# SETH DURGAPRASAD ETC v. H. R. GOMES

- **Citation:** [1966] 2 S.C.R. 991
- **Court:** Supreme Court of India
- **Decided:** 1965-12-09
- **Case number:** Civil Appeals Nos. 677 to 680 of 1965
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/seth-durgaprasad-etc-v-h-r-gomes-3672
- **Pages:** 16

## Headnote

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)
I

A
SETH DURGAPRASAD ETC.
v.
H. R. GOMES
December 9, 1965
991
B
(P.
B.
GAJENDRAGADKAR,
C.J.,
K.
N.
WANCHOO,
D
E
F
G
H
M.
HrDAYATULLAH,
V.
R.AMASWAMl
AND
P.
SATYANARAYANA
RAJU, JJ.J
Defence of !~die' Rules.
1 %3-Rule
126(2)-Whether
permits
seiziire of documents.
Indian Custo111s Act, 1962 s. 2(34)--'Proper officer' within the nieaning
of section whether includes Collector of Customs-Section 105, power to
search under. whether a power to search
particular documents only-
'secreted', meaning of-Section l10(3), seizure of docunients
underDocuments lVhether can be seized froni a person in legal and not physical
possession.
Searches were carried out in the appellants' premises by the Superintendent of Customs and Central Excise Nagpur.
The authority to search
was given by the Assistant Collector of Customs and Central Excise Nagpur under Rule 126 L(2) of the Defence of India Rules, 1963 for the
purpose of seizing gold held in contravention of the Rules and also connected documents.
The documents.
seized during the search were
retained by the Superfntendent at Nagpur for 8 days and were then sent
to Delhi temporarily for the purpose of translation by the Departmental
Hindi Officer.
While the documents were at
Delhi
the Collector of
Customs Nagpur on September 6, 1963 made an order of seizure under
s. 110(3) of the Customs Act purporting to seize the aforesaid documents
from the possession of the Superintendent.
On September 11; 1963, the
Collector made another similar order purporting to seize the said documents from the Assistant CollectO'r to v,;hom, he believed, they had been
transferred by the Superintendent. The appellants challenged inter alia
the legality of the seizure of the documents
by the Superintendent and
the orders of seizure made by the Collector, before the High Court. Their
writ petitions having been dismissed they appealed to this
Court by
special leave.
The questions that came up for consideration were : ( l) Whether the
officer authorised under Rule 126L(2) could seize documents by exercising his additional powers under Rule 156.
(2) Whether the Collector
of Customs was a 'proper officer' for the purpose of ordering seizure of
documents under s. 110(3) of the Customs Act. (3) Whether the order
under s. 110(3) was legally effective in view of the fact that the documents in question were not in the physical possession of the Superintendent or the Assistant Collector of Central Excise. ( 4) Whether the
power under s. 105 of the Customs Act was a general power or a po\\-·er
to seize only specified documents. (5) Whether the documents in question could be snid to have been 'secreted' within the meaning of s. 105.
HELD : (i) The poVl'er granted under Rule 156 is an
ancillary or
inciden.tal power for rnaking effective seizure of suspected gold. Jn other
\vords the power granted under Rule 156 is the po\ver to take sueh action
as may be necessaty for seizing p:·ohibited gold, and does not include the
power of seizure of documents \\/~1ich is
not an ancillary or incidental
,ower. This view is borne out bv the Seventh
Amensment of the Defence of India Rules on Jtme 2-\, 1963. By this araend!l'lent power. te
992
SUPREME
COURT
REPORTS
[1966] 2 S.C.R.
seize documents has been expressly conferred under Rule 126L(l)
and
(3) without conferring similar power under Rule 126L(2). The Super·
intendent of Central Excise, could not therefore seize the documents by
authority given under the said Rule. [997 G]
(ii) However the appellants were not entitled to the grant of a writ
because there was a valid order for seizure of the documents on SeptemM
ber JI, 1963 by the Collector of Customs under s. 110(3) of the Cus·
toms Act.
Under the said Sub-section documents
relevant to the pro·
ceedings under the Act can be seized by the 'proper officer'. (999 C]
(iii) A Collector of Central Excise is 9 'proper officer' within
the
meaning of s. 2(34) of the Customs Act. [1000 E]
(iv) The fact that on September 6 and 11.,
1963,
when
the two
ord

## Text

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A
SETH DURGAPRASAD ETC.
v.
H. R. GOMES
December 9, 1965
991
B
(P.
B.
GAJENDRAGADKAR,
C.J.,
K.
N.
WANCHOO,
D
E
F
G
H
M.
HrDAYATULLAH,
V.
R.AMASWAMl
AND
P.
SATYANARAYANA
RAJU, JJ.J
Defence of !~die' Rules.
1 %3-Rule
126(2)-Whether
permits
seiziire of documents.
Indian Custo111s Act, 1962 s. 2(34)--'Proper officer' within the nieaning
of section whether includes Collector of Customs-Section 105, power to
search under. whether a power to search
particular documents only-
'secreted', meaning of-Section l10(3), seizure of docunients
underDocuments lVhether can be seized froni a person in legal and not physical
possession.
Searches were carried out in the appellants' premises by the Superintendent of Customs and Central Excise Nagpur.
The authority to search
was given by the Assistant Collector of Customs and Central Excise Nagpur under Rule 126 L(2) of the Defence of India Rules, 1963 for the
purpose of seizing gold held in contravention of the Rules and also connected documents.
The documents.
seized during the search were
retained by the Superfntendent at Nagpur for 8 days and were then sent
to Delhi temporarily for the purpose of translation by the Departmental
Hindi Officer.
While the documents were at
Delhi
the Collector of
Customs Nagpur on September 6, 1963 made an order of seizure under
s. 110(3) of the Customs Act purporting to seize the aforesaid documents
from the possession of the Superintendent.
On September 11; 1963, the
Collector made another similar order purporting to seize the said documents from the Assistant CollectO'r to v,;hom, he believed, they had been
transferred by the Superintendent. The appellants challenged inter alia
the legality of the seizure of the documents
by the Superintendent and
the orders of seizure made by the Collector, before the High Court. Their
writ petitions having been dismissed they appealed to this
Court by
special leave.
The questions that came up for consideration were : ( l) Whether the
officer authorised under Rule 126L(2) could seize documents by exercising his additional powers under Rule 156.
(2) Whether the Collector
of Customs was a 'proper officer' for the purpose of ordering seizure of
documents under s. 110(3) of the Customs Act. (3) Whether the order
under s. 110(3) was legally effective in view of the fact that the documents in question were not in the physical possession of the Superintendent or the Assistant Collector of Central Excise. ( 4) Whether the
power under s. 105 of the Customs Act was a general power or a po\\-·er
to seize only specified documents. (5) Whether the documents in question could be snid to have been 'secreted' within the meaning of s. 105.
HELD : (i) The poVl'er granted under Rule 156 is an
ancillary or
inciden.tal power for rnaking effective seizure of suspected gold. Jn other
\vords the power granted under Rule 156 is the po\ver to take sueh action
as may be necessaty for seizing p:·ohibited gold, and does not include the
power of seizure of documents \\/~1ich is
not an ancillary or incidental
,ower. This view is borne out bv the Seventh
Amensment of the Defence of India Rules on Jtme 2-\, 1963. By this araend!l'lent power. te
992
SUPREME
COURT
REPORTS
[1966] 2 S.C.R.
seize documents has been expressly conferred under Rule 126L(l)
and
(3) without conferring similar power under Rule 126L(2). The Super·
intendent of Central Excise, could not therefore seize the documents by
authority given under the said Rule. [997 G]
(ii) However the appellants were not entitled to the grant of a writ
because there was a valid order for seizure of the documents on SeptemM
ber JI, 1963 by the Collector of Customs under s. 110(3) of the Cus·
toms Act.
Under the said Sub-section documents
relevant to the pro·
ceedings under the Act can be seized by the 'proper officer'. (999 C]
(iii) A Collector of Central Excise is 9 'proper officer' within
the
meaning of s. 2(34) of the Customs Act. [1000 E]
(iv) The fact that on September 6 and 11.,
1963,
when
the two
orders under s. 110(3) were passed the goods were in Delhi and not in
A
B
the physical possession of the officers from whose possession they were
purported to be seized did not affect the validity of the orders. Though
C
the documents had been sent to Delhi, the Superintendent of Excise was
still in legal possession of them for he had the right to rontrol the use of
the documents and to exclude persons who should or should not have
acce" to the documents. The legal position is that at Delhi the documents \Vere in possession of a bailee for the limited purpose of examination and translation of the documents but the legal
possession was still
with the Superintendent. [1000 H-1001 BJ
Ancona v. Rogers, (1876) I Ex.D.285 and United States of America
v. Doll/us Mieg it Co111paw1ie S.A. and Bank of England [1952] 1 AH
E.R. 572, relied on.
'
From the above it would follow that the
Collector by his order of
seizure dated September 6, 1963 or September 11, 1963 could transfer
the legal possession of the documents to himself. The legal effect of the
order. of seiwre made by the Collector was the transfer of the legal
possession of the documents from the
Superintendent or the Assistant
Collector, to the Collector.
Such a change of possession need not necessarily involve physical transfer of possession if it was not possible at that
stage, but as a matter of law on and from the date of seizure the Collec.
tor exercised the full incidents of possession over the
documents. The
fact that the documents were retained at Delhi for a specific purpose will
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not affect the legality of the order of seizure. [1001 F-H]
F
Gian Chand v. State of Punjab, [1962] Supp. 1 S.C.R. 364 and Vinter
v. Hind, (1882) 10 Q.B. 62, distinguished.
(v) It cannot be said that the documents
have not been
'secreted'
within the meaning of s. 105 of the Customs Act unless they are hidden
or concealed.
In the context of the section the word means 'documents
which are not kept in the no'rmal or usual place'
or it may even mean
'documents or
1thing~ which are' likely to be secreted'; in other words
documents or things which a person is likely to keep out of the way or
to put in a place where the officer oi. the law cannot find it. [1005 F-G]
The power to search granted under
s. 105 of the Customs Act is a
power of general search and it is not necessary for its exercise that the
authorisation should specify
the documents
for which search is to be
made.
But it is essential that before this power is exercised the prelimi~
nary conditions required by the section must be strictly satisfied that is,
the officer concerned must have reason
to believe that any
documents
or things which in his opinion are relevant for any proceeding under the
Act are secreted in the place searched. [1006 C-FJ
G
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DURGA PRASAD v. H. R. GOMES (Ramaswami, J.)
99:;
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CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 677 to
680 of 1965.
Appeals from the judgment and orders dated February 24,
25, 1964 of the Bombay High Court (Nagpur Bench) in Special
Civil Applications Nos. 437, 448, 449 and 490 of 1963.
B
G. S. Pathak, G. L. Sanghi, K. Srinivasamurthy, 0. C. Mathur,
c
Ravinder Narain and J. B. Dadachanji, for the appellants.
S. V. Gupte, Solicitor-General, N. S. Bindra and B. R. G. K.
Achar, for the respondents.
The Judgment of the Court was delivered by
Ramaswami, J. These appeals are brought by a certificate from·
the judgment of the High Court of Judicature at Bombay (Nagpur
Bench) dated February 25, 1964 in Special Civil Applications
nos. 437, 448, 459 and 490 of 1963 wherein the respective appellants challenged the search and seizures carried out by the resD
pendents at the residential-cum-business premises of the appellants in exercise of the power derived from Rule 126 L ( 2) of
the Dtfence of India (Amendment) Rules 1963 (hereinafter called
the 'Gold Control Rules') and ss. 1 OS and 110 of the Customs
Act 1962 (hereinafter called the 'Customs Act').
E
Civil Appeal No. 678 of 1965 :
This appeal arises out of Special Civil Application no. 490 of
1963 which relates to the search and seizure of the premises of
Sri Durga Prasad on August 19, 1963 and August 20, 1963. The
authorisation was granted by the 1st respondent-Assistant Collector of Customs and Central Excise, Nagpur-to the second
F Respondent-Superintendent of Customs and Central Excise-on
August 19, 1963 to search the appellant's premises "Shreeram
Bhawan" and to seize and take possession of all gold, gold ornaments etc. which were believed to have been kept in contravention
of Gold Control Rules and also account books and documents.
The authorisation was granted under Rule 126 L (2) of the DefG ence of India (Amendment) Rules 1963 and reads as follows :
H
"To
Shri S. H. Joshi,
Superintendent of Customs
and Central Excise, Nagpur.
Whereas information has been laid before me and
on due inquiry thereupon I have been led to believe
that the premises/vaults/lockers specified below
and:
994
SUPREME COURT
REPO\l TS
[1966] 2 S.C.R.
said to be in possession and control of Shri R. B. Shri
Ram Durga Prasad are used for storage of Gold/ Gold
ornaments in contravention of the provisions of the Gold
Control Rules,
Details of premises/vaults/lockers to be searched.
Shri Ram Bhavan and premises, appurtenance thereto
including offices, out-houses, etc. Ramdaspeth, Nagpur.
This is to authorise and require you to enter the said
premises with such assistance as shall be required, and
to use, if necessary, reasonable force for that purpose,
and to search every part of the said premises and to
seize and take possession of all gold/ gold ornaments
along with the receptacle, container or covering thereof
which you may reasonably believe to be kept in contravention of the Gold Control Rules and also of such
books of accounts, return or any other documents, as
you may reasonably believe to be connected with any
contravention of Gold Control Rules,
and forthwith
report to this office regarding the seizure made, returning
this order, with an endorsement certifying what you had
done under it immediately upon its execution.
Given under my hand and seal of this office this
Nineteenth day of August 1963.
Seal of Office.
Sd. Krishan Dev,
19-8-63,
Assistant Collector of
Customs and Central Excise,
A
B
c
D
E
Nagpur."
F
Having taken possession of the documents, respondent no. 2
retained those documents at Nagpur for about 8 days. Thereafter
the documents were sent to Delhi temporarily for proper translation by the Departmental Hindi Officer.
While the documents
were at Delhi, the 3rd respondent viz., the Collector of Customs
Nagpur, made an order of seiaire under s. 110 (3) of the Customs
G
Act.
The order of seizure dated September 6, 1963 states :
"Whereas information has been received that the
undermentioned documents are in the custody of Shri S.
H. Joshi, Superintendent of Central Excise, Nagpur :
1. Nagpur ki Juni Rokad Bahi Hisab Bahi Shri Nagpur
ki 24-7-58 to 28-10-59 (in Hindi) pages 1 te 96;
2. Shri Rokad Bahi Nagpur (in ffinw) pages 1 lo 27;
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DURGA PRASAD v. H, R. GOMES (Ramaswami, !.)
995
~ A
3. Rokad-Bhuramalji Agrawal (in Hindi) pages 1to78;
'
4. Shri Khata Bahi Bhai Bhuramalji Agrawal Samvat
2000-2001, 2005-2006 (in Hindi) pages 1 to 53;
5. Partners Shrix Du Group Hisab Bahi-upto 3-5-59
(in Hindi) pages 1 to 45;
B
6. Shri Khata Bahi-Bhai Bhuramalji Agrawal-Samvat
2006-7 to 2012 (in Hindi) pages 1 to 57;
7. Hisab (bahi)-Partners-G X F Group upto 3-5-59
(in Hindi) pages 1 to 20;
8. Om.-P. Ankada Bahi (in Hindi) pages 1 to 25;
c
9. Ankada (Bahi) Bombay Nagpur (in Hindi) pages
1 to 10;
10. Shri Jaipur Ki Hisab Bahi (in Hindi) pages 1to101;
(loose papers) and 1 to 39 (regular pages);
11. C.N.A. 1956-58 (A/c Book in English) pages 1 to
D
101;
I
12. Account Book similar to no. 11 above (in English)
r
back cardboard cover missing pages 1 to 129;
13. June Shan Jakhiramji Bhagwandasji pages 1 to 2
I
loose pages. Pages 1 to 71 regular pages; 3-11-56 to
~
E
2-5-59;-Total thirteen exercise book type account
books;
14. Eight bunches of loose sheets stitched together containing sheets as detailed below :
Bunch no. 1 containing sheets 5 : Bunch no. 2 conF
taining sheets 6 : Bunch no. 3 containing sheets 4:
Bunch no. 4 containing sheets 5 : Bunch no. 5 con-
'
taining sheets 4: Bunch no. 6 containing sheets
2; Bunch no. 7 containing sheets 2 : Bunch no. 8
containing sheets 3;
15. Loose papers 25 sheets (including small chits) recoG
vered from Shriram Bhawan, Nagpur and whereas I
J
am of the opinion that the said documents are useful
'
for and relevant to the proceedings under Customs
l
Act 1962 (Act 52 of 1962) I, Shri Tilak Raj, the
Collector of Central Excise, having been empowered
as Collector of Customs under Notification no. GSR
H
214 dated 1-2-1963 of the Government of India in
this behalf in exercise of the said powers hereby
order that the aforesaid documents shall be seized."
996
SUPREME COURT
REPORTS
[1966] 2 S.C.R.
Respondent no. 3 made a second order of seizure dated September 11, 1963 with regard to the same documents.
Respondent
no. 3 has explained that he had to make the second order of
seizure dated September 11, 1963 because he was, at first, under
the impression that the documents were under the custody of respondent no. 2, but later on he learnt that respondent no. 2 had
already made over the documents to the custody or Sri Krishan
B
Dev, Assistant Collector of Central Excise, Nagpur.
It is contended by Mr. Pathak on behalf of the appellants that
the order of search and seizure dated August 19, 1963
was
illegal because the Excise authorities had no power to seize documents under Rule 126 L (2) of the Defence of India (Amendment) Rules 1963 which states :
"126L. Power of entry, search, seizure, to obtain
information and to take samples.-
(1) ................................... .
( 2) Any person authorised by the Central Government by writing in this behalf mayc
D
( a) enter and search any premises, not being a
refinery or establishment referred to in subrule ( 1), vaults, lockers or any other place
whether above or below ground;.
E
~
(b) seize any gold in respect of which he suspects that any provision of this Part has
been, or is being, or is about to be contravened, along with the package, covering or
receptacle, if any, in which such gold is
found and thereafter take all measures
necessary for their safe custody.
It is contended for the appellants that the Rule only gives authority to seize any gold in respect of which there is suspicion of
contravention of the Gold Control Rules along with the package,
covering or receptacle, but there is no provision in the Rule for
search or seizure of any documents.
On behalf of the respondents the Solicitor-General relied upon the provisions of Rule 15 6
which is to the following effect :
"156. Powers to give effect to rules, orders, etc.-
( 1) Any authority, officer or person who
is empowered by or in pursuance of the Defence of
F
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E
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DURGA PRASAD V. H. R. GOMES (Ramaswami, J.)
997
India Ordinance, 1962, or any of these Rules
to make any order, or to exercise
any other
power may, in addition to any other action prescribed by or under these Rules, take, or cause
to be taken, such steps and use, or cause to be
used,. such force as may, in the opinion of such
authority, officer or person, be reasonably necessary for securing compliance with, or for preventing or rectifying any contravention
of,
such
order, or for the effective exercise of such
power.
( 2) Where in respect of any of the provisions of these
Rules there is no authority, officer or person empowered to take action under sub-rule ( 1), the
Central or the State Government may take, or
cause to be taken, such steps and use, or cause
to be used, such force as may, in the opinion of
that Government be reasonably necessary for
securing compliance with, or preventing or rectifying any breach of, such provision.
( 3) For the avoidance of doubt, it is hereby declared that the power to take steps under sub-rule
( 1) or under sub-rule (2) includes the power to
enter upon any land or other property whatsoever."
It was submitted that the Superintendent of Customs and Central
Excise was an officer empowered by the Central Government to
exercise the power under Rule 126 L (2) and under Rule 156
the Superi,ntendent had the additional power to take or cause to
be taken such steps as may be reasonably necessary for the effective exercise of such power.
The argument was stressed that
under Rule 156 the Superintendent had the power to seize documents for the purpose of investigating whether the gold which was
G seized was gold in respect of which any provision of Part XIIA
had been contravened.
We do not think there is any justification
for this argument.
The power granted to the authority empowered under Rule 156 is an ancillary or incidental power for making effective seizure of suspected gold.
In other words, the power
H
granted under Rule 15 6 is the power to take such action as may
be necessary for seizing the gold and does not include the power
of seizure of documents which is not an ancillary but an independent power.
The view that we have taken is borne out by the
998
SUPREME
COURT
REPORTS
(1966] 2 S.C.R.
Seventh Amendment of the Defence of India Rules made on June
A
24, 1963.
Before the amendment, Rule 126 L read as follows:
"l 26L. Power of entry, search, seizure, to obtain
information and to take samples.-
( l) Any person authorised by the Board by writing
in this behalf mayB
(a) enter and search any refinery of which the
refiner, or the establishment of a dealer who, is
licensed under this Part;
(b) seize any gold in respect of which he suspects
that any provision of this Part has been, or is being,
or is about to be, contravened, along with the package,
covering or receptacle, if any, in which such gold is
found
and thereafter take all measures necessary for
their safe custody.
(2) Any person authorised by the Central Government by writing in this behalf may-
( a) enter and search any premises, not being a refinery or establishment referred to in sub-rule ( 1),
vaults, lockers or any other place whether above
or below ground;
(b) seize any gold in respect of which he suspects
that any provision of this Part has been, or is
being, or is about to be contravened, along with
the package, covering or receptacle, if any, in
which such gold is found and thereafter take all
measures necessary for their safe custody.
"
After the Seventh Amendment the following clause was inserted
after cL (b) in sub-r. (1) :
" ( c) seize any books of account, return or any other
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document relating to any gold in respect of which he
G
suspects that any provision of this Part has been, or is
being, or is about to be, contravened and thereafter
take all measures necessary for their safe custody."
By the same amendment the following sub-rule was inserted after
sub-rule (2) :
H
"(3) Any officer authorised by the Board by writing in this behalf may search any person if that officer
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DURGA PRASAD v. H. R. GOMES (Ramaswami, !.)
999
has reason to believe that such person has
secreted
about his person-
( a) any gold in respect of which such officer suspects
that any provision of this Part has been, or is
being, or is about to be, contravened,
(b) any document relating to such gold."
It is important to notice that Rule 126 L (2) has not been
amended by the Seventh Amendment and there is no provision in
this sub-rule for such a seizure of any document.
We are, therefore, of the opinion that respondent no. 1 had no authority under
Rule 126 L ( 2) of the Defence of India Rules to order respondent no. 2 to seize and take possession of the documents in the
premises of the appellant.
The appellants will not however be entitled to the relief of
grant of a writ, because we are of the opinion that there is a valid
order of seizure of the same documents on September 11, 1963
D by the Collector of Customs under s. 110 ( 3) of the Customs Act.
E
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Section 110 of the Customs Act states :
"110.(1) If the proper officer has reason to believe
that any goods are liable to confiscation under this Act,
he may seize such goods :
Provided that where it is not practicable to seize any
such goods, the proper officer may serve on the owner
of the goods an order that he shall not remove, part
with, or otherwise deal with the goods except with the
previous permission of such officer.
(2) Where any goods are seized under sub-section
( 1) and no notice in respect thereof is given under clause
(a) of section 124 within six months of the seizure of
the goods, the goods shall be returned to the person
from whose possession they were seized :
Provided that the aforesaid period of six months may,
on sufficient cause being shown, be extended by the
Collector of Customs for a period not exceeding six
months.
( 3) The proper officer may seize any documents or
things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act.
( 4) The person from whose custody any d~cuments
,, are seized under sub-section (3) shall be entitled to
1000
SUPREME
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REPORTS
[1966] 2 S.C.R.
make copies thereof or take extracts therefrom in the
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presence of an officer of customs."
,
On this aspect of the case it was, firstly, submitted by the
.·appellant that the Collector of Customs was not a "proper officer"
~
within the meaning of the Act and so he had no authority to seize
documents from the possession of the Superintendent or the AssisB
tant Collector, Central Excise.
Reference was made to s. 2(34)
of the Customs Act which states :
"2. ( 34) 'proper officer', in relation to any functions to be performed under this Act, means the officer
of customs who is assigned those functions by the Board
or the Collector of Customs;"
On behalf of the respondents the Solicitor-General relied upon
" s. 5 (2) of the Customs Act which states that "an officer of customs may exercise the powers and discharge the duties conferred
or imposed under this Act on any other officer of customs who
is subordinate to him".
Mr. Pathak, however, submitted that
s. 5 (2) has no application to this case because there is a difference
between the "functions" on the one hand and "powers and duties"
referred to in s. 5 (2) of the Customs Act on the other.
We do
not think it is necessary to go into this point because we are of
the view that, in any event, the Collector of Customs would be
a "proper officer" in relation to the functions to be performed by
the Act, because as a matter of principle the Collector of Customs
who had assigned the powers of a "proper officer" to the subordinate officer must himself be deemed to have the powers of a
"proper officer" under s. 110 ( 3) of the Customs Act. We accordingly reject the contention of Mr. Pathak on this point.
It was next submitted on behalf of the appellant that on both
the dates-September 6, 1963 and September 11, 1963-the
documents were not in physical possession of respondent no. 2
and there could not be a valid seizure of documents as contemplated bys. 110(3) of the Customs Act.
It is the admitted
position that when seizure orders were passed by the Collector of
Customs on September 6, 1963 and September 11, 1963 the documents were not in Nagpur or within the territorial jurisdiction of
respondent no. 3.
But we do not accept the argument of the
appellant that the power of seizure must necessarily involve, in
every case, the act of physical possession of the person who had
a right to seize the articles.
It is tru~ that the documents had
been sent to Delhi by respondent no. 2 for a limited purpose and
for a limited period.
But though the documents were sent to
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DURGA PRASAD v. H. R. GOMES (Ramaswami, J.)
1001
A Delhi, respondent no. 2 was still in legal possession of the documents, for he had the right to control the use of the documents
and to exclude persons who should or should not have access to
the documents.
The legal position is that at Delhi the documents
were in possession of a bailee for the limited purpose of examination
and translation of the documents but the legal possession was still
1J
with respondent no. 2.
The law on this point has been correctly
stated by Mellish, L.J. in Ancona v. Rogers(') as follows :
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" ........ there is no doubt that a bailor, who has
delivered goods to a bailee to keep them on account of
the bailor, may still treat the goods as being in his own
possession, and can maintain trespass against a wrongdoer who interferes with them. It was argued, however, that this was a mere legal or constructive possession of the goods, and that in the Bills of Sale Act, the
word 'possession' was used in a popular sense,
and
meant actual or manual possession.
We do not agree
with this argument. It seems to us that goods which
have been delivered to a bailee to keep for the bailor,
snch as a gentleman's plate delivered to his banker, or
his furniture warehoused at the Pantechnicon, would, in
a popular sense, as well as in a legal sense, be said to be
still'in his possession."
E
This passage was approved by Lord Porter in United States of
America v.
Dollfus Mieg et Compagnie
S.A. and Bank of
England( 2 ) and it was held in that case that where a bailor can
at any moment demand the return of the object bailed, he still
has legal possession.
F
It follows, therefore in this case, that the Collector, by his
order of seizure dated September 6, 1963 or September 11, 1963,
could transfer the legal possession of the documents to himself.
The legal effect of the order of seizure made by the Collector was
the transfer of th'e legal possession of the documents from respondent no. 2 or respondent no. 1 to the Collector.
Such a change
G of possession need not necessarily involve a physical transfer of
possession if it was not possible at that stage, but as a matter of
law on and from the date of seizure the Collector exercised the
full incidents of possession over the documents.
The fact that the
documents were retained at Delhi for a specific purpose will not
affect the legality of the order of seizure and there was, in law,
H transfer of possession in respect of these documents from respondents nos. 1 and 2 to respondent no. 3.
(1) (1876], 1 Ex. D. 285, at p. 292.
(2) [1952] 1 All. E.R. 572.
1002
SUPREME
COURT
REPORTS
(1966] 2 S C.R.
On behalf of the appellants Mr. Pathak referred to the decision
A
of this Court i~ Gian Chand v. The State of Punjab('). Jn that
case, the quest10n debated was whether the presumption under
s. 178;'- of the Sea Customs Act, 1878 would arise in respect of
an article which was originally seized by the police and handed
o~er to the authorities of the Customs Department and was actually
with one of them when it was seized.
In this context this Court B
observed at page 3 73 of the Report :
'
"A 'seizure' under the authority of law does involve
a deprivation of possession and not merely of custody
and so when the police officer seized the goods, the
accused lost possession which vested in the police. When
that possession is transferred, by virtue of the provisions
coμtained in s. 180 to the Customs authorities, there
is no fresh seizure under the Sea Customs Act. It
would, therefore, follow that, having regard to the circumstances in which the gold came into the possession
of the Customs authorities, the terms of s. 178A which
requires a seizure under the Act were not satisfied and
consequently that provision cannot be availed of to
throw the burden of proving that the gold was not
smuggled, on the accused."
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The ratio of that case is of no assistance to the appellants, for
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tl!e question at issue in that case was in regard to burden of proof
under s. 178A of the Sea Customs Act and whether the presumption under that section would arise in the special circumstances
of the case.
Mr. Pathak also referred to the decision of the
Queen's Bench in Vinter v. Hind( 2 ) in which the respondent, a F
butcher, exposed for sale part of a cow which had died of disease,
and sold the meat to a customer, who took it home for food, and
some days afterwards was requested by the appellant, an inspector
of nuisances, to hand it over to him, and it was condemned by a
justice as unfit for the food of man. It was held by the Queen's
Bench in these circumstances that the meat was not "so seized"
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and condemned as is prescribed by ss. 116, 117, of the Public
Health Act, 1875, and therefore the respondent was not liable,
as the person to whom the same "did belong at the time of the
exposure for sale," to a penalty under s. 117.
The decision of
this case is of no help to the appeallants because the actual decision
turned upon the language of ss. 116 and 117 of the Public Health
H
Act, 1875 and the respondent was held not liable to the penalty
··---
(I) (1962] Supp. 1 S.C.R. 364.
(2) (1882) 10 Q.B. 63.
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DURGA PRASAD v. H. R. GOMES (Ramaswami, J.)
1003
A because he was not the person to whom the meat "did belong at
the time of exposure for sale."
It was then contended on behalf of the appellants that there
is no material to show that the documents seized were relevant
or useful to the proceeding under the Customs Act and in the
B absence of such material the seizure of the documents must be
held to be illegal.
We do not think there is any warrant for
this argument.
The orders of the Collector dated September 6,
1963 and September 11, 1963 both state that the Collector was
of opinion "that the documents were useful for and relevant to
the proceedings under the Customs Act, 1962". Respondent no.
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2 has also stated in para 3 of his return that information was
received from a reliable source that the appellant had a consider·
able quantity of hoarded gold which had not been declared by
him under Rule 126 I of the Defence of India
(Amendment)
Rules, 1963, and for this purpose a raid was made for search of
gold and go:d ornaments.
Respondent no. 2 has further stated
D as follows:
"During this search, I also came across certain documents and records which indicated that the petitioner
had acquired considerable quantity of gold which was
far in excess of the quantity of gold declared by the
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petitioner and his family members in the declarations
submitted by them under Rule 126 I of the Defence of
India (Amendment) Rules, 1963. In addition, I also
found documents indicating that the petition.er had resorted to dealings constituting breach of the Customs
Regulations and the Regulations under the Foreign ExF
change Regulation Act punishable under the Sea Customs Act, 1878 and/or the Customs Act, 1962. The
documents, note-books and files which I came across
also indicated that the petitioner had resorted to underinvoicing of export of mineral ores to the extent of
millions of rupees, large-scale purchase of gold to the
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tune of lakhs of rupee.s, unauthorised sale of Foreign
Exchange involving lakhs of dollars (U.S.) to parties of
whom some are persons known to be directly or indirectly involved in smuggling activities."
We accordingly hold that there is sufficient material to support thi
information of the Collector of Customs under s. 110(3) of the
H
Customs Act that the documents would be useful or relevant to
!he proceedings under the Act and the argument of Mr. Pathak
on ti.Ms aspect 0f the case must be rejected.
1004
SUPREME COURT
REPORTS
[1966] 2 S.C.R.
For the reasons expressed, we hold that the High Court was
A
right in saying tha~ the appellant had made out no case for grant
of a writ.
This appeal accordingly fails and must be dismissed
with costs.
Civil Appeal No. 671 of 1965 :
This appeal arises out of Special Civil Application no. 437
of 1963 relating to the search o~ the premises of the appellantDurga Prasad at Tumsar and Nagpur on the basis of an authorisation dated September 24, 1963 issued by the Assistant Collector
of Customs, Raipur to the Superintendent of Central Excise at
Nagpur under s. 105 of the Customs Act which reads as follows : c
"Shri H. R. Gomes,
Superintendent (Prev.) H. Qrs.,
Central Excise, Nagpur.
Whereas information has been laid before me of the
suspected commission of the offence under section 11
read with section 111 of the Customs Act 1962 (52 of
1962) and it has been made to appear that the production of contraband goods
and documents relating
thereto are essential to the enquiry about to be made in
the suspected offence.
This is to authorise and require you to search for the
said articles and documents in the shop/office/godowns/
residential premises/conveyance/packages belonging to
or on the person of Shri Durgaprasad Saraf Tumsar
and if found, to produce the same forthwith before the
undersigned returning this authority letter with an
endorsement certifying what you have done under it
immediately upon its execution.
Given under my hand and the seal of this office,
this 24th day of September, 1963.
Seal of the Integrated
Divisional Office,
Central Excise, Raipur.
Sd.
(R. N. Sen),
Assistant Collector,
Customs & Central
Excise : l.D.O.
Raipur : M.P."
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DURGA PRASAD V. H. R. GOMES (Ramaswami, J.)
l 005
It is contended on behalf of the appellant that the auth?risation is not legally valid since there is no averment by t~e Assistant
Collector that the documents were "secreted".
Section 105 of
the Customs Act states :
"105. ( 1) If the Assistant Collector of Customs, or
in any area adjoining the land frontier or the coast of
India an officer of customs specially empowered by
name in this behalf by the Board, bas reason to believe
that any goods liable to confiscation, or any documents
or things which in his opinion will be useful for or
relevant to any proceeding under this Act, are secreted
in any place, he may authorise any officer of customs
to search or may himself search for such goods, documents or things.
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( 2) The provisions of the Code of Criminal Procedure, 1898, relating to searches shall, so far as may be,
apply to searches under this section subject to the modification that sub-section ( 5) of section 165 of the said
Code shall have effect as if for the word "Magistrate",
wherever it occurs, the words "Collector of Customs"
were substituted."
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According to the appellant the power of seizure under s. 105 of·
the Customs Act cannot be exercised unless the Assistant Collector
had reason to believe that the documents were secreted. It was
argued that the word "secreted" is used in s. 105 in the sense of·
being hidden or concealed and unless the officer had reason to
believe that any document was so concealed or hidden, a search.
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could not be made for such a document.
We are unable to
accept the submission of the appellant as correct. In our opinion,
the word "secreted" must be understood in the context in which
the word is used in the section.
In that context, it means 'documents which are kept not in the normal or usual place with a
view to conceal them' or it may even mean 'documents or things
G which are likely to be secreted'; In. other words, documents or
things which a person is likely to keep out of the way or to put
111 a place where the officer of law cannot find it. It .is in this
sense that the word 'secreted' must be understood as it is used
in s. 105 of the Customs Act.
In this connection reference was
H
made by the Solicitor-General to the affidavits of the Superintendent 2f Central Excise dated October 28, 1963. Para 6 states
that Some of the documents were recovered from the Jiving
apartments and safe of the petitioner and also from the drawers
1006
SUPREME COURT
REPORTS
[1966] 2 S CR.
Qf the tables and cabinets utilised by his sons and a search was
A
made for documents which may have been secreted in
the
premises".
It was further submitted on behalf of.. the appellant that the
power of search under s. 105 of the Customs Act cannot be exerdsed unless the authorisation specifies a document for which search
is to be made.
In other words, it is contended that the power
Df search under s. 105 of the Customs Act is not of general
<:haracter.
We do not accept this argument as
correct.
The
object of grant of power under s. 105 is not search for a particular
document but of documents or things which may be useful or
necessary for proceedings either pending or contemplated under
the Customs Act. At that stage it is not possible for the officer
to predict or even to know in advance what document~ could·
be found in the search and which of them may be useful or
necessary for the proceedings.
It is only after the search is made
and documents found therein are scrutinised that their relevance
Qr utility can be determined.
To require, therefore, a specification or description of the documents iii advance is to misapprehend the purpose for which the power is granted for effecting a
search under s. 105 of the Customs Act.
We are, therefore, of
opinion that the power of search granted under s. 105 of the
Customs Act is a power of general search. But it is essential that
before this power is exercised, the preliminary conditions required
by the section must be strictly satisfied-that is, officer concerned
must have reason to believe that any documents or things, which
in his opinion are relevant for any proceeding under the Act, are
secreted in the place searched.
We have already mentioned the
reasons for holding that this condition has been satisfied in the
present case.
For the reasons expressed, we hold that the appellant has
made out no case for the grant of a writ and this appeal must be
dismissed with costs.
Appeals dismissed.
L8Sup,C.l,/66-2,500-'·11·66·· GIPP,
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