132A  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  High Court was of the opinion that there was nothing illegal in the issuance of search warrant, the consequent  search, the  seizure during  the search  and taking over  of, the  documents by the Income Tax Department under sec.  132A. The  High Court  accordingly dismissed the petition. Hence this appeal by special leave.      Dr. Partap  Singh, the  first appellant who appeared in person submitted  that respondent  No 2  acted in  a  manner contrary to  law in  issuing a search warrant when there was no material  before  him  on  which  he  could  entertain  a reasonable belief  that any  documents which  in his opinion will be  useful for,  or relevant  to, in  investigation  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 contend  that as  the second  respondent did not record his reasons  in  writing  on  which  reasonable  belief  was entertained, the search warrant issued by him was illegal. 975      Sec. 37  of the  Act confers  power on  any officer  of Enforcement 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, are secreted in any place.  The appellant  contended that  no  material  was placed on  record which  may permit  an inference  that  the second respondent  had reason  to believe that any documents which in  his opinion would be useful for or relevant to any investigation or  proceeding under  the Act were secreted in the house  of the  appellants. It  was urged that respondent

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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  power  of search and  seizure not  to effectuate any purpose for which power is  conferred but  with  a  view  to  humiliating  and harassing the appellants.      A little while after, we will examine the allegation of personal  malice.  Suffice  it  to  say  that  there  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 the seizure. In the affidavit in reply on behalf  of the  respondents Nos.  l 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 Directorate after  making enquiries. lt was repeated in para 14 of  the affidavit-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   appellants. Respondent  No.  2,  it  was  said,  on  the  basis  of  the information available  on the  file had  reasons to  believe that  incriminating   documents   were   secreted   in   the residential  premises   of  the   first  appellant  and  the documents which  were seized by Enforcement Directorate were useful for  the investigation  undertaken by  the office. He undertook to produce the relevant records 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, 976 adjourned the  matter to  a  later  date  and  directed  the learned counsel  for respondents  Nos. l to 4 to produce the file. Original 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 could  be useful  in the  investigation or  proceeding 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  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   opposition in the High Court, the material on which reasonable  belief was  entertained was  disclosed. It was  submitted  that  the  affidavit  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 controvert any false or wholly unsustainable material set out in the file.

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    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 expression ’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 alia  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  under sec. 34. In S. Narayanappa V. Commissioner of Income Tax, 977 Bangalore(1) 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 reopened. It was also submitted that the reasons must be sufficient  for a  prudent man  to come to the conclusion that the  income escaped  assessment and  that the court can examine 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-disclosure as regards any fact,  which  could  have  a  material  bearing  on  the question of  under-assessment, that  would be  sufficient to give jurisdiction  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 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 irrelevant to the purpose of the section. To this limited extent the action of the Income Tax Officer in starting proceedings under Sec. 34 is open  to challenge  in a  court  of  law.  (See  Calcutta Discount Co.  Ltd. v.  Income Tax Officer Companies District 1, Calcutta  & Anr.(2)  In R. S. Seth Gopikrishan Agarwal v. R. N.  Sen, Assistant  Collector of  Customs & Ors.,(3) this Court repelled the challenge to the validity 1 of the search of the  premises of  the appellant  and the  seizure of  the documents found  there in.  The search was carried out under the authority  of an authorisation issued under Sec. 126 (L) (2) of  the Defence  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  the  ground  that  the authorisation did not expressly employ the (1) (1967] 1 SCR 590. (2) 41 ITR 191. (3) [1967] 2 SCR 340 978 phrase reason  to believe’  occurring in  Sec.  105  of  the Customs Act.  Negativing both the contentions, Subba Rao, C.

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J.  speaking   for  the  court  observed  that  the  subject underlying Sec.  105 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, which are  relevant to  any proceeding  under the  Act.  The legislative policy  reflected in  the section  is  that  the search must  be in regard to the two categories mentioned in the section.  The court  further observed  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.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 Enforcement. The  last part  of the  submission  do.  s  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.      lt was however contended that when sub-sec. (2) of Sec. 37  is   read  in  juxtaposition  with  sub  sec.  (l),  the legislative mandate  clearly manifests  itself  that  before issuing a  search warrant in exercise 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  his belief and  specifying in  such writing, so far as possible, the thing for which search is to be made because Sec. 37 (2) provides that  the   provisions  of  the  Code  of  Criminal Procedure, 1898  (now 1973)  relating to searches, shall, so far as  may be, apply to searches under 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’, 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  mentioned, 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. In other words, it was said that by sub-sec. (2) of Sec. 37, Sec. 165 of 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 (1) 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 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 contention 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 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

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Tax Act,  1961. The Court after referring to the decision of this Court  in Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver(2)  held that  the obligation to record in writing, the  grounds of  the belief as enjoined by Sec. 165 (1), 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 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.(3)      Sec. 37  (2) provides  that ’the provisions of the Code relating to  searches, shall  so far  as may  be,  apply  to searches  directed  under  Sec.  37  (1).  Reading  the  two sections together  it  merely  means  that  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 and ink  in Sec.  37 (2)  has to be negatived in view of the positive  language   employed  in   the  section   that  the provisions relating to searches shall so far as may be apply (1) [1975] 101 ITR 112. (2) [1966] ITR 664. (3) AIR 1976 Cal. 178. 980 to searches  under Sec.  37 (1).  If Sec.  165 (1) was to be incorporated by  pen and ink as sub-sec. (2) of Sec. 37, the legislative draftsmanship  will leave  no room  for doubt by providing that  the  provisions  of  the  Code  of  Criminal Procedure relating  to searches  shall apply to the searches directed or  ordered under Sec. 37 (1) except that the power will be  exercised by  the Director of Enforcement or  other officer exercising  his power  and he will be substituted in place y  f the Magistrate. The provisions of sub-sec. (2) of Sec. 37  has not  been cast  in any such language. It merely provides that the search may he carried out according to the method prescribed  in Sec.  165 (1).  If the  duty to record reasons which  furnish grounds for entertaining a reasonable belief were  to be  recorded in advance, the same could have been incorporated  in Sec.  37 (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 Sec. 165 of the Code by the officer to be  set out in the section. In order to give full meaning to the  expression ’so far as  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 if  a deviation  becomes  necessary  to  carry  out  the purposes of the Act in which Sec. 37 (1) is incorporated, it would be  permissible except  that when  challenged before a court of  law, justification will have to be offered for the deviation. This  view will give  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  Agarwal’s  case.  The  grounds  which induced reason  able belief  therefore need not be stated in the search warrant.      Assuming that  it was  obligatory to  record reasons in writing prior to directing the search, the file submitted to the court  unmistakably shows that there was material enough before  the  officer  to  form  a  reasonable  belief  which prompted him to direct the search. That the documents seized during the search did not provide sufficient material to the officer for  further action  cannot be  a ground for holding

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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,  so far  as possible, the  thing for which the search is to be made, is mandatory and that non 981 recording of  his reasons  would result  in the search being 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 Mills Co. 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  all  because  virtually  for  all  practical purposes, it  can be  said to  have been  overruled  by  the decision of  the Constitution  Bench in  Pooran Mal  etc.  v Director of  Inspection (Investigations) of Income Tax Mayur Bhavan, New  Delhi & Ors.(1) This Court held that ’courts in India and  even in  England  have  consistently  refused  to exclude relevant  evidence merely  on the  ground that it is 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- 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   in  terms   negatived  by   the Constitution Bench. It has been often held that the legality in the  method, manner  or initiation  of a  search does not necessarily mean  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 cautious 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.  State of U.P.(2) 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 (1) [1974] 2 SCR 705. (2) [1963] Supp 1 S.C.R. 408 at 411 982 examine carefully  the evidence  regarding seizure,  but  no other consequence  ensues.  (See  State  of  Maharashtra  v. Natwarlal Damodardas Soni.(1)      In this behalf, the appellant further contended that if the 1  search was  genuine or bona fide for carrying out the purposes of  the Act,  it is surprising that when the matter was before  the  Might  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

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result  in   seizure  of  incriminating  material.  Such  an approach would be a sad commentary on human ingenuity. There can be  cases in  which search  may   fail or  a  reasonable explanation in  respect of the documents may be forthcoming. In Income  Tax  officer,  Special  Investigating  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, 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 Puran Mal’s case held that if the books of account and other documents collected during the search were after words found to be not relevant that by itself does not make the search and seizure illegal. In 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  extraneous.    the  exercise  of  power.  The contention therefore,  must be rejected. Having examined all the limbs  of the  submission,  we  find  no  merit  in  the contention that  the issuance  of search warrant was illegal or the search was illegal and invalid.      It was  next urged  that if  there was no justification for issuing a search warrant, the search under the authority of such  a warrant would be illegal and the respondents 1 to 4 are  bound to  return the  documents. If  the officer  who issued  the  search  warrant  had  material  for  forming  a reasonable belief to exercise the power the search (1) [1980] 4 S.E.C. 669 (2) [1970] 1 S.C.R. 601. 983 cannot be  styled as  illegal and therefore, no case is made out for directing return of the documents 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 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, Jullundur while  respondent No.  6  occupies  the  adjoining house. It  is 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 respondent  and that ’on May 29, 1979, the first appellant submitted a representations to the Chairman, (Central  Board   of  Direct  Taxes  complaining  about  the animosity  of   the  sixth   respondent  towards  the  first appellant and  requested that  those appeals  pending before the sixth  respondent be  transferred to  another  appellate court’.  These   are  all  the  relevant  averments  on  the allegation of  mala  fides.  When  attention  of  the  first appellant was  drawn to  this scanty  material, he  drew our attention to  the averments  in para  6 of  the petition for special  leave   wherein  it   is  alleged  ’that  when  the petitioners were  away from  Jullundur leaving their servant Gyan 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

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tutored by  the petitioner’s  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  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 more  on this aspect save  and except  saying that  the affidavit  of Gyan Chand is  not forth-coming,  that the  name of the friend is not mentioned and 984 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 negatived without further examination,      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  concerned  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 dispelled whatever little doubt was generated in our mind by the submissions  of the  first appellant He referred to Pass Book Account Nos. 132269 and 159431, both issued by the Bank of India  and urged  that what  was mentioned  was  not  the account number  but the  Pass Book  numbers and  the Account Nos. SB  6731 and  SB 7626  both tally  and  therefore,  the submission in  this behalf  is misconceived.  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 to  be built  up that there is some tinkering with the  same.   We  found   the  submission  wholly  imaginary. Therefore, there  is absolutely  no merit  in the contention that there  has been  some tampering with the documents when they were  sealed under  the authority  of  the  warrant  of authorisation issued by the Commissioner of Income Tax.      These were  all the  contentions raised  in this appeal and as  there is  no merit  in any of them, the appeal fails and is dismissed but with no order as to costs. A.P.J.                                     Appeal dismissed. 985