Mohammad Serajuddin vs R. C. Mishra

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 158 of 1960

Decision Date: 24 November, 1961

Coram: M. Hidayatullah, J.L. Kapur, J.C. Shah

In the matter of Mohammad Serajuddin versus R. C. Mishra, the Supreme Court of India delivered its judgment on 24 November 1961. The bench that heard the case comprised Justice M. Hidayatullah, Justice J. L. Kapur and Justice J. C. Shah. The citation of the decision is recorded as 1962 AIR 759 and 1962 SCR Supl. (1) 545, with the case also reported in the 1965 Supreme Court reports at page 1. The dispute concerned the seizure of documents under the Sea Customs Act, 1878, and the appropriate custody of those seized items. The respondent, R. C. Mishra, was suspected of having illegally exported dutiable goods in violation of the Sea Customs Act and of concealing related documents in two separate premises. The petitioner, Mohammad Serajuddin, sought to enforce a search under section 172 of the Act, which authorises a magistrate to issue warrants for the inspection of premises where such documents may be found.

Upon obtaining the warrants, customs officials conducted searches of the two premises and seized a substantial number of documents. The customs authorities then applied to the magistrate for retention of the seized documents in their custody. The magistrate, however, ordered that the documents should remain under the custody of the court, allowing the customs officials only the opportunity to inspect them while they were in the court’s possession. After inspecting a portion of the documents, the customs officials again approached the magistrate, this time requesting either full custody of the documents or, alternatively, the provision of a separate room in which they could examine the documents privately. The magistrate declined both requests, maintaining that the documents would stay in his custody.

The matter was subsequently taken on revision to the Calcutta High Court, which held that the customs authorities were entitled to custody of the seized documents and directed that the documents be handed over to them immediately. On appeal, the Supreme Court considered the applicable statutory provisions. It held that articles and documents seized under a warrant issued by a magistrate pursuant to section 172 of the Sea Customs Act must be produced before the magistrate who issued the warrant, and that the magistrate alone possessed the authority to determine their disposition. The court explained that the magistrate could either deliver the seized items to the customs authorities or retain them in his own custody, as he deemed appropriate. The second paragraph of section 172 was interpreted to give the warrant the same effect as a search warrant issued under the criminal procedure law, and the form prescribed by the Code of Criminal Procedure required that seized articles be brought before the court. Consequently, the magistrate’s order that the documents remain in his custody and be examined in his court was deemed lawful.

The Supreme Court cited the decision of S. K. Sribastava v. Gajanand (1956) 60 C.W.N. 1073 as approved authority supporting its view. It noted that the earlier cases of Calcutta Motor Cycle Co. v. Collector of Customs (1955) 60 C.W.N. 67 and Collector of Customs v. Calcutta Motor and Cycle Co. AIR 1958 Cal. 682 were not approved. The final judgment affirmed that the magistrate’s discretion over the custody of seized documents, exercised in accordance with the provisions of the Sea Customs Act and the Code of Criminal Procedure, was proper, and it rejected the High Court’s direction to hand over the documents to the customs authorities.

On July 1, 1960, the Calcutta High Court issued a judgment in Criminal Revision No. 500 of 1960. Counsel N. C. Chatterjee and P. K. Chatterjee represented the appellant, while N. S. Bindra and T. M. Sen appeared for the respondent. The judgment was pronounced on November 24, 1961, and delivered by Justice Hidayatullah. The appellant, Mohammad Serajuddin, acted as the managing partner of Messrs Serajuddin and Co., located at No. 19A British Indian Street and P‑16 Bentick Street, Calcutta. The firm was engaged in the export of mineral ores and owned certain mines, the principal activity being the export of manganese ore. Until April 1948 there was no export duty on manganese ore; on April 19, 1948 an ad valorem export duty was imposed. This duty was withdrawn in August 1954, re‑imposed in September 1956, and withdrawn again in November 1958. Throughout these periods the appellant continued to export manganese ore together with other mineral ores.

On November 28, 1959 the appellant filed an application under section 172 of the Sea Customs Act before the Chief Presidency Magistrate, Calcutta, seeking the issuance of warrants to search two premises identified above. The application alleged that documents pertaining to the illegal export of dutiable goods, which had been exported in violation of the Sea Customs Act, were concealed in those premises. In response, the Chief Presidency Magistrate issued two warrants, originally set to be executed on December 5, 1959, and later extended to December 15, 1959. The search was reportedly conducted with excessive vigor, and on December 12, 1959 the Magistrate limited the scope of the search to documents relating specifically to manganese ore and fixed a particular time of day during which the search could be carried out.

During the course of the proceedings the appellant made several attempts to have the warrants withdrawn, but these applications were unsuccessful. Ultimately the Customs authorities seized a total of 959 items, including documents, registers, books and other materials. The Customs authorities wished to retain the seized items in their own custody for detailed scrutiny. Accordingly, on December 15, 1959 they filed an application requesting permission to keep the documents under their control. On the same day the appellant also applied, seeking the return of those documents that were not connected with the export of manganese ore and requesting that the remaining documents be placed under the custody of the Court.

The Chief Presidency Magistrate issued an order on December 15, 1959 directing that all seized documents would remain in the Court’s custody, and that the Customs authorities would be allowed to inspect the documents within the Court premises. The inspection of the documents by the Customs officials began on December 17, 1959. Subsequent applications were filed by the appellant for the return of documents unrelated to manganese ore and by the Customs authorities for an extension of time and for the hand‑over of all documents to them. The Magistrate declined both of these requests, refusing to return the unrelated documents to the appellant and refusing to transfer the documents to the Customs authorities.

In this case, the Magistrate had previously extended the time allowed for inspection of the seized documents until 9 April 1960. On 6 February 1960, the Customs authorities submitted what was described as their final application seeking to take custody of the documents and to obtain certain facilities that would permit a proper and confidential inspection, should the inspection be conducted within the Court premises. The Magistrate dismissed that application summarily on the same day. In that final application, the Customs authorities explained that, besides requesting custody, they faced a large number of documents which required examination in connection with extensive records kept by the Customs Department, the Shipping Department, and the related shipping documents. They further stated that they needed to question certain witnesses and informers, and that it would be impossible to complete the work within a reasonable period if the inspection had to be carried out only during Court hours and in the presence of the appellant’s representatives. As an alternative, they asked for a separate room in which the Customs officers could conduct their scrutiny and discuss matters privately, and they also requested permission to inspect the records after Court hours because their daytime staff was limited. Both of these requests were disposed of summarily. However, in earlier orders the Magistrate had indicated that he could provide only a room that he could spare, noting that he did not have unlimited accommodation available. He also observed that he would not, under any circumstances, permit the Customs authorities to remove the seized documents, which had been taken pursuant to warrants issued by him. He asserted that the documents remained in his possession and could be inspected only at the time, place and manner that he directed. The Customs authorities challenged the Magistrate’s order by filing an application for revision in the Calcutta High Court. According to the practice of that High Court, the Chief Presidency Magistrate was required to show cause against the revision application, and he did so on the same grounds. The High Court disposed of the revision application on 1 July 1960, and the order issued on that date became the subject of the present appeal, with a certificate of appeal. In its order, the High Court observed that the Chief Presidency Magistrate had placed real difficulties in the way of the Customs authorities’ prompt and proper completion of the document scrutiny, and that insufficient consideration had been given by the Magistrate to this expectation of the case. The High Court held that, under the law, the Customs authorities were entitled to take custody of the seized documents. Accordingly, it ordered that all the documents, except for sixty‑three of them, should be handed over to the Customs authorities immediately, and it directed that the scrutiny of the documents be completed within three months from the date the High Court’s order reached the Chief Presidency Magistrate.

In this case the Court first examined whether the Customs authorities were entitled, under a search warrant issued pursuant to section 172 of the Sea Customs Act, to retain the seized documents for their own scrutiny, and whether a Magistrate could lawfully refuse to allow the removal of those documents for examination. If the answer to that issue were negative, the Court would then consider whether the order issued by the Chief Presidency Magistrate had failed to provide the Customs authorities with adequate facilities for the inspection and scrutiny of the documents. The Customs authorities asserted that, once a warrant has been issued, the seized documents belong to them for the purpose of performing the statutory functions assigned to them. They argued that no distinction should be drawn between contraband goods and the documents that relate to such goods, and that the same procedural treatment should apply to both. According to their submission, when goods are seized without a warrant the Customs authorities are not required to produce them before a Magistrate; likewise, when goods or documents are seized under a warrant, the Magistrate’s role is limited to authorising the entry for the search, after which the Customs officials may dispose of the seized items in the course of determining whether any prohibited goods have been imported in contravention of customs law. The authorities further contended that, just as seized goods do not have to be presented before the Magistrate, seized documents likewise need not be produced before him. They did concede, however, that the Magistrate retains jurisdiction over the warrant and may withdraw, annul or modify it. The Court noted that, in the Calcutta High Court, divergent opinions existed on this point, arising from two expressions in section 172. That provision reads: “Any Magistrate may, on application by a Customs collector, stating his belief that dutiable or prohibited goods or any documents relating to such goods are secreted in any place within the local limits of the jurisdiction, such Magistrate, issue a warrant to search for such goods or documents. Such warrant shall be executed in the same way, and shall have the same effect, as a search‑warrant issued under the law relating to Criminal Procedure.” In an unreported decision of the Calcutta High Court, Calcutta Motor & Cycle Co. v. Collector of Customs (1), Justice Debabrata Mookerjee held that a search warrant must be issued when the Customs officer expresses his belief, and that the Magistrate is not required to form an independent opinion. He further observed that warrants issued under section 172 are not imbued with every characteristic of a warrant under section 96 of the Criminal Procedure Code, and that the form prescribed by the Code may be suitably altered under section 555 of the Criminal Procedure Code. The judgment of Justice Mookerjee, however, was not produced before this Court, and the present summary is drawn from the judgment under appeal.

In the judgment that is under appeal, the record of the decision in Calcutta Motor and Cycle Co. v. Collector of Customs (1) was not produced before the Court, and therefore the Court relied on a summary that had been incorporated into the appealed judgment. The same subject matter had also been considered by the Calcutta High Court in two additional cases, the opinions of which appear in certain unauthorised reports. In the first of those cases, Calcutta Motor Cycle Co. v. Collector of Customs (2), the learned judge, Sinha, entertained the petition under Article 226 of the Constitution and affirmed his view in a later Division‑Bench decision, Collector of Customs v. Calcutta Motor and Cycle Co. (1). That decision held that a general search warrant that does not specify the particular goods or documents to be seized is nonetheless valid, and that a warrant authorising a search necessarily confers the power to seize the identified goods or documents. In addition, Sinha, J. observed, without forming a binding part of the judgment, that the goods or documents seized pursuant to the search may be retained by the Customs authorities and need not be produced before the Magistrate, provided that the warrant be suitably amended to enable the Customs officers not only to search but also to seize the items. By contrast, in S. K. Srivastava v. Gananand (2), the learned judge, Sen, dissented from Sinha’s observations. He held that when goods or documents are seized under a search warrant, their ultimate disposal must be subject to an order of the Magistrate, and that the Sea Customs Act contains no provision granting the Customs collector the final authority to determine the fate of the seized papers and books. Sen, J. also rejected the contention that the absence of a pending proceeding before a court obviates the need to produce the seized items before the court. He further pronounced that the Magistrate may require that the inspection of the seized material be completed within a reasonable time and that any papers or books not required for the purposes of the case be promptly returned to the concerned party. At page 1078 of his judgment, Sen, J. observed that, after police seize goods and documents in execution of a search warrant, those items must normally be produced before the court that issued the warrant, a requirement that is implied by the issuance of a search warrant by a Magistrate for a place within his jurisdiction and is expressly set out in the prescribed forms for search warrants under sections 96 and 98 of the Code of Criminal Procedure. In the appealed judgment, the view expressed by Sinha, J. was preferred. The learned judge referred to the language of section 172 of the Sea Customs Act and contrasted it with the language of section 96 of the Code of Criminal Procedure. He noted that the phrase “wherein the court has reason to believe” does not appear in section 172, and consequently the Magistrate has no discretion to refuse issuance of a search warrant despite the words “may issue” contained in that provision. Nevertheless, he observed that the Magistrate, in granting the warrant, acts judicially and may examine whether the belief relied upon by the Customs officer is genuine or whether any mala‑fide motive exists, although the Magistrate possesses no further discretion beyond those two considerations.

In this judgment, the Court observed that the magistrate’s discretion was limited to two questions: whether the belief in question was genuinely entertained by the Customs Officer and whether any mala fide conduct existed. Apart from these two considerations, the magistrate possessed no further discretion. The Court noted that once the documents were seized, the second paragraph of section 172 of the Sea Customs Act became operative and the magistrate’s responsibility ceased. The Court agreed with the observations of Justice Debrabata Mookerjee that the provisions of the Code of Criminal Procedure did not continue to apply after seizure, and that the subsequent actions of the Customs authorities were independent of the Code. Nevertheless, the Court conceded that the magistrate retained “the ultimate responsibility” and “overall control” over the proceeding. At the same time, the Court emphasized that “immediate control” over the seized goods and documents remained with the Customs authorities, who were not required to produce the items before the magistrate because such production would be pointless if the authorities could not examine the items in their own manner. The Court further held that the requirement that a proceeding be pending before a magistrate as a condition precedent to the issuance of a warrant was no longer relevant after the Privy Council decision in Clarke v. Brojendra Kishore Roy Choudhury. Consequently, the magistrate acquired jurisdiction at the moment an application for a warrant was presented, and the proceedings on that application were deemed to have commenced under the Code. By virtue of the second paragraph of section 172, the provisions of the Criminal Procedure Code were brought into operation, so that the magistrate’s jurisdiction derived both from section 172 of the Sea Customs Act and from the Criminal Procedure Code. Unlike the situation under section 96, the magistrate was required to act on the belief expressed by the Customs authorities, although he could intervene to prevent harassment where it was evident that the belief was not genuinely held or the action was mala fide. The Court clarified that the magistrate was entitled to verify the belief of the Customs officer, but he was not obliged to form an independent belief separate from that of the officer. This verification represented the full extent of the magistrate’s control before the warrant was issued. After issuance, the warrant served as an order authorising the Customs authorities to enter any house or premises; without such an order, entry was unlawful. The warrant therefore functioned as a key that opened the door for entry, and the authority to act derived from the magistrate’s order. The forms prescribed under the Code required that articles seized pursuant to the warrant be produced before the Court. The magistrate who issued the warrant was therefore entitled to ensure that the warrant was not abused and that execution was proper. In appropriate cases, the magistrate could amend the warrant to dispense with the requirement of producing the seized goods or documents before him, but such amendment was permissible only in clear situations.

The Court explained that when a Magistrate wishes, he is not required to modify the prescribed form and may retain personal control over the seized goods or documents. The Magistrate may consider such retention necessary in order to prevent the warrant that he issued from being misused or becoming a tool of harassment. Consequently, a condition contained in the warrant – that the goods or documents be produced before the Magistrate – must be fulfilled. After the items have been produced, the Magistrate alone decides, based on the facts of each case, whether to hand them over to the Customs authorities. In situations where the Customs authorities have acted indiscriminately in making the seizure, the Magistrate may deem it appropriate to examine the goods or documents under his supervision so that items which do not fall within the scope of the Sea Customs Act are not kept for an unduly long time. The expression “ultimate responsibility” and “overall control” quoted in the appealed judgment would be meaningless unless they refer to the authority of the Magistrate that has been discussed. If those terms have any meaning, they denote the Magistrate’s power to ensure that his own warrant is not employed in a manner he did not intend. Section 172, second paragraph, of the Sea Customs Act incorporates the provisions of the Criminal Procedure Code and provides that the warrant shall be executed in the same manner and shall have the same effect as a search warrant issued under the Criminal Procedure Code. The Court distinguished between execution of a warrant, which is one act, and the effect of a warrant, which is another. In addressing the effect, Section 172 intends not only to apply the procedural code but also the specific forms prescribed under it. Therefore, where the form stipulates that the goods or documents must be brought before the Magistrate for his direction, that requirement becomes an essential consequence of the statutory provision. The Court agreed with the view expressed by Justice Sen. On the basis of the foregoing reasoning, the Court held that the Magistrate’s order directing that the nine hundred and fifty‑nine seized documents remain in his custody and be examined in his Court was proper. The Court acknowledged that the seized documents are numerous and that a still larger body of records will need to be examined to determine their relevance. However, the Court noted that this difficulty relates to the detailed scrutiny and inspection of the documents, not to the question of their custody. If problems arise – and the Court expected that they would – such problems could be resolved by prudent action of the Magistrate together with cooperation from the Customs authorities. The Court characterised the issue as one of practical expediency rather than a question of law. Although the Court affirmed that the Magistrate was legally justified in retaining control over the seized documents, it criticised the Magistrate for adopting an unduly narrow approach in providing facilities for inspection and scrutiny. The Court suggested that the Magistrate’s action, while understandable, could have been better calibrated to facilitate a more effective examination of the documents.

The Court observed that the magistrate’s action was somewhat justified when viewed only in light of the extraordinary delay and the leisurely manner in which the inspection of the seized documents had been conducted. Nevertheless, the Court emphasized that even if magistrates wish to expedite matters, they must not impede other Government departments from performing their lawful duties under the relevant statute. On the issue of inspection, counsel representing the Customs authorities spoke openly and cooperatively. He explained that the Customs officials were not interested in retaining physical custody of the seized papers; rather, their primary concern was to carry out a thorough and private examination of the documents because they needed to compare them with other records and to interview witnesses and informers. He further stated that if a dedicated room were provided within the court complex for the Customs officials, and if they were permitted to continue their examination beyond normal court hours, the entire inspection could be completed within three to four months. The counsel also highlighted the many difficulties faced by the Customs department. He pointed out that supervisory personnel were occupied not only with the present case but also with numerous other matters, and that the sheer volume of records requiring review in this case made a reasonable amount of time indispensable. After considering these submissions, the Court concluded that the order of the learned Judge directing the hand‑over of the documents to the Customs authorities should be set aside. While it affirmed that the magistrate was correct in retaining immediate custody of the seized papers, the Court directed that appropriate facilities for inspection be provided to the Customs department. Specifically, the Court ordered that a separate room be made available, equipped with suitable furniture, and that the inspection be permitted to continue beyond ordinary court hours. The inspection must be conducted in the presence of a court official, and the Customs officers must be allowed adequate privacy for questioning witnesses or informers whenever necessary. The Court further stipulated that, once these facilities are granted, a period of four months measured from the date the order reaches the magistrate should be sufficient to complete the examination. Accordingly, the Court set aside the directive to hand over the documents and issued a direction for the disposal of the records in accordance with the provisions outlined above. The direction expressly excluded the 63 documents that the Customs authorities have already agreed to return to the concerned party. The appeal was allowed.