State of Maharashtra v. Jayantilal Lal (and others)

431 . # .. STATE OF MAHARASHTRA _v._ _IA_ YANTl LAL AND OTHERS _January_ I 7; 1948 [S; MURTAZA FAZAL ALI AND RANGANATH MISRA JJ.). . ........._ _Forward Cont;acts (Reguliition)_ _ACt,_ i9_52 _Section 22A .. and 22B as_ _if!serted bji_ - Y _·1he·Amending Act_ 6_2 _of_ 1960, .:__ _Whether the two newly iitserted sections exclude tht_ ..... \, _irpplicatiOn_ _of secii"on_ _S(i)_ _Of Criminal_ _Procedure_ _f!ode--Whelhf!'.'_ _the pte'sumptio"ns._ _provided under_ _section_ 228 _of the Act would be_ _available in_ respect of /:Jaoks of account_ _and_ _docume':lfS_ seized_ _ilz_ _investigations_ _u11de.r_ _the_ _Code,_ _-'.where _actio'n_ _has_ _not_ _been_ _taken under section_ 22A. Jf Dismi~sing t.he appeal by Speci8.I Leave, the". Court,_ HELD : · 1 By s~tions 22 A and 22B, inserted into· the Forward Contracts (Regulation) Act; 1952, by the Amending Act 62 of 1960, the app!ication"ofthe provisibns of secti0n_5(2) of the Criminal .Procedure Code in resPect o.f offences under the Act was not excluded. Therefore, even with these provisions.in the Act, it wa1 . open to··the prosecution to make investigations under the Code and in exercise of the powers vested·under Section _165_ ther~f, sear-ch..at)d seizure· could be effectc:;d . [436H, 437 A]· 2. Seetion 22A of the Forward:.Contract (Reglllaiion) Act is a ·Special pro vision prescribing a . P"rticular procedure .. Section 22B(1) doeS refer. to ~ documents sei~d from any pla. ce as referred to ins. 22Aq). dr<lin8ril.y, iri a criminal ' \ pr~secutio·n the. burden to· prove the charge is on t~e pros"ecutor., A special rule of cvid~ce·has been provid~d by raising a presumption as a result of _which the burden whichordinitrily lay o~ the prOsecutioh has bee·n shifted to the defence. [~5C-E] .B c D E F G H The mannC~ in· -which~ the· two riew .. pr~vi~ions .have come into thC .~ct." theplicement of tbe ·two proyjsionS; reference to books of aCcollnt an.Ci dOcuffientJt seizea from any place in s. 22B(l) which are words used· in s.22A(i), and tho fac -that Parliament has prescribed a specia1 procedute of authorisation by a magistrate and has prescribed s.pecia~· cred_cnce. to be given to these documeiits seized pursuant to the particu1.ar procedure prescribed, Jead to ·the oti1y conclusion that. the benefit of s. 22B of the Act is confined to books of account and doCu.menrs which· have.been· seized Pursuant to a warrant authorising a police officer pot below the ~artk ·of sub-inspector as prescribed in s.22A(l) of the Act .. A s~ia1. mode wa·s prescribed requiring magisterial warrant; al~thotisation of a police officer not.below the rank_ ·of a sub-inspector, the Plaee to be searched.was required to be specified in warrant; magisterial cOntrol was prescribed over·the investigation and when these condi~ . . tions Weft'. satisfied,.the special rule of evjdenCe beca~e S:pplicable,. .. "[435 ~-G] ., . Admittedly the~. is n~ indication in. s.",22B _of_ the. Ac't as .to Whether eQii:ies in 432 SUPREME COURT REPORTS [1984] 2 s.c.R. A the books of account and doculnents seized without the aid of s.22A(l} would have the benefit of such presumption. But since a special procedure has been indicated in -s.22A and s. 22ij which is with referenc;e to s. 22A has.provided the special n1ode .of evidence, that in order to have the benefit of s. 22B of the Act, the prosecution must have carried on the' search and seizure of.ihe books of account and documents in the manner J:?fescribed uncfef s. 22A(l) of the Act. Unless the st)ecial procedure has b~n followed, the special rule of ev:idencd· under s. 22B of the Act would not B be attracted: [ 4J5H, 4l6A-Bl 3. Since it would be open to the prosecution to carry on investigation of offences under the nor1nal pfov:isions _of tha Code as· also by invoking the Special Provisions in s. 2iA of the Act, 'two separate positiods ·would arise 'vith reference 1 to seiz.ed books of account and .other'documents. Whens. -22A of the Act has been invoked the presumpti_on under ·s.22B of the Act would. arise. when investigation C has been carried under the Code without the aid of s. 22A of the Act, the presumption . "-\ would not arise and the prosecution will have to prove the documents according to ·' the Ordinary· rule of evidence. There is nothing anon1~lous because in one· case the ... D norinal rule of~evidence would apply and in.·the other, whefe the spedal _inode has bee~ invoked, the presumptions would arise. Such a situatiOn is no.t unkno\vn in law. [~36 B,D,El . _State of.U.P.'_ _&_ _Anr._ v. _Cha1nbers_ _ofCofnmerce_ _(Regd.),_ _Chandausi,_ _District_ _Moradaba4_ & _Ors._ (1970) All. LT. 182; _M.R._ _Pillai_ v. _M/s. Moti/al_ _Vrijbhukhandas_ & _Ors.,_ AIR 1 '70 Bont 24 approved. _The_ _Bullion_ & _Agriculrural_ _Produce_ _ExChange_ _Private_ _Ltd._ v. _The_ _Forward_ - Marke~s _Commission,_ _Bombay&: 'Jrs.,_ AIR 1968 338 overruled. E. •i lCRIMlNAL APPELLATE JURISDICTION ! Criminal Appeal No. 447of1979. )' . ###### . Appeal by Special leave from the Judgment and Order dated . the lst/'>nd February, 1979 of_ the Bombay High Court (Nagpur. Bench) . _·i._ in Criminal Appeal No .. 76, _?1-30,_ 33 and 36 of 19'.75 and Criminal F Revision Application Nos. 82 & 83of1975: . _1).P._ _Rana_ and _M.N._ _Shroff_ for the Appellant. _N.M._ _Ghatate_ and _V.D._ _Deslipande_ for tlie Respondents. G The Judgment of the Court was delivered by · RANGANATH MISRA,· J. This appeal by special leave at. the instance of the State of Maharashtra is directed. against the decision . of a Full Bench of the High Court of Bomba!Y dealing with an interes- ~ tillg question under the l<orward Contracts (Regulation) Act, 1952 H ('Act' for sh6rt). Several prosecutions were launched against tha respondents for offences punishable under sections 20 and 2L of the, MAHARASHTRA _v._ JAYANTl LAL _(Rangtinath_ _Misra,_ _J.)_ 433 Act on the. basis of investigaiion carried under section 5(2) of the **A** Code of Crim;nal Procedure, 1898 ('Code: for short).and seillirecif .documents as a result of search conducted under s.165 of.the Code. **B** **c** **D** **E** **F** **G** **H** .. ## The Full Bench has come to· the following. conclusions _(State_ _of Maharashtra_ v. _Jayantilal Popat/al_ . ' ~ _Chandrani,_ . _etc)">':_ . (!) By sections 22A and.21B inserted into the Act by Amen ding Act 62 of 1960, the application of the provisions of s.5(2) of the Code in respect of offences under the Act was. not excluded. Therefore, even with these provisions in the Act it was open to the. prosecution to . make' investigation. under the Code and in exercise of powers vested under s.165 thereof search. and seizure could be effected; (2) The manner of search and seizure under the Code and under s.22A of the Act were different. The new provisions were inserted into the Act with a view to obviating· the difficulties in successfully prosecu!irtg the delinquents. for offences under the ACt ; - (3) T·, ne presumption contemplated in s. **22B** is confined to books ·of account and other docJiments ·seized pursuant to a warrant issued.under s.:22A (1) of the Act and not to documents seized iri exercise of powers under the Code. The High Court referred to an earlier decision of the Division Bench of the same Court where it had been held that the insertion of the two provisions by Act 62 of 1960 did not .have the effect of. excluding the application of the Code to prosecutions under the Act · . but in view of the conclusions indicated above, it did not agree with (1979) Cr!. L. ;, 1231. . Two cases ended in conviction anc\ seven prosecutions resulted in acquittal. Against the conviction two separate appeals we~ c.arried to the Court of Sessions which were dismissed. . The convicted accused carried two cdminal revisions to tl.ie High Court. Against acquittal in other prosecutions the State preferred ·appeals to the High Court. The seven criminal appeals and the two criminal revisions were ultimately referred to ~ Full Bench for deciding the question raised, viz., as to whether or not the cases in question would be governed by t.he provisions of s.21B of the A.ct. 434 SUPREME COURT REP OR TS . [1984] 2 s.c.R **'A** the earlier, view of th~ Division Bench ihat 'the presumption under s. 22B of the Act also. e_xtended to docu.ments seized in invesiigation . under tiie Code without the aid of s.22A of the Act. ### · **B** ' ### . Neither counsel contended before us _that the insertion of ss. 2_2A and **22B** had the eff~c.t o.f excluding the application of s, 5(2) of the Code. We are in agreement with th<: view expressed by the Fun Bench .that the provisions of th~ Code still apply to investigation of offences· under the .Act. - _:_ ... - " . The only question ;_,hich has bee~ seriously debaied at tlie Bar is as to whether the presumptions' provided under s. ·22B of the Act **C** ·would be available. in.respect of. books _o(_ ace-0unt and documents seized in .investigations· under the Code where action has ·not been taken under s. 22A of the Act ? The two sections inserted by Act 62 ·of 196_0 provided : - - . . . **D** **E** **F.** **G** ' #### **H** (2) The provisions of the Code -0f Criminal Procedure, . 1898, shall, s-0 far as may be, apply to any searth or seizure made under sub-section (!) as they apply to any s·eaich or ·• ·seizure .inade under the authority of a warrant issued under section 98 of the said Code; ' :22B. (1) Where arty_ b_ookS of accoun,t or ·other docu, ments are· seized from any place and ihere are entries _therein making reference to quantity., qnotati_orts, rates, _months of delivery., receipt or payment of differences· or sale or purchase :or goods or option in g(\ods, such books of account or other - documents shall be admitted· in evide11ce without witnesses having to appear to prove the same;' and· such entries shaH be. _prima_ _fade_ evidence of the matters, transactio_ns. and aecou~ts purported to be iherein, record_ed; "22A. . (1) Any presidency magistrate _oi_ a magistrate of the. first ·class may, by warrant, authorise any police officer not below the rank of sub'inspector to. enter upon ~nd search any place where books. of acco1.mt. or other docume_nts relating· to forward contracts or options in goods entered into in contravention of the provisions of this _:,\ct,_ may be or may be reasciuably suspected, to be, and such·· police· officer may seize any such book ·;,r document, if in his opinion;, it relates_ to any such forward contra(:! or option in . goods; MAHARASHTRA _v._ JAYANTI LAL _(Ranganath_ _Misra,_ J.) 435 **A** **B** .~ . - _)_ ##### [. ] [( ] ## ' (2) In any trial for an offence punishable under section 21, ·it shall be presum~d, until the . contrary ·is · proyed, that the place in which the books of account or other documents referred to in sub-section(J) were seized, was used, and that the pe~wns found therein were present, for the puq1ose. of co~·mitting the said offence." · . .. . There is no dispute that these provisions. came >to be inserted· when it became difficµlt to successfolly prospcute. offender.! under "the Act on account of want ;of evidence, particularly with reference to the .. accounts w1 d oth~r documents. Both _the sections .\vere intro _duced at the same time. · Section 22A(I) empe>wers the presiqency magistrate cir a magistrate of the first. class, b.y warrant, to authorise - C . .a· police officer not" below the rank of a sub-i.nspector ·to en_ter_ upon and search any place where books o.f,iccount or oiher documents relating to forward· contracts o.r options i'n goods · entered into in contravedtion of the ptovisio~s of the Act may be or may reasonably ·be suspected to be availabie. This indeed is a special provision pres~ cribing a particular procedure.· Section 228(1) does refer." to docu- . **D** . ments seized from any place as referred to in s. 22A(I) .. Ordinai:ily, in a criminal pro8'cl1tion the burden to prow the charge is .on the . prosecritor. A speciai rule of evicjence has been provided l)y raising of a presumption as a result of whi~h the. burden which ordinarily lay on .the proseeut;on has been shifted ·to the defence. The manner in. which the.·two new provisions have come into the. Act, the placement **E** of the two provisions, reference to: bo.oks. of "account and documents seized from any place in s. 228(1) which are words used in s.~2A(l), . ·and the fact that Parliament has prescribed a,special procedure of . authorisation by a magistrate and has. prescribed special credence to be given to these documents. s.eized _j:Jurlsuant fo the particular procedure prescribed, lead to the only concusion that the benefit of **F** s.:?2B of the Act is confined to books of account arid documents which **have** **been** ~-eized **pursuan_t** **to** **_a** **Warraflt** **authorising a police** **officer** not below the _rank of sub-inspector as. prescribed in s. J.:iA(l) of the . 'Act. A special mode wa·s prescribed requiring magisterial warrant, . authorisation of a police officer not below the rank of a sub-inspect01, **rllagistefial** the pliice .to be searched wasdequfred to. be **control** w~·s **pr0esCribed** ov~! **the** **investigatio·n** spe_cified iti **and** warrant· whe~ **G** **rllagistefial** **control** w~·s **pr0esCribed** ov~! **the** **investigatio·n** **and** whe~ these conditions ·were satisfied, the. special ·rule of exidence became applicable. Admittedly there is no indication ins, _22B_ of the Act a~ to whether **H** entries in the books of acceµnt and documents .seized without the aid . . 436" SUPREME COURT REPORTS [1984]2 s.c.R. - A . ofs. 22A(l) would have the benefit of such presumption. But since a ~pecial procedure has been indicated in s. 22A and s. 22B which fs with reference to s. 22A has provided the special·modt of evidence, • we agree wi.th the view of the Full Bench. that in order to hav.e the benefit of s. 22B of the Act,.the prosec1ition must have carried on the search and seizure of the.books of account and documents i~ the B . manner prescribed under s. 22A(l) of the ·Act. Unle.ss the special procedure has been followed', the special rule of evidence under s. 22B of the Act would not be attracted. 1 _·1_ r . c D E F G As we have held that it would lie open to the prosecution to carry o'n investigation of'offences under the normal provisions of the Code as also by invoking the special provisions ins. _22A_ of the Act, . · two separate. positions would arise with reference to seized books of accotini and other documents. Wheu s. 22A of the Act has been invoked the presumption under s. 22B of the Act would arise. When investigation has been carried under the Code without the aid of s.:22A of the Act, the presumption would not arise and the prosecu- . tion will have to prove the documents according to the ordinary rule' of evidence. It was canvassed before us that such an anomalous position could not have been intended by Parliament and it must have been the legislative intention to extend the benefit of s. 22B to books of account and documents seized _·by_ the prosecution with or without the aid of s. 22A of the Act.· We are ·not inclined to accept this submission for the rei'sons we have indicated and in. our 0pinion there is nothing anomalous because in one case. the normal rule of evidence woulci apply and in the other, where the special mode has been invoked, the pres.umptions would arise. Such a situation is not unk11own in law and we uphold the view oHhe Fuli Bench. At the he~ring some decisions of the d.ifferent High Courts were placed before us. A learned single Judge in _the_ _Bullion_ _&_ . _kriculiural Produce Exchange Private Limited_ v. _'Phe Forward Markets_ _Commission, Bomba]'_ _&_ _Ors;,_ ' [1 ] l took the view that search conducted without the requisite warrant from a magistrate was _ab initio_ void.' 'I~ view of the conclusions we hav·e reached, this decision is certainly bad and canriot be accepted as laying down good law .. In _State._ _of_ _U.P._ _&_ _.A.nr._ v. _Chambers_ _of Commerce (Regd.). Chandausi, District_ _Moradabad._ _&_ _01's.,_ <zl a Division Bench had taken the view that under s. 5(:2) of the Code offences under the Act could still .be investigated H (I) A.I.R. 1968 Born. 338. (2) 1970 All. L,J. 182. .,;;' - MAHARASHTRA _v._ JAY ANTI. LAL _(Rangdnath·Misra,_ J.) . 437 and s."165 of the. Code was not inconsistent with but supplemental A . to s, 22A of the Act. So far as this decision goes .there is nothing ii1cori.sistent with what we have said. A single Judge of the Bombay High C9uri iri _M.R._ _Pillai_ v: _M/s._ _Moti/a/ Vr{Jbhukandas_ & _Ors.;<_ _[1]_ _>_ took .the view thats. 22A of the Act ·did not debar the police from exercising the pow.ers under s, 165 of the . Code. This is in accord with· the conclusion reached by us. ' . B The appeal is dismissed and the decision of the Full Bench is affirmed. . · S. R . _A.ppea/_ _dismissed._ _r_ (I) ~~AIR~~ ~~1970 Bom. 24.~~