Bookmark
PDF
Share
CaseIQ

State Of Maharashtra v. Narayan

Bombay High Court

Aug 3, 1990

Judgment

Subsequent
References

CaseIQ

Smart Summary (Beta)

Concise, Structured Summary of the Provided Opinion

Factual and Procedural Background

Pursuant to authorisation under section 132(1) of the Income Tax Act, an authorised officer (P.W.3 Prasad) and a raiding party searched premises of the accused Narayan Bajaj beginning 29-10-1985. During that search pawned jewellery was separated and kept in an almirah which was sealed and a prohibitory order purportedly under section 132(3) was issued (search panchanama Exh.21, prohibitory order Exh.18). The search that night remained incomplete and was resumed on 30-10-1985. On reopening the almirah the officers found articles missing and observed that steel plates on the rear side of the almirah had been cut in two places. A report/complaint (Exh.16) was made to the police and the almirah was seized by P.W.6 Tiwari (seizure panchanama Exh.23) and then handed back to the accused on supratnama.

The accused was charged with offences under section 275A of the Income Tax Act and sections 406 and 461 of the Indian Penal Code. At trial the accused was acquitted. The State (by way of appeal) and the Commissioner of Income Tax (by revision application) challenged the acquittal, contending inter alia that the trial court erred in its reasoning on sanction under section 279 of the Act, on the validity of the prohibitory order under section 132(3), and on sufficiency of evidence. The High Court heard arguments and set aside the trial court's acquittal and convicted the accused on all three counts, imposing sentences and fines.

Legal Issues Presented

Whether the finding of acquittal by the trial court for offences under section 275A of the Income Tax Act and sections 406 and 461 IPC was valid and correct.
Whether the authorising officer could validly issue a prohibitory order under section 132(3) of the Income Tax Act where the search begun under section 132(1) remained incomplete and seizure therefore could not practicably be effected that night.
Whether section 279 (sanction by Commissioner) applied so as to preclude prosecution under section 275A in the circumstances of this case.
Whether the facts and evidence (including witness testimony and panchanamas) were sufficient to establish that: (a) the accused contravened the prohibitory order (section 275A), (b) committed breach of trust (section 406 IPC), and (c) caused mischief/damage (section 461 IPC).

Arguments of the Parties

State / Prosecution

Challenged the trial court's reasoning that section 279 of the Act (sanction by Commissioner) prevented prosecution: the prosecution was launched by the State after investigation and was not a private complaint proceeding at the instance of the Income Tax Department, therefore section 279 had no application.
Urged that the authorised officer (P.W.3) validly resorted to section 132(3) given the impracticability of completing the search within the night and that the prohibitory order (Exh.18) therefore had legal foundation and was binding on the accused.
Relied on witness evidence (P.W.2, P.W.3, P.W.6) and documentary exhibits (Exh.16, Exh.21, Exh.23) to show that the almirah had been intact when sealed, was later cut at two places and articles were missing, thus supporting convictions under section 275A and the relevant IPC provisions.

Accused / Defence

Contended that prior sanction of the Commissioner under section 279 was not obtained and thus prosecution under section 275A could not proceed.
Argued that the authorised officer (P.W.3) did not form the requisite opinion that the pawned articles were "property undisclosed for the purposes of the Act" before issuing a prohibitory order under section 132(3), and therefore the order (Exh.18) was void ab initio; contravention of it could not constitute an offence under section 275A.
Submitted that 'late hours' or inconvenience to officers did not fall within the meaning of "reason" for invoking section 132(3) and that it was not impracticable to complete the search.
Pointed to non-production of the physical almirah and supratnama in court and omissions in the search panchanama (Exh.21) as undermining the prosecution case.
On sentencing, urged leniency because the incident dated from 1985 and the accused was about 65 years old.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
H.L. Sihal v. Commissioner of Income-Tax, Patiala, 1976 Tax L.R. 311	Interpreted for the proposition that, besides the Commissioner, the authorised officer effectuating seizure must reach the conclusion that the property was undisclosed for the purposes of the Act.	Relied upon in submissions to frame the query whether P.W.3 had formed the requisite opinion before issuing the prohibitory order; the Court considered such precedents when analysing the requirement of opinion and the stages under section 132.
Om Prakash Jindal v. Union of India, 1976 Tax L.R. 389	Invoked regarding the requirement that the authorised officer form an opinion about the nature of property before seizure/prohibitory action under section 132.	Considered by the Court in assessing whether the officer had the necessary conclusion/opinion and whether invocation of section 132(3) was justified given incomplete search.
Jain and Jain v. Union of India, 1981 Tax L.R. 1508	Applied to the principle that the authorised officer must reach a conclusion about the property being undisclosed prior to seizure and related procedural requirements under section 132.	Used as supporting authority in submissions; the Court examined these authorities while explaining that section 132 represents a continuous process and that incompletion of search can affect the ability to form opinion and seize, validating use of section 132(3) when impracticable to seize.

Court's Reasoning and Analysis

The Court proceeded through a sequence of legal and factual analyses, applying statutory interpretation to the Income Tax Act provisions and evaluating witness testimony and documentary exhibits:

Nature of section 132 procedure: The Court treated authorisation under section 132(1) as a single, continuous and homogeneous process comprising entry, search and enquiry, formulation of opinion, seizure and inventory. The Court held that seizure cannot be validly effected unless the earlier stages are complete; incompletion of search impedes formulation of opinion and seizure.
Status of section 132(3): The Court distinguished contingencies covered by the provisos to section 132(1) from those contemplated by section 132(3). It held that section 132(3) addresses contingencies other than those in the second proviso — i.e., situations of impracticability (not only impossibility) to seize. The Court construed the "reasons" in section 132(3) as encompassing impracticability arising from factors such as physical or mental incapacity of officers due to over-strain (as opposed to strictly literal impossibility).
Application to the facts about timing and impracticability: The authorised officer and other officers testified they started operations at about 8:30 a.m. and continued until 9:30 p.m. and that it was not feasible to complete the search that night. The Court accepted this evidence and held that incompletion of the search legitimately affected the officer's ability to formulate the opinion and effect seizure, permitting recourse to section 132(3) to issue the prohibitory order (Exh.18).
On section 279 (sanction): The Court examined the trial court's reliance on absence of sanction under section 279 for prosecution under section 275A and held that section 279 did not apply in the present case because the prosecution was initiated by the State after investigation and not at the instance of the Income Tax Department as a private complainant. Accordingly the trial judge's reliance on section 279 was erroneous.
Evaluation of evidentiary material: The Court found the testimony of P.W.2 (Krishimachari), P.W.3 (Prasad) and P.W.6 (P.S.I. Tiwari), together with documents Exh.16 (complaint), Exh.21 (search panchanama) and Exh.23 (seizure panchanama), credible and corroborative. Key factual findings accepted by the Court included:
- Officers had checked the almirah and found it intact when storing the pawned articles.
- On reopening the next day the level of the bags in the almirah had gone down, the rear of the almirah bore two cuts, particles of steel were found inside, and smell/paint suggested tampering.
- The defence did not suggest the cut marks existed prior to handing over to officers nor successfully impeach these facts in cross-examination; omissions in the search panchanama did not discredit consistent oral testimony.
Legal conclusions from facts: From the accepted facts the Court concluded:
- The prohibitory order (Exh.18) was validly issued under section 132(3) and binding on the accused.
- The accused's act of cutting open the almirah and removing articles between the night of 29-10-1985 and 30-10-1985 contravened the prohibitory order, thereby constituting an offence under section 275A of the Income Tax Act.
- The deliberate cutting to effect removal showed intention to commit mischief, attracting section 461 IPC.
- Because the pawned jewellery was in the care and custody (trust) of the accused and articles were removed while under his custody, the accused was liable under section 406 IPC (criminal breach of trust), although the prosecution could not exactly quantify the missing items.
On non-production of the almirah/supratnama: The Court addressed the trial court's view that non-production of the physical almirah or supratnama crippled the prosecution. It rejected that conclusion, holding that the voluminous oral and documentary evidence sufficiently established cutting and removal; omission to produce the object did not create a legal infirmity in the prosecution.
Sentence considerations: The Court heard submissions for mitigation (age of accused and the remote date of incident) and opposing submissions emphasizing seriousness and interference with official duties. After considering both sides, the Court convicted and sentenced as set out in its order.

Holding and Implications

Core Ruling: Criminal Appeal No. 195/87 and Criminal Revision Application No. 153/87 were allowed; the trial court's acquittal dated 6-4-1987 was set aside and the accused Narayan s/o Champalal Bajaj was convicted for the offences charged.

Sentence and orders imposed by the Court (direct effects):

Convicted under section 275A of the Income Tax Act: rigorous imprisonment for six months and fine of Rs. 5,000/-. In default of fine payment, further rigorous imprisonment for three months.
Convicted under section 406 IPC: rigorous imprisonment for six months and fine of Rs. 5,000/-. In default of fine payment, further rigorous imprisonment for three months.
Convicted under section 461 IPC: rigorous imprisonment for six months and fine of Rs. 5,000/-. In default of fine payment, further rigorous imprisonment for three months.
The substantive terms of imprisonment are directed to run concurrently; however, the default sentences for non-payment of fines are not to run concurrently with each other.

Broader implications: The opinion primarily addresses the correctness of the acquittal and the application of statutory provisions to the facts. It clarifies that section 132(3) may be invoked where it is impracticable (not strictly impossible) to effect seizure and that section 279 did not bar prosecution in the factual context of a State-initiated prosecution after investigation. The Court did not purport to lay down a novel principle beyond its statutory interpretations and factual conclusions; the decision's principal effect is to reverse the trial acquittal and convict the accused on the specified counts.

Order accordingly.

This summary is strictly confined to and derived from the content of the provided opinion. No facts, arguments or outcomes have been added beyond what appears in that text.

Show all summary ...

A.A Desai, J.:— By this appeal at the instance of State and revision application on behalf of the Commissioner of Income Tax, the appellant and revisionist have questioned the validity and correctness of the finding of acquittal for the offences punishable under section 275A of the Income Tax Act (hereinafter referred to as “the Act”), section 406 and section 461 of the Indian Penal Code.

2. Pursuant to authorisation under sub section (1) of section 132 of the Act, P.W 3 Prasad on 29-10-1985 undertook search of the premises of respondent accused Narayan Bajaj. The search continued till 9-30 P.M However, it was incomplete. During the course, P.W 3 Prasad and the raiding party separated the pawned jewellary and kept it in the almirah. The almirah was sealed. P.W 3 Prasad then issued prohibitory order purported to be under sub-section (3) of section 132 of the Act Semite panchanama (Exh. 21) was drawn.

3. P.W 3 Prasad and his party next day, i.e on 30-10-1985 tesumed and continued their search. They opened the almirah and found that some articles were missing. On verification, they noticed that steel plates of rear side of the almirah have been cut at two places. P.W 2 Krishimachari, the local Income Tax Officer thereafter lodged a report vide Exh. 16 to the Police Station, Yavatmal. P.W 6 Tiwari seized the almirah in question vide panchanama (Exh. 23). The almirah was then handed over to the accused on supratnama.

4. After completing the investigation, the accused was charged and tried for the offences enumerated hereinabove. The defence of the accused was of denial. The trial Court observed that (a) prior sanction of the Commissioner as envisaged under section 279 of the Act to prosecute the accused for the offence punishable under section 275. A of the Act was not obtained; (b) the authorised officer, namely, P.W 3 Prasad had not reached the conclusion that the pawned articles kept in the almirah were the properly undisclosed for the purpose of the Act. Moreover, it was not totally impracticable for the raiding party to continue and complete the search. As such, P.W 3 Prasad could not take resort to sub-section (3) of section 132 of the Act for issuing the prohibitory order; (c) the almirah in question and the supratnama were not produced in the Court for verification. Adopting these reasonings, the learned trial Court has recorded the impugned finding of acquittal.

5. Heard Shri Charde, the learned Additional Public Prosecutor for the State, Shri Jaiswal, the learned Counsel for the applicant-revisionist and S/Shri Patshikar and Akolkar, the learned Counsel for the accused.

6. Contravention of the prohibitory order purported to be under sub-section (3) of section 132 is made punishable under section 275 A of the Act. Section 279 of the Act, as then stood, provided that a person shall not be proceeded against for an offence under section 275…………except at the instance of the Chief Commissioner or Commissioner. As per mandate of the provision, it follows that the Department of Income Tax cannot proceed or prosecute the offender who has committed a breach of the prohibitory order except at the instant or with the authority of the Commissioner of the Department. In the instant case, it is true that the report to the police station has been made by P.W 2 Krishimachari vide Exh. 16. However, P.W 2 Krishimachari, the local Income Tax Officer in the report after narrating the incident had merely prayed for registration and investigation, of the offences. After completion of the investigation, the State has launched the prosecution. In the case before us, the prosecution of the accused-respondent is neither on the complaint nor by the complainant. The prosecution being at the instance and on behalf of the State, section 279 of the Act has no application. The reason as adopted by the learned trial Judge are patently erroneous.

7. Relying on the decisions reported in (H.L Sihal v. Commissioner of Income-Tax. Patiala)1 1976 Tax L.R 311, (Om Prakash Jindal v. Union of India)2, 1976 Tax L.R 389 and (Jain and Jain v. Union of India)3, 1981 Tax L.R 1508, it is urged before us that besides the Commissioner, the authorised Officer before effecting seizure has to reach the conclusion that the properly in question was undisclosed for the purposes of the Act. Ii is submitted that P.W 3 Prasad, the authorised officer, has not reached such conclusion or formulated the opinion that the pawned articles kept in the almirah in question were such property. Besides this, due to late hours, it cannot be said that for the raiding party, it was not practicable to complete the search. In absence of the requisite ingredients and conditions, it is urged that sub-section (3) of section 132 of the Act for issuing the prohibitory order could not be resorted to. Consequently, the order (Exh. 18) prohibiting the accused was without any legal foundation and void ahinitio. Breach or violation of such order in the Submission of the learned Counsel for the accused does not constitute any offence punishable under section 275 A of the Act.

8. Authorisation under sub-section (1) of section 132 of the Act empowers the concerned officer firstly to make entry in the premises of a particular person, then to search and hold enquiry, thereafter to seize and lastly to prepare an inventory of such articles, valuables or jewellery. This is a single, continuous and homogenous process with various stages as described. Search, enquiry and formulating opinion are the stages prior to effecting of the seizure. There could not be a valid seizure unless the earlier stages are complete. Incompletion of search creates impediment in formulating the opinion and causing ultimate seizure of the concerned property.

9. P.W 3 Prasad has specifically stated that they reached Yavatmat at about 8.30 A.M and then started their operation. It continued upto 9.30 P.M According to the witnesses, it was not possible to complete the search on that day. Shri Palshikar, the learned Counsel appearing for the accused, made a submission that this could not be a ground within the import of the term “reason” as envisaged in sub-section (3) of section 132 of the Act According to the learned Counsel, may be due to late hours, it might be inconvenient for the concerned officers to complete the search still it was not difficult may impossible.

10. Proviso to sub-section (1) of section 132 of the Act deals with various contingencies when it becomes impracticable to seize the particular property or articles. The first proviso refers to building, place, vessel, vehicle, aircraft, etc., whereas the second proviso to sub-section (1) refers to the impossibility or impracticability to take physical possession of any valuable article. sub-section (3) of section 132 of the Act with which we are concerned, deals with the contingencies which are not covered by the second proviso to sub-section (1). Section 132(3) of the Act lays down that “the authorised Officer may, where it is not practicable to seize any such books of account, other documents, money, etc.……..for the reasons other than those mentioned in the second proviso to sub-section (1) serve an order on the owner……” In view of this legal provision, it is explicit that the contingency contemplated by sub-section (3) of section 132 of the Act could be other than those provided in proviso to sub-section (1) of section 132 of the Act. Such contingency in the given case could be impracticability due to physical or mental incapability of the concerned officer owing to over-strain. In view of our discussion, we hold that the reasons as contemplated under sub-section (3) of section 132 of the Act pertain to impracticability rather than impossibility.

11. P.W 2 Krishimachari and P.W 3 Prasad have specifically stated that it was not feasible for them to complete the search even after continuing it for the whole night. As the completion of the search was not feasible, it had certainly created impediment in the way of the officer to formulate the opinion and effect seizure of the objectionable material. As such, in view of our finding that it being a continuous and homogenous process, incompletion of the search has certainly affected the ultimate act of effecting seizure of the property undisclosed for the purpose of the income Tax Act. In the situation, P.W 3 Prasad was competent to take resort to sub-section (3) of section 132 of the Act for issuing the prohibitory order, marked as Exh. 18. The order has a legal foundation and is within the parameters of the relevant provision. The same was, “therefore, binding on the accused.

12. Now coming to the merit of the prosecution case, we find the testimony of P.W 2 Krishimachari, P.W 3 Prasad and P.W 6. P.S.I Tiwari coupled with Exh. 16 complaint, Exh. 21 search panchanama and Exh. 23 seizure panchanama. P.W 3 Prasad in examination-in-chief has deposed that, “the bundles of the pawned articles along with some cash that was found, were then kept in that almirah which became full. Before actually keeping ornaments in that almirah, I and Mani checked and verified that the almirah was quite safe and intact on all the sides. “The evidence of P.W 2 Krishimachari on this aspect is on the similar lines and corroborating P.W 3. The defence has not questioned this statement of the witnesses nor it has suggested that the almirah in question was already having cut marks even at the time of handing over the same to the Officers on 29-10-1985. Shri Palshikar, the learned Counsel for the accused, tried to urge before us that there is no reference in this behalf in the search panchanama (Exh. 21). It is true that in the search panchanama (Exh. 21) there is no such reference that the almirah was intact, However, considering the substantive testimony of the two witnesses which is consistent and cogent, omission in this regard in the panchanama (Exh. 21) does not bring any discredit to the version of these two witnesses. Besides this, the version of these witnesses that the articles kept to the full capacity of the almirah is further supported by complaint (Exh. 16).

13. As regards the incident on the next day, i.e 30-10-1985, P.W 3 Prasad has stated that “I then opened the almirah. On opening the almirah. I thought (1) that the level of the bags in the almirah had gone down which was suggestive of the fact that some bags might have been removed, (2) I felt the smell of new paint, and (3) that there was a cut to the almirah in the rear side, that cut was about 5 and half × 6 and half inches.” However, while cross examining this witness in para (10) of Exh. 20, the omission in the Police statement has been brought on record.

14. Another witness on this aspect is P.W 2 Krishimachari. He stated that “accordingly 1 went there immediately by 11.15 a.m. I found that the almirah which was already opened by the search party, was cut at two places at the back side and the bags of ornaments were lesser in level than they were actually there”. While cross-exmining this witness, the defence made a suggestion to which he has answered that, “it is true that apart from the level (height) of the heaps of the cloth bags, there is no material to say that articles were removed from the second almirah by the accused. It is not true that the height (level) of cloth bags may automatically be lessened or reduced by lapse of time.” This positive suggestion on behalf of the defence is indicative of the aspect that they are not disputing as regards going down the level of the bags as witnessed by the officers on 30-1-1985.

15. P.W 6 P.S.I Tiwari who seized the almirah vide Exh. 23, has stated that he also noticed two cuts in the rear side and small particles of the steel plate inside the almirah. This version of the witness has also not been challenged. In the cross-examination, this witness has stated that, “I did not seize the very small tiny particles of the iron plate of the almirah as I did not think it necessary as their quantity was very small. Those particles were visible to the eye. There were colour patches on the almirah back side but I did not take any photograph of those patches. I did not take any photograph of the two cuts that were to the almirah back side. The sizes of the cuts as given in panchonama are 3-inches by 6 and half inches and 6 and half inches by 5 and half inches.” Considering the assertion of this witness read with others, the aspect of cutting the iron plate from the rear side at two places of almirah is established beyond doubt. This substantive testimoney of the witnesses is further supported by complaint (Exh. 16) and seizure panchanama (Exh. 23) wherein the condition of the almirah has been elaborated in detail. As discussed, it is not the defence or clarification made under section 313 of the Code of Criminal Procedure that the cut marks as referred to in the seizure panchanma and as described by the witnesses were already there. In view of this voluminous evidence-oral as well as documentary, non-production of the almirah in question or even the supratnama did not create any infirmity, legal or otherwise, in the prosecution case. The learned trial Judge has lost sight of this pertinent aspect and recorded the erroneous conclusion that the prosecution could not substantiate the charge in the absence of either the almirah in question or supratnama thereof. The approach of the learned trial Judge in this regard since patently incorrect, the impugned finding has resulted in miscarriage of justice.

16. The act of the accused-respondent in opening the almirah in question by effecting cut at two places between the night of 29-10-1985 and 30-10-1985 is derogatory to the direction as contained in the prohibitory order dated 29-10-1985. This act certainly constitutes contravention of the order. The accused respondent by this act rendered himself liable for the offence punishable under section 275-A of the Act.

17. The accused-respondent further by the same act, certainly with a definite intention to commit mischief, has effected the cut marks on the almirah and, therefore, he is liable for the offence punishable under section 461 of the Indian Penal Code.

18. It is evident from the testimony of P.W 2 Krishimachari and P.W 3 Prasad that the almirah is question containing pawned jewellery was kept in the care and custody of the accused respondent. The prohibitory order (Exh. 18) therefore, came to be issued. Under this order, P.W 3 has specifically directed, “I hereby order you not to remove, part with or otherwise deal with the articles mentioned below without my previous permission.” This circumstance has also fortified that the almirah in question was in care and custody of the accused and he was capable to deal with it which has been prohibited by order (Exh. 18). Besides this, the accused had complete domain over the almirah since it was kept in the bed room of the premises of the accused which was not sealed or locked by the Department. The care and custody of the accused besides the substantive testimony is also supported by the text of the complaint marked as Exh. 16. The complainant (P.W 2) has specifically stated that, “the entire almirah along with gold and silver ornaments was entrusted to the accused by the complainant from 10.30 p.m of 29-10-1985.”

19. The articles in the almirah were removed while the same were under the custody and domain of the accused. It is true that the officers did not prepare an inventory of the jewellery which was kept in that almirah. However, it is undisputed from the testimony, as discussed earlier that on the next day on opening of the almirah, it was noticed that the level of the bags of jewellery as dumped on the earlier day had gone down. It is true that the prosecution could not exactly quantify or estimate the material or the articles missing from the almirah, but the aspect as discussed, is definitely suggestive of the removal of the jewellery when the almirah was in the trust of the accused-respondent. The accused-respondent is, therefore, liable to be punished for the offence under section 406 of the Indian Penal Code.

20. We heard Shri Palshikar on the question of sentence. According to Shri Palsnikar, the incident is of 1985. Besides this, accused Narayan Bajaj is an old man of 65 years. In view of these circumstances, leniency be shown. Shri Charde and Shri Jaiswal, however, resisted the submission. According to them, the act constituting the offence is very serious and it is also interference in the discharge of the official duties by the Government servants. The manner in which the offence has been committed in the submission of the learned Counsel, does not deserve any sympathetic or lenient view. Considering the rival submissions, we pass the following order:

21. Criminal Appeal No. 195/87 and Criminal Revision Application No. 153/87 are allowed. The finding of acquittal vide impugned judgment dated 6-4-1987 is hereby set aside. The accused respondent Narayan s/o Champalal Bajaj is convicted for the offence punishable under section 275 A of the Income Tax Act and directed to suffer rigorous imprisonment for a period of six months. He is further directed to pay fine of Rs. 5,000/-. In caseof default, he shall suffer further rigorous imprisonment for a period of three months.

22. He is further convicted for the offence punishable under section 406 of Indian Penal Code and directed to suffer rigorous imprisonment for a period of six months and further directed to pay fine of Rs. 5000/-. In case of default, he shall suffer further rigorous imprisonment for a period of three months.

23. He is also convicted for the offence punishable under section 461 of Indian Penal Code and directed to suffer rigorous imprisonnent for a period of six months and pay fine of Rs. 5,000/-. In case of default, he shall suffer further rigorous imprisonment for a period of three months.

24. We direct the substantive sentences only to run concurrently. However, the sentences as imposed in case of default for payment offineshall not run concurrently.