STATE OF WEST BENGAL Vs. SWAPAN KUMAR GUHA:SANCHAITA INVESTMENTS
SUPREME COURT OF INDIA (FROM: CALCUTTA)
STATE OF WEST BENGAL
SWAPAN KUMAR GUHA,SANCHAITA INVESTMENTS
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(1.) My learned Brother A. N. Sen has dealt fully with the various points argued before us. I agree respectfully with his judgment, but desire to add a few words in view of the importance which this matter has acquired by reason of the immense circulation of 'black money' clearly and almost concededly involved in the affairs of the firm which is facing a prosecution.
(2.) These appeals by special leave arise out of the judgment dated March 5, 1981 of a learned single Judge of the Calcutta High. Court in Matters Nos. 2829 of 1980 and 37 of 1981 : (reported in AIR 1981 Cal 157). The appeals are, in substance, by the State of West Bengal while the contesting respondents are a firm called 'Sanchaita Investments' and its three partners, Swapan Kumar Guha, Sambhu Prasad Mukherjee and Beharilal Murarka. The two Matters in the Calcutta High Court were in the nature of writ petitions under Article 226 of the Constitution which were filed by the firm and its partners for quashing an investigation commenced against the firm. Allowing the writ petitions, the High Court issued a writ of Mandamus directing the State Government and its concerned officers to "forthwith recall, cancel and withdraw the First Information Report ............ and all proceedings taken on the basis thereof", since the searches, seizures and arrests made in pursuance of the said F.I.R. are, according to the High Court, illegal and without jurisdiction. It has directed that the books, documents and moneys seized during the search be returned to the firm and its partners, including a sum of Rs. 52,11,930.
(3.) The short question for consideration in these appeals by special leave is whether the F.I.R. lodged by the Commercial Tax Officer, Bureau of Investigation, against the firm and its partners discloses an offence under S. 3 of "The Prize Chits and Money Circulation Schemes (Banning) Act", 43 of 1978. The Act, which was passed by the Parliament, came into force on Dec. 13, 1978 and the two years' period allowed by S. 12 for winding up every kind of business relating to Prize Chits and Money Circulation Schemes expired on Dec. 12, 1980. The F.I.R., which was lodged the next day on Dec. 13, reads thus :
The Deputy Superintendent of Police,
Bureau of Investigation.
10, Madan Street,
On a secret information that 'Sanchaita Investments' of 5-6, Fancy Lane, Calcutta, is carrying on business or promoting and/or conducting prize chit and/or money circulation 'scheme enrolling members of such chit and/or scheme, participating in those, and/or receiving and remitting monies in pursuance of such chits and/or scheme in violation of the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, inquiry was held secretly to verify correctness or otherwise of the aforesaid secret information. Enquiry reveals that the said Sanchaita Investments' is a partnership firm, partners being Shri Bihari Prasad Murarka, Shri Sambhu Mukherjee and Shri Swapan Kumar Guha and that it was floated in or around 1975. Enquiry further reveals that the said firm had been offering fabulous interest @ 48% per annum to its members, until very
recently. The rate of interest has of late been reduced to 36% per annum. Such high rates of interest were and are being paid even-though the loan certificate receipts show the rate of interest to be 12% only. Thus, the amount in excess of 12% so paid clearly shows that the 'Money Circulation Scheme' is being promoted and conducted for the making of quick and/or easy money. Prizes and/or gifts in cash were and are also awarded to agents, promoters and members too.
In view of the above, Sarvashri Bihari Prasad Murarka. Sambhu Mukherjee and Swapan Kumar Guha appear to have been carrying on business in the trade name of 'Sanchaita Investments' in prize chits and money circulation scheme in violation of S. 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and are therefore, punishable under S. 4 of the said Act. Necessary action may therefore, be kindly taken against the aforesaid offenders along with other accomplices as provided in the law.
Commercial Tax Officers,
Bureau of Investigation.;
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