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PETITIONER: RAMANLAL BHOGILAL SHAH AND ANOTHER

       Vs.

RESPONDENT: D.   K. GUHA AND OTHERS

DATE OF JUDGMENT24/01/1973

BENCH: SIKRI, S.M. (CJ) BENCH: SIKRI, S.M. (CJ) RAY, A.N. PALEKAR, D.G. BEG, M. HAMEEDULLAH DWIVEDI, S.N.

CITATION:  1973 AIR 1196            1973 SCR  (3) 438  1973 SCC  (1) 696  CITATOR INFO :  E          1981 SC 379  (62,69)  D          1992 SC1795  (8,13)

ACT: Constitution of India, Art. 20(3)-Whether accused  mentioned in  an F.I.R. is bound to appear before Enforcement  officer to give evidence in connection with the same offence.

HEADNOTE: The point of law being same in both the writ petitions,  the facts of writ petition No. 164 of 1972 are as follows :- The petitioner was the General Manager of United Comm.  Bank till January 17,1968  when  he became its  Chairman  and whole-time Director andafter nationalisation of the  bank, he was appointed Custodian thereof. In 1966, theUnited  Comm.  Bank  had  booked  a   forward exchange contractfor Hindustan Motors for pound  9,32,617 at  the  rate of Is. 529/32d. per  rupee.   Thereafter,  the rupee  was devalued and on May 24, 1971 the  petitioner  was served  with summons under s. 19-F of the  Foreign  Exchange (Regulation)  Act, 1947 to give evidence in an enquiry  held by respondent No. 1 into certain offences under the Foreign Exchange Act.  The petitioner was examined on June 3, 16,and 17, 1971. According to the petitioner, the entire examination on these days related to the booking by the bank of the said  forward exchange contract. On August 31, 1971, the petitioner was arrested under s. 19B of the Foreign Exchange Act.  Sub-s. 1 of S. 19B of the  Act provides that "if any officer of Enforcement .... has reason to  believe that any person in India etc., has been  guilty of an offence punishable under the Foreign Exchange Act, he may arrest such person and shall, as soon as may be,  inform him  of  the ground of such arrest." Sub-sec.  (2)  provides that  every  person arrested under sub  section  (1)  shall, without  necessary delay, be taken to a Magistrate.   Sub-s. (3)  empowers the officer concerned to release  an  arrested person on bail and he has the same powers and as that of an 0/c  of  a  police  station.  The  grounds,  served  on  the

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petitioner, for the offence under s. 4(2), and , under s. 22 of the Act punishable under s. 23, are elaborate.  Paras  31 to 40 of the grounds of arrest are inter alia,  :-conversion of  pound  sterling  not  at  the  prescribed  rate,   false information  furnished to the Reserve Bank in  contravention of Sec. 22 of the Act etc. [The  question  arose whether after these grounds  had  been served  on  the petitioner, it could be said that he  was  a person  accused  of  an offence within  Art.  20(3)  of  the Constitution]. The   petitioner  was  later  produced  before   the   Chief Presidency  Magistrate  who  released him  on  bail  with  a direction that he should ,Contact the investigating  officer from time to time. Thereafter, an F. I. R. was recorded under s. 154 Cr.P.C. by the D.S.P., C.B.I., New Delhi and an order was obtained from the 439 Chief   Presidency   Magistrate  Calcutta   permitting   the investigation  to, be made under s. 155 (2) Cr.  P.  C.  The offences  alleged in the F. 1. R. are s. 120B read  with  s. 420  1. P. C. and under s.4 (2) read with. s. 23(1)  (b)  of the  Exchange Act.  The names and addresses of the.  accused were  given  as  the Management and other  officers  of  the United  Commercial Bank and the Management and  officers  of Hindustan.  Motors Ltd. On  April  17,  1972  another  summons  was  issued  to  the petitioner under s. 19F of the Exchange Act to appear before the  Enforcement Directorate and to give evidence  regarding the transaction of Exchange: Contract booked from  Hindustan Motors Ltd. After objecting to appear before the Enforcement Directorate as,  witness the petitioner filed the present writ  petition before this Court.  It was contended by the petitioner  that after  the Enforcement officer had examined  the  petitioner and  put  his  conclusions in the  grounds  of  arrest,  the petitioner  was definitely a "person accused of an  offence" within  the  meaning of Art. 20(3) of  the  Constitution  of India  and  at any rate, the petitioner was  accused  of  an offence  when  the F.I.R. was recorded  and  therefore.  the summons dt.  April 17, 1972 was illegal. Allowing the petition, HELD  :  (i) It is well settled that with the lodging  of  a First  Information Report a person is accused of an  offence Within the meaning of Art. 20(3). [445E-F] Ramesh Chandra Mehta v. State of West Bengal [1969] 2 S.C.R. 461 Raja Naravanlal Bansilal v. Manack Phiroz Mistry  [1961] 1  S.C.R.  417 and M. P. Sharma V.  Satish  Chandra,  [1954] S.C.R. 1077, referred to. (ii)Although  the  petitioner  is a person  accused  of  an offence   within  the  meaning  of  Art.  20(3),  the   only protection that Art. 20(3) give& to him is that he cannot be compelled to be a witness against himself; but this does not mean  that  he need not give information  regarding  matters which do not tend to incriminate him. [446G-H] State  of Bombay v. Kathi Kalu Oghad, [1962] 3 S.C.R.  1032, referred to. Therefore  in the present case the summons must not  be  set aside.   The petitioner must appear before  the  enforcement Directorate  and  answer such questions as do  not  tend  to incriminate him. [447C-D]

JUDGMENT:

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ORIGINAL JURISDICTION : Writ Petitions Nos. 164 and 165  of. 1972.  Petitions  under Art. 32 of the Constitution of  India  for the enforcement of fundamental rights. A.K.  Sen,  (in W.P. No. 164) B. Sen, (in W.P.  No.  165) Krishna  Sen,  S.  R. Agarwala and R.  K.  Khanna,  for  the petitioners. F.S.  Nariman, Additional Solicitor-General of India  and S. P. Nayar for the respondents. The Judgment of the Court was delivered by SIKRI,  C.J. The same point of law arises in both  the  writ petitions and it will suffice if facts in writ petition  No. 164 of 1972 are set out.  The petitioner, Ramanlal  Bhogilal Shah, was the Gene- 440 ral Manager of United Commercial Bank Ltd. till January  17, 1968 when he became the Chairman and whole time Director  of the  said  bank.   Upon nationalisation  of  the  bank,  the petitioner was appointed Custodian thereof and he  continued as Custodian till September 1, 1971. On  June  4, 1966 the United Commercial Bank  had  booked  a forward  exchange contract for ’Hindustan Motors  for  pound 9,32,617 at the rate of 1s. 529/32d, per rupee.  On June  6, 1966,  the  rupee  was  devalued.   On  May  24,  1971  the, petitioner  was  served with summons under S.  19-F  of  the Foreign Exchange (Regulation) Act, 1947-hereinafter referred to as the Exchange Act to give evidence in the enquiry which Shri  D. K. Guha, Deputy Director, Enforcement  Directorate, was  making  into certain offences under the  Exchange  Act. The  petitioner was examined on June 3, 1971, June 16,  1971 and June 17, 1971. According  to the petitioner, the entire examination on  the said  dates related to the booking by the United  Commercial Bank  of the aforesaid forward exchange contract dated  June 4,  1966.  On August 31, 1971, the petitioner  was  arrested under’s. 19B of the Exchange Act.  Sub-section (1) of S. 19B provides  that  "if any officer of Enforcement.. . .  .  has reason  to  believe that any person in India or  within  the Indian  customs  waters  has  been  guilty  of  an   offence punishable under the Exchange Act, he may arrest such person and shall, as soon as may be, inform him of the grounds  for such  arrest." Sub-section (2) provides that  "every  person arrested  under sub-section ( 1) shall, without  unnecessary delay,  be taken to a Magistrate." Sub-s. (3)  empowered  an officer of Enforcement arresting any person to release  such person on bail or ,otherwise.  In this connection he has the same  powers  and is subject to the same provisions  as  the officer-in charge of a police station. The   grounds  of  arrest  served  on  the  petitioner   are elaborate.  These give detailed reasons why the  enforcement officer had reasons to believe that the petitioner had  been guilty of an offence under s. 4(2)  and under S. 22  of  the Exchange Act punishable under s.   23   thereof.    We   may reproduce paras 31 to 40 of the grounds of arrest.               "31.   AND WHEREAS by such criminal  acts  the               Bank converted pound sterling not at the  rate               prescribed  by  the Foreign  Exchange  Dealers               Association of India effective from 8-6-66  as               aforesaid  but at the rate of Rs.  1-5  29/32d               Re. 1 during the period of 8-7-66 to 3-3-67 on               the total amount of pound 9,32,617-0-od;               32.AND  WHEREAS the aforesaid amount of  Pound               9,32,617-0-0d  has been converted into  Indian               cur-                                    441

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             rency at rates other than the rates authorised               by the Reserve Bank of India;               33.AND WHEREAS such unauthorised conversion               has beenmade    without   fulfilling    the               condition prescribed in Section XXVIII of the               Exchange  Control  Manual  published  by   the               Reserve Bank of India as aforesaid.               34.AND   WHEREAS  such  conversion  of   pound               sterling into Indian currencies has been  made               in  contravention of Section 4(2) of the  said               Act;               35.  AND  WHEREAS false information  has  been               furnished to the Reserve Bank of India thereby               contravening  the provisions of Section 22  of               the. said Act;               36.AND  WHEREAS the aforesaid  contraventions,               have  been committed by the said Bank or  have               taken place with the consent of the said R. B.               Shah;               37.AND  WHEREAS at the time of  the  aforesaid               contraventions were committed, the said R.  B.               Shah  was in charge of, or was responsible  to               the  United  Commercial Bank Limited  for  the               conduct of the business of the said Bank;               38  AND WHEREAS the said R. B. Shah failed  to               prove  in course of his statements made  under               Section 19F of the said Act before Shri D.  K.               Guha, Deputy Director of Enforcement that  the               contravention took place without his knowledge               or  that  he exercised all  due  diligence  to               prevent   the  aforesaid   contravention,   as               required under Section 23C of the said Act.               39 AND WHEREAS, in view of the aforesaid facts               ,and    circumstances,    1,    Onkar     Nath               Chattopadhyay,      Enforcement       Officer,               Enforcement    Directorate,   Department    of               Personnel, Cabinet Secretariat, Government  of               India,   being  an  officer   of   Enforcement               authorised   by  the  Central  Government   to               exercise the powers under, Section 19B of  the               said Act, have reason to believe that the said               R.  B.  Shah  in  India  has  been  guilty  of               offences under Section 4(2) and under  Section               22 of the said Act punishable under Section 23               of the said Act;               40.NOW,  THEREFORE,  I arrest the said  R.  B.               Shah on the grounds stated herein above, today               the  31st,  August, 1971 at 10.35  a.m.  under               Section   19E(1)  of  the   Foreign   Exchange               Regulation Act, 1947." The question arises, with which we will presently deal with, whether  after  those  grounds  have  been  served  on   the petitioner, 442 it could be said that he was a person accused of an  offence within art. 20(3) of the Constitution. The  petitioner  was produced before  the  Chief  Presidency Magistrate,  Calcutta, on August 31, 1971, who released  him on bail of Rs. 10,000 with the direction that the petitioner should contact the Investigating Officer every alternate day during the next two weeks and thereafter as and when  called for. On  September  6,  1971, the  Chief  Presidency  Magistrate, Calcutta, recorded :               "Both   accused  are  on  C.B.  and   present.

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             Perused  report submitted by I.O.  I.O.  prays               for  three months time for submitting  further               report.    Time  allowed  till   6-12-71   for               submission of report."               On December 6, 1971, the order is recorded  as               follows               "Both   accused  are  on  C.B.  and   present.               Perused   report  submitted   by   Enforcement               Directorate.  Further three months time.  Time               allowed   till   6-3-72  for   completion   of               investigation.   I.O. is directed to  expedite               and file complaint, if any, at an early date."               On March 6, 1972, it was inter alia ordered               ".......Since  no regular complaint  has  tiff               now been filed, personal exemption prayed  for               is allowed.’               The order further proceed               "Considered  I.O  remand report.   He  submits               that concerned documents remain sealed in that               Court  and He further says complaint  will  be               filed soon after the matter is disposed by the               Supreme  Court.  Considering such  aspects  of               the  question I.O. is allowed time  till  6-72               for a report about progress of  investigation’               ;  and  submission of, regular  complaint,  if               any, against;, the accused persons.’ It  is alleged in the petition that "pursuant  to  enquiries made  in this behalf, your petitioner has: I come  to  learn that  the  Supreme  Court proceedings referred  to  by  the, respondent , No. 4 before the Chief.  Presidency Magistrate, Calcutta,  as  recorded in his order dated  6th  March  1972 arose out of a writ petition filed by Hindusthan Motors Ltd. before the Hon’ble High Court at Calcutta challenging  inter alia  the search at the premises of Hindusthan  Motors  Ltd. conducted  by  the  Enforcement  Directorate  in  or  about, October  1969  and  the seizure of  documents  is  a  result thereof."  In  the  course of this  enquiry  the  petitioner learnt   that  a  case  had  been  registered  on  a   First Information Report dated 443 November 9, 1971, recorded under s. 154 of the Criminal Pro- cedure  Code  and an order dated November 25,1971  had  been obtained,  from the Chief Presidency  Magistrate,  Calcutta, permitting the investigation to be made under s. 155 (2)  of the  Code  of Criminal Procedure.   This  First  Information Report deals with the forward exchange contract purported to have  been entered on June 4, 1966 by M/S Hindusthan  Motors Ltd.  and  the  United Commercial Bank  Ltd.   The  offences alleged  in  the first Information Report are s.  120B  read with s. 420 I.P.C., and under s. (2) read with s. 23(1)  (b) of  the  Exchange Act, and the names and  addresses  of  the accused  are given as the Management and other  officers  of the United Commercial Bank and the Management and  officers: of the Hindusthan Motors Ltd. On  April 17, 1972 another summons was issued, to the  peti- tioner  under s. 19-F of the Exchange Act to appear  before, the  Deputy Director, Enforcement Directorate, on April  28, 1972  to  give  evidence  relating  to  the  transaction  of exchange contract booked from Hindusthan Motors Ltd. on June 4,1966.   The  petitioner  wrote  to  the  Deputy   Director submitting  that the summons was violative of art. 20(3)  of the  Constitution.   In  this  connection  he  submitted  as follows               "I remind you that after examining on the  3rd               June, 1971, 16th June. 1971 and 17th June 1971

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             proceedings  have  been initiated  and  I  was               arrested on the 3 1st August, 1971 and in  the               grounds  of  arrest  one  of  the  grounds  of               accusation   mentioned  is   the   transaction               referred ’to by you in the summons." The petitioner requested the Deputy Director to withdraw the summons........ On   April  22,  1972  the  Deputy  Director  informed   the petitioner that the contentions had no substance at all.  He further  informed the petitioner that the summons issued  on April  17,  1972 could not be withdrawn  and  requested  the petitioner to comply with the name. The  petitioner  thereupon  filed the  present  petition  on April,27, 1972. The learned counsel for the petitioner, Mr. A. K. Sen,  con- tends  that  on the facts given above  the  petitioner  fell within  the description of a "person accused of an  offence" within  the meaning of art. 20(3).  He contended that  after the Enforcement Officer had examined the petitioner and  put his conclusions in the grounds of arrest, the petitioner was definitely accused of an offence under the Exchange Act.  He next  contends that at any rate, the petitioner was  accused of an offence when the First 13-L796Sup.C.I./73 444 Information Report was recorded under S. 154, Cr.  P.C.,  by Shri  J.  N.  Prabhakar, Deputy  Superintendent  of  Police, Central    Bureau   of   Investigation,    Special    Police Investigation Unit, New Delhi. The learned Additional Solicitor General says that the first point  is concluded by the decision of this Court in  Romesh Chandra,  Mehta  v.  State of West  Bengal.(1)  He  strongly relies on the following passage at p. 479               "It was strenuously urged that under s. 104 of               the Customs Act, 1962, the Customs Officer may               arrest  a  person  only if he  has  reason  to               believe that any person in India or within the               Indian  Customs waters has been guilty  of  an               offence  punishable  under  S.  135  and   not               otherwise  and  he  is bound  to  inform  such               person  of the grounds of his arrest.   Arrest               of  the  person who is guilty of  the  offence               punishable under s. 135 and information to  be               given  to him amount, it was contended,  to  a               formal  accusation  of an offence and  in  any               case the person who has been arrested and  who               have  been  informed  of  the  nature  of  the               infraction  committed  by him  stands  in  the               character of an accused person.  We are unable               to agree with that contention.  Section 104(1)               only  prescribes the conditions in  which  the               power of arrest may be exercised.  The officer               must have reason to believe that a person has               been guilty of an offence punishable under  S.               135,  otherwise he cannot arrest such  person.               But by informing such person of the grounds of               his  arrest  the  Customs  Officer  does   not               formally accuse him with the commission of  an               offence.   Arrest and detention are  only  for               the purpose of holding effectively an  inquiry               under S. 107 and 108 of the Act with a view to               adjudging   confiscation   of   dutiable    or               prohibited goods and imposing penalities.   At               that  stage  there  is  no  question  of   the               offender against the Customs Act being charged

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                           before   a   Magistrate.    Ordinarily    after               adjuding penalty and confiscation of goods  or               without doing so, if the Customs officer forms               an   opinion  that  the  offender  should   be               prosecuted  he may prefer a complaint  in  the               manner provided under s. 137 with the sanction               of  the  Collector  of  Customs  and  until  a               complaint is so filed the person against               whom an inquiry is commenced under the Customs               Act  does  not  stand in the  character  of  a               person accused of an offence under s. 135. (1) [1969] 2 S.C.R. 461. 445 The  learned counsel for the petitioner,  however,  contends that  the facts here are different.  He says that under  the Exchange Act the position is slightly different.  He further says that in Romesh Mehta’s case(1) no enquiry had been made while  in the present case an enquiry under s. 19F had  been made  and  the  Deputy  Director  had  come  to  a  definite conclusion that the petitioner was guilty of an offence.  He further says that the next step would be an enquiry under s. 23 of the Exchange Act which might result in a penalty under s. 23(1)(a) or the case being sent to a Court for trial.  He says  that  as  far as the enquiry  under  s.  23(1)(a)  is concerned, it is an enquiry in respect of art offence and no further charge or complaint is necessary before  undertaking the  enquiry.  The contends that the protection  under  art. 20(3)  extends  not  only to criminal trials,  but  also  to trials  of all offences under the Exchange Act  because  for the  same  offence one person may be convicted  and  penalty levied  under  s.  23(1) (a) or convicted  by  a  Court  and sentenced to imprisonment. These aspects have not been considered by this Court in  any case  which  has been brought to our notice, but we  do  not think  that it is necessary to dispose of these  contentions because  we are of the opinion that the second point  raised by Mr. A. K. Sen must prevail. It  is  well  settled  that with  the  lodging  of  a  first information report a person is accused of an offence  within the  meaning  of  art. 20(3).  In M.  P.  Sharma  v.  Satish Chandra(2) where search warrants were issued against persons who  had  been included in the category of  accused  in  the first information report, Jagannadhadas, J., observed at  p. 1088:               "Nor  is  there any reason to think  that  the               Protection  in  respect  of  the  evidence  so               procured is confined to what transpires at the               trial  in the court room.  The phrase used  in               article 20(3) is "to be a witness’ and not  to               "appear  as a witness"-.  It follows that  the               protection afforded to an accused in so far as               it is related to the phrase "to be a  witness"               is  not  merely  in  respect  of   testimonial               compulsion  in  the court room  but  may  well               extend   to  compelled  testimony   previously               obtained from him.  It is available  therefore               to  a person against whom a formal  accusation               relating  to the commission of an offence  has               been  levelled which in the normal course  may               result   in   prosecution.   Whether   it   is               available to other persons in other situations               does not call for decision in this case." (1) [1969] 2 S.C.R. 461. (2) [1954] S.C.R. 1077.

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446 In  Raja Narayanlal Bansilal v. Maneck Phiroz Mistry (1)  it was observed :               "Similarly, for invoking the   constitutional               right    against    testimonial     compulsion               guaranteed under Art 20(3) it must appear that               a formal accusation has been made against  the               party  pleading  the  guarantee  and  that  it               relates to the commission of an offence  which               in   the   normal   course   may   result   in               prosecution." In  Romesh Chand Mehta v. State of West Bengal(2) Shah,  J., after reviewing a number of authorities, observed at p.  472 :               "Normally a person stands in the character  of               an ,accused when a First Information Report is               lodged  against him in respect of  an  offence               before an Officer competent to Investigate it,               or  when a complaint is made relating  to  the               commission  of an offence before a  Magistrate               competent to try or send to another Magistrate               for trial of the offence." The  Additional Solicitor General says that  the  petitioner had  not  been specifically named as accused  in  the  First Information Report and, therefore, he is not entitled to the protection  under Art. 20(3).  We are unable to  agree  with him in this respect.  The petitioner was the General Manager of  the  United Commercial Bank and it was  alleged  in  the grounds  of arrest that the petitioner was in charge of,  or was  responsible to the United Commercial Bank Ltd. for  the conduct of the business of the said Bank, and that he failed to  prove  in  course of his statements made  under  S.  19F before Shri D. K. Guha, Deputy Director of Enforcement, that the  contravention took place without his knowledge or  that he  exercised  all due diligence to  prevent  the  aforesaid contravention, as required under S. 23C of the Exchange Act. In view of these allegations it is idle to contend that  the petitioner   was  not  included  in  the   expression   "the management and other officers of the United Commercial  Bank Ltd."   We  have  already  mentioned  that  in   the   First Information Report it is the same forward Exchange  Contract which is the subject-matter of charge. Although we held that the petitioner is a person accused  of an  offence  within  the meaning of  art.  20(3),  the  only protection that art. 20(3) gives to him is that he cannot be compelled  to be a witness against himself.  But  this  does not mean that he need not give information regarding matters which do not tend to incrimi- (1) [1961] 1 S.C.R. 417 ; 438. (1) [1969] 2 S.C.R. 461                             447 nate  him.  This Court observed in State of Bombay V.  Kathi Kalu Oghad(1) as follows.:               "In  order  that  a testimony  by  an  accused               person   may  be  said  to  have  been   self-               incriminatory  the compulsion of  which  comes               within the, prohibition of the  constitutional               provision,  it-  must be of such  a  character               that by itself it should have the tendency  of               incriminating  the  accused, if  not  also  of               actually doing so.  In. other words, it should               be  a statement which makes the  case  against               the    accused   person   alteast    probable,               considered by itself." Therefore we are unable to set aside the summons.  The peti-

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tioner  must  appear before the Deputy Director  and  answer such  questions  as  do  not tend  to  incriminate  him,  as explained by this Court. The petition is accordingly allowed to the extent that it is declared  that  the  petitioner is a person  accused  of  an offence within art. 20(3). The  facts in Writ Petition No. 165 of 1972 are similar  and the same declaration is given. S.C.                      Petition allowed. (1) [1962] 3 S.C.R. 10 32. 448