# Lakshminarayan Ram Gopal and Son Ltd v. 408 '

- **Citation:** [1955] 1 S.C.R. 408
- **Court:** Supreme Court of India
- **Decided:** 1955
- **Case number:** Civil Misc. Petitions Nos. 12 and 16 of 1951
- **Bench:** MEHR CHAND MAHAJAN c.r, MuKHERTEA, VIvIAN BosE, Bhagwati, Venkatarama Ayy.Ar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/lakshminarayan-ram-gopal-and-son-ltd-v-408-396
- **Pages:** 8

## Headnote

Constitution of India, articles 19, 31, 370-Code of Cri'niinal
-"!'
Procedure (Act V of 1898) ss. 51, 96, 98, 165, 523-Whether seizure
"
·of property not sanctioned by ss. 51, 96, 98 and 165 of the Code
.infringes fundamental rights under Arts. 19 and 31 of the Constitu~
:tion-Effect of dismissal of application under s. 523 of the Code in
such a case-Effect of Art. 370.
The provisions
regarding search
and
seizure by the Indian
police are contained in sections 51, 96, 98 and 165 of the Code of
Criminal
Procedure,
1898.
None of
these
sections had
any
-application to the facts and circu1nstances of the case.
Any seizure by the Indian police
of any property of a citizen
not sanctioned under the law stated above or under any other law
infringes the fundamental
rights of the
citizen guaranteed under
Art. 19 and Art. 31 of the Constitution of India. This position is
not affected even if the citizen \vhose
goods are so seized files an
application under s. 523 of the Code and his application is dismiss~
ed by the Magistrate.
In view of the provisions of Art. 370 it is doubtful if an offence
committed in Jammu and Kashmir could
be
investigated by the
police in India.
CML
APPELLATE
JURISDICTION:
Civil
Appeals
Nos. 129 and 130 of 1952.
-
-
-
'
S.C.R.
SUPREME COURT REPORTS
409
Appeals by
Special Leave from the Jupgment and
Order dated the 26th December, 1951, of the Court of
the Judicial Commissioner for the State of Himachal
Pradesh at Simla in Civil Misc. Petitions Nos. 12 and
16 of 1951.
Achhru Ram, (P. S. Safeer and Harbans Singh,
with him) for the appellants.
C.
K.
Daphtary,
Solicitor-General
for
India
(R. Ganapathy Iyer, with him) for respondent No. 1.
1954. April 22. The Judgment of the Court was
delivered by
MEHR CHAND MAHAJAN C.J.-These are two connected appeals by special leave against an order of the
Judicial Commissioner, Himachal Pradesh, dated the
26th December, 1951, rejecting two applications for
the issue of writs of mandamus and certiorari under
article 226 of- the Constitution.
The facts giving rise to the two petitions, out of
which these two connected appeals arise, are these :
One Trilok Nath was running a business in Himachal
Pradesh under the name and style of "Himachal Drug
T
Nurseries" for
the extraction,
collection and
export
• of medicinal herbs in the year 1949. He was a partner
of Messrs. Prabhu Dayal and Gowri Shankar of Jammu
and Kashmir State in timber business carried on in
that State under the name and style of "The Kashmir
Woods". It was alleged by him that the business in
Chamba was his exclusive business with which the
partnership firm "The
Kashmir
Woods"
had no
concern whatsover. Prabhu Dayal's case was that the
,_ firm "The Kashmir Woods" was started by him in
1943 as his sole proprietary concern, that later on
he took Trilok Nath Mahajan as a partner in this
concern, that in the year 1949 Sardar Bhagwan Singh
induced the partners of this firm to take up the line
of crude drugs and herbs which was his line, that a
new firm "Himachal Drug Nurseries" was started as a
child concern of "The Kashmir Woods" with Bhagwan
Singh as one of the partners, that after preliminary
~ investigation it was c!ecided
to take up this work at
Chamba and in pursuance of this decision two leases
195+
Wazir Chand
v.
The State of
Himachal
Pradesh.
1954
Waz;:ir Chand
v.
The State of
Himachaf
Pradesh.
Mehr Chand
Mahajan C. ].
410
SUPREME COURT REPORTS
[1955}
of two forest
divisions
were taken on behalf of the
Jammu firm," one in the name of Bhagwan Singh and
another in the name of Trilok Nath but the finance·
for this undertaking was supplied by the parent firm
at Jammu. It was
alleged that
subsequently Trilok
Nath manipulated the Jammu books showing a bogus
investment of his elder brother Wazir Chand amount-·
ing to Rs. 30,000 m the firm "Kashmir Woods" and
that fraudulently and by
manipulating the books and
by entering into certain agreements Trilok Nath made
Wazir Chand the
sole owner of
"Himachal Drug
Nurseries"
and transf

## Text

1954
Lakshminarayan
Ram Gopal and
Son Ltd.
v.
408 '
SUPREME COURT REPORTS
[1955]
·rhe Government of
Hyderabad.
concerns besides the Company. All these factors taken
mto consideration along with the fixity of tenure, the
nature of remuneration and the assignability of their
rights, are sufficient to enable us to come to the conclusion that
the
act1V1t1es
of the
appellants as
the
agents of the Company constituted
a business and the
remuneration which the appellants received from the
Company under the terms of the Agency Agreement
was mcome, profits or gain from business.
Bhagwati].
1954
.April 22.
The appellants were therefore rightly assessed for
excess profits tax
and these appeals must stand dismissed with costs.
Appeal dismissed.
WAZIRCHAND
v.
THE STATE OF HIMACHAL PRADESH.
(With connected Appeal)
[MEHR CHAND MAHAJAN c.r., MuKHERTEA, VIvIAN
BosE, BHAGWATI and VENKATARAMA AYY.AR JJ.]
Constitution of India, articles 19, 31, 370-Code of Cri'niinal
-"!'
Procedure (Act V of 1898) ss. 51, 96, 98, 165, 523-Whether seizure
"
·of property not sanctioned by ss. 51, 96, 98 and 165 of the Code
.infringes fundamental rights under Arts. 19 and 31 of the Constitu~
:tion-Effect of dismissal of application under s. 523 of the Code in
such a case-Effect of Art. 370.
The provisions
regarding search
and
seizure by the Indian
police are contained in sections 51, 96, 98 and 165 of the Code of
Criminal
Procedure,
1898.
None of
these
sections had
any
-application to the facts and circu1nstances of the case.
Any seizure by the Indian police
of any property of a citizen
not sanctioned under the law stated above or under any other law
infringes the fundamental
rights of the
citizen guaranteed under
Art. 19 and Art. 31 of the Constitution of India. This position is
not affected even if the citizen \vhose
goods are so seized files an
application under s. 523 of the Code and his application is dismiss~
ed by the Magistrate.
In view of the provisions of Art. 370 it is doubtful if an offence
committed in Jammu and Kashmir could
be
investigated by the
police in India.
CML
APPELLATE
JURISDICTION:
Civil
Appeals
Nos. 129 and 130 of 1952.
-
-
-
'
S.C.R.
SUPREME COURT REPORTS
409
Appeals by
Special Leave from the Jupgment and
Order dated the 26th December, 1951, of the Court of
the Judicial Commissioner for the State of Himachal
Pradesh at Simla in Civil Misc. Petitions Nos. 12 and
16 of 1951.
Achhru Ram, (P. S. Safeer and Harbans Singh,
with him) for the appellants.
C.
K.
Daphtary,
Solicitor-General
for
India
(R. Ganapathy Iyer, with him) for respondent No. 1.
1954. April 22. The Judgment of the Court was
delivered by
MEHR CHAND MAHAJAN C.J.-These are two connected appeals by special leave against an order of the
Judicial Commissioner, Himachal Pradesh, dated the
26th December, 1951, rejecting two applications for
the issue of writs of mandamus and certiorari under
article 226 of- the Constitution.
The facts giving rise to the two petitions, out of
which these two connected appeals arise, are these :
One Trilok Nath was running a business in Himachal
Pradesh under the name and style of "Himachal Drug
T
Nurseries" for
the extraction,
collection and
export
• of medicinal herbs in the year 1949. He was a partner
of Messrs. Prabhu Dayal and Gowri Shankar of Jammu
and Kashmir State in timber business carried on in
that State under the name and style of "The Kashmir
Woods". It was alleged by him that the business in
Chamba was his exclusive business with which the
partnership firm "The
Kashmir
Woods"
had no
concern whatsover. Prabhu Dayal's case was that the
,_ firm "The Kashmir Woods" was started by him in
1943 as his sole proprietary concern, that later on
he took Trilok Nath Mahajan as a partner in this
concern, that in the year 1949 Sardar Bhagwan Singh
induced the partners of this firm to take up the line
of crude drugs and herbs which was his line, that a
new firm "Himachal Drug Nurseries" was started as a
child concern of "The Kashmir Woods" with Bhagwan
Singh as one of the partners, that after preliminary
~ investigation it was c!ecided
to take up this work at
Chamba and in pursuance of this decision two leases
195+
Wazir Chand
v.
The State of
Himachal
Pradesh.
1954
Waz;:ir Chand
v.
The State of
Himachaf
Pradesh.
Mehr Chand
Mahajan C. ].
410
SUPREME COURT REPORTS
[1955}
of two forest
divisions
were taken on behalf of the
Jammu firm," one in the name of Bhagwan Singh and
another in the name of Trilok Nath but the finance·
for this undertaking was supplied by the parent firm
at Jammu. It was
alleged that
subsequently Trilok
Nath manipulated the Jammu books showing a bogus
investment of his elder brother Wazir Chand amount-·
ing to Rs. 30,000 m the firm "Kashmir Woods" and
that fraudulently and by
manipulating the books and
by entering into certain agreements Trilok Nath made
Wazir Chand the
sole owner of
"Himachal Drug
Nurseries"
and transferred
the
Chamba concern
tohim without the knowledge
of the other partners.
These assertions were not accepted by Wazir Chand or
Trilok Nath. Their case
was, that Trilok Nath was.
the sole owner of
the Chamba concern, that he·
obtained the leases m his own name' and not for the
Jammu firm from the Chamba forest department, first
in the year 1949, and then in the year 1950, that as he
had no capital of his own, he borrowed a sum of
Rs. 30,000 from his brother and made him a partner
with him m this business and that as later on he wasunable to contribute his share of the capital, the part-·
nership was dissolved on 31st August, 1950, and in
consideration of a sum of Rs. 20,000 he, Trilok Nath,
relinquished
and
transferred by means of a stamped:
deed of dissolution made on 10th December, 1950, all
his rights in the Chamba concern to Wazir Chand who
thus became the sole owner of all the goods belonging
to this concern in Chamba and came into possession of
the same.
On the 3rd April, 1951, Prabhu Dayal lodged a·
report with the police at Jammu that Trilok Nath had
prepared duplicate accounts for production before the
income-tax authorities, and that he had committed an
offence of embezzlement
unaer
section
406
of
theIndian Penal Code. The Jammu and Kashmir Statepolic.e
took
cognizance of
the
case and
appointed
Amar Nath, sub-inspector of police, to make investigation.
During the
investigation
the
Jammu policecame to Chamba on 25th and 26th April, 1951, and
with the assistance of the Chamba police seized 269
•
,
-
-
•
S.C.R.
SUPREME COURT REPORTS
411
bags of medicinal herbs worth about Rs. 35,000 and in
actual physical possession of Wazir Chand or his men
without reporting to, or obtaining orders from, any
ma.zistrate
or
any
other
competent authority. The
goods
were
handed
over
to different superdars
at
differmt stations in the State of Himachal Pradesh.
\Vazir
Chand
vehemently
protested
against
these
seizures alleging that the action taken was i\leeal and
without jurisdiction and that the
goods
~hould be
released but his representations had no effect.
In the first week of July, 1951, the Chamba poli.ce
again,
at the instance of the Jammu police,
seized 25
bags of d!mp from and in the posse;,sion . of Wazir
Chand and these were also handed over to the same
superdars.
On the
19th
July,
1951,
the
District
Magistrate of Jammu wrote to the District Magistrate
of Chamba as!<ing
that the goods seized from
the
"Himachal Dru.~ Nurseries"
be
handed over to the
Jammu and Kashmir State police. This request has
so far not been complied with.
On the 21st August, 1951, Wazir Chand made an
application under article 226 of the Constitution of
India
to the Judicial Commissioner of the State of
Himachal Pradesh at Simla praying for the issue of
one or more writs in the nature of mandamus directing
the respondents to order the release of the seized
goods and to refrain from passing any orders about
the extradition 0£ these goods. During the pendency
of this petition another 45 maunds of medicinal herbs
were seized by the Chamba police at the instance of
the
Jammu police.
This seizure was challenged by a
second petition on 20th September, 1951,
under article
226 or the Constitution.
The Judicial Commissioner disposed of both these
petitions by a single judgment. He declined to gra'lt
any of the relids asked for by the appellant. Th:':
ground
of
the <lecision appears from the following
quotation from his judgment :-
"In order to find
whether the entries in those
books of account were genuine or forged, or what the
diect of those
eutries on the alleged right of Wazir
8-87 S. C. Inclia/59
Wa.eir Chand
'The State of
Hirnucliill
Pradesh.
Me'.rC.and
Ma,,ajan C. J.
1954
f Va.cir Cl1and
v.
T'lil Stat< of
Himacf1al
Pradesh.
Me/tr Chand
Ji1ahajan C. J.
•
412
SUPREME COURT REPORTS
[1955J
Chand was, or whether the agreements set up by Wazir
Chand were genuine or for consideration, it would be
necessary
that all these persons, and such witnesses as
they might deem it necessary to produce in support of
their respective allegations, should appear in the witness box.
A number of affidavits have been
filed
on
behalf of either party-those of Wazir Chand and certain alleged employees of the Himachal Drug Nurseries
on behalf of the petitioners, and of Prabhu Dayal,
Gauri Shankar,
Bhagwan Singh and
a head-constable
of the Jammu and Kashmir police on behalf of the
respondents ; but the truth or falsity of the contents of
those
affidavits
cannot be
ascertained
without the
deponents being subjected
to
cross-examination ...... I
would not go so far as to hold that the petitioners have
failed
to prove that they have any
right, title or
interest in the goods seized. It will not be fair to do so
in the present
summary proceedings.
But this
much
must certainly be said that it is not possible for this
Court, on the material placed before it, or which could
possibly
be
placed
in
these
summary
proceedings,
to come to a finding whether the petitioners have the
right to claim the reliefs prayed for by them. The
proper remedy for them therefore is not by way of a
petition under article 226 of the Constitution of India,
but by any other action, e.g., a civil suit, which may
'be open to them."
It was contended before us that the learned Judicial
Commissioner was in error in thinking that in order to
determine the legality of the seizures and to determine
the point whether there had been any infringement of
the petitioner's fundamental rights it was necessary to
determine the true nature of the title in the goods
seized and that the petitioner could not be granted any
relief till he was able to establish this.
It was argued
that the goods having been seized from the actual possession of the petitioner or his servants, the Chamb_a
concern, being admittedly under the exclusive control
of Trilok Nath or Wazir Chand, the determination of
the question whether Wazir Chand had obtained possession fraudulently was not relevant to this inquiry,
and that the only point that needed consideration was
I
-
\
-
,
..
..
-<(-
S.C.R.
SUPREME COURT REPORTS
413
whether the seizures were under authority of law or
otherwise, and if they were not supported under any
provisions of law, a writ of
mandamus should have
issued directing the restoration of the goods so seized.
It seems to us that these contentions are well
founded. The Solicitor-General appearing for the respondents was unable to draw our attention to any
~ .. provision of the Code of Criminal Procedure or any
other law under the authority of which these goods
could have been seized by the Chamba police at the
instance of the J ammu police. Admittedly these seizures
were not made under the orders of any magistrate. The
provisions of the Code of Criminal Procedure authorizing the Chamba police to make a search and seize
the goods are contained in sections 51, 96, 98 and 165.
"" None of these sections however has any application
to
the facts
and
circumstances of this
case.
Section 51
authorizes in certain circumstances the search of arrested persons. In this case no report of the commission
of a cognizable offence had been made to the Chamba
police and no complaint had been lodged before any
magistrate there and no warrant had been issued by a
Chamba magistrate for making the search or for the
~.arrest of any person. That being so, sections 51, 96
and 98 had no application to the case. Section 165
again is not attracted to the circumstances of this case
because it provides that if an officer in charge of a
police station has reasonable grounds for believing that
anything necessary for the purposes of an investigation
into any offence which he is authorized to investigate, may
be found in any place within the limits of the police
;.. station of which he is in charge, or to which he is
attached, and that such thing cannot in his opinion be
otherwise obtained without undue delay, such officer
may, after recording 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, search or cause
search to be made, for such thing in any place within
the limits of such station. The Chamba police was not
authorized to investigate the offence regarding which
-.a report had been made to the Jammu and Kashmir
police. It is doubtful whether in view of the provisions
of article 370 of the Constitution any offence committed in Jammu and Kashmir .could be
investigated by
1954
Wazir Chand
v.
The State of
Himachal
Pradesh.
Mehr Chand
Mahajan C. ].
1'.'54
Wa.:drChand
v.
The State of
Himac ,al
Pradesh.
Mel1r Ci1and
Ma1ajan C. J.
414
SUPREME COURT REPORTS
[1955]
-)-
an officer in charge of a police station in the Hima~hal
Pradesh. The procedure prescribed by the section was
not followed. The Jammu and Kashmir police had no
jurisdiction or
authority
whatsoever
to carry out
investigation of an offence committed in Jammu and
Kashmir in Himachal territory
without the authority
of any law or under the orders of any magistrate passed
under authority of any law. No such authority was -'
cited before us. The whole affair was a hole-and-corner
affair between the oflic:rs of.the Kashmir police and
of the Chamba police without any reference to any
magistrate. It is obvious that the procedure adcpted
by the Kashmir and the Chamba police was in utter
violation of the provisio;15 of law and could not be
defended
under
cover of any
legal authority.
That
being so, the seizure of these goods from the possession •
of the
pet1t1oner or his
servants
amounted to
an
infringement of his fundamental rights both under
article 19 and article 31 of the Constitution and relief
should have been granted to him under article 226 of
the Constit11tion.
All that the Solicitor-General could urge in the case
was that on the allegation of Prabhu Dayal, the goods
seized in Chamba concerned an offence that had been. -,
committed in Jammu and being articles regarding which
an offence had been committed, the police was entitled
to . seize them anJ that W azir Chand had no legal
title in them. Assuming that that was so, goods in the
possession of a person who is not lawfully in possession
of them cannot be seized except under authority of law,
and in absence of such authority, Wazir Chand could
not be deprived of them. On the materials placed on-+
this record it seems clear that unless and until Prabhu
Dayal proved his allegations that the Chamba concern
was
part and parcel of the Jammu partnership
firm
(which fact has been denied) and that Trilok Nath who
was admittedly one of the partners had no right to put
Wazir Chand in possession of the property, no offence
even under section 406 could be said to have been
committed about
this
property.
The
Jammu
police
without having challanned any of the accused before a "'
magistrate in Jammu, and without having obtained
any orders of extradition from a magistrate (if the
offence was extraditable) could not proceed to Chamba
•
-
;
-
-
S.C.R.
SUPREME COURT REPORTS
415
-r
and with the help of the Chamba police seize the goods
and attempt to take them to Jammu by a letter of
request written by the District Magistrate of Jammu
to the District Magistrate of Chamba.
Lastly it was argued that the petitioner made an
application under section 523, Criminal Procedure Code,
to the magistrate
and that application
was
dismissed
_... and that a petition for revision against that order was
still pending, and that when another remedy had been
taken, article 226 could not be availed of. This contention cannot be sustained, firstly in view of the fact
that section 523 has no application to the facts
and
circumstances of this case, and the magistrate had no
jurisdiction to return these goods to the petitioner.
Secondly, the revision application has been dismissed
.J( on the ground that there was no jurisdiction in this
case to grant relief to the petitioner under section 523.
For the reasons given above we allow this appeal,
set aside the order of the Judicial Commissioner and
direct an appropriate writ to issue directing the restoration to the petitioner · of the goods seized by the police.
The appellant will have his costs of the appeals and
r
those
incurred
by
him m
the Court of
Judicial
• Commissioner.
Appeal allowed.
VIRENDRA SINGH AND OTHERS
1/.
THE ST ATE OF UTT AR PRADESH.
[MEHR
CHAND
MAHAJAN C.J.,
MuKHF.RJEA, VIVIAN
BosE, BHAGWATI and VENKATARAMA AYYAR JJ.]
Constitution of India, arts. 5, 19(f), 31(1), proviso to art. 131
and
art.
363-Efject
of
the
Constitution-Erst-while
Indian
States-Forming part of India-Any State
Government-Whether
can do anything in the nature of act of State-Sovereign-Whether
can plead act of State against the citizen-Jagirs and Muafis
by
Rulers of Indian States having full autonomy and sovereignty prior
.,..to the Constitution-Whether can be avoided afte1· the Constitution
when not challenged up to the date of the Constitution-Courtsfurisdiction of-To question the accessions and such grants.
--0
1c54
W azir C!zaiid
v.
Ti.e State of
Himac.\al
Pradesh.
Mehr chand
ilJahajan C. ].
1954
April 29.