KANTA BHATNAGAR,J. - (1.) IN this petition under Article 226 of the Constitution of India, petitioners have invoked the extraordinary jurisdiction of this Court for quashing the Orders Annexures 0 and P dated January 1,1988 by which Indian Cur rency Notes amounting to Rs. 72,26,090/ were seized by respondent No. 3, the Assistant Collector of Central Excise and Customs Division, Udaipur under Sub -section (1) of Section 110 of the Customs Act, 1962 (hereinafter to be referred as 'the Act') on the ground that the amount was sale proceeds of smuggled gold.
(2.) IN short, the events disclosed in the writ petition are as under : - That, petitioner No. 1 Satramdas is a silver trader carrying on that business inherited from his forefathers in the market of Udaipur for the last twenty years and is engaged In the forward trading business in silver. Petitioner No. 1 had taken 9.5 lakhs from his brother Manohar Lai on December 19,1987 and an amount of Rs. 1,30,000/ from his mother Ish wari Bai and grandmother Devi Bai each on December 14,1987. He got Rs. 4,00,000/ lakhs by sale of silver belonging to himself and his mother and grandmother. He had earned a sum of about Rs. 56,00,000/ lakhs as profit from business during the year 1987 88. Petitioner No. 1 anticipating rise in silver price and hoping to make further gains, decided to further engage in forward trading of silver on a large scale basis. He, therefore, entrusted the amount so collected by him to petitioner No. 2 Ghanshyam, working with him in the business and asked him, to go to Ahmedabad. Petitioner No. 1 also proceeded for Ahmedabad. Petitioner No. 2 proceeded for Ahmedabad on December 19, 1987 In Truck No. GRU 3396 carying Soap Stone Powder for delivery to some party in Gujarat. When the truck reached Kherwada, it was stopped by the police for routine check. The police not being satisfied by the explanation given by the petitioner No. 2 seized the cur rency notes worth Rs. 72,26,090/ Under Section 102 of the Code of Criminal Procedure and arrested him. When petitioner No. 2 was taken before the Magistrate, he stated that the money belonged to petitioner No. 1. On the information of the Police, Income -tax authorities went to Kherwada and recorded the statement of petitioner No. 2. The Cus toms Authority also recorded the statement of petitioner No. 2. Petitioner No. 2 was released on bail by the Magistrate (Judicial) Kherwada on December 21,1987. Respon dent No. 3 issued summons purported Under Section 108 of the Act requiring petitioner No. 2 to remain present before him on December 30,1987 at 10.00 a.m. to give evidence on matters concerning the inquiry pertaining to seizure of Indian Currency Notes seized by the police on December 19,1987. The Income -tax Officer, 'B' Ward, Udaipur passed an order Under Section 32(3) of the Income -tax Act, 1961 prohibiting the removal of the amount seized by the police. On the application Under Section 438 of the Code of Criminal Procedure, the petitioners and two brothers of the petitioner No. 1 were granted anticipatory bail by the Sessions Judge, Udaipur. On January 1,1988, respondent No. 3 passed an order Under Section 110(1) of the Act purported to seize the Indian Currency Notes seized by the police earlier on December 19/20,1987. On January 2,1988, the Assistant Collector of Central Excise and Customs, Udaipur, filed an application Under Section 135 of the Act read with Sections 110 and 121 thereof stating therein that the currency notes valued at Rs. 72,26,090/ and seized by the police were found upon inquiry by the applicant to be sale proceeds of smuggled gold and were liable to confication Under Section 121 and therefore a seizure order had been passed and the police -officer, Kherwada were directed to hand over the said amount to the Customs Authorities but the police authorities having not done so. the learned Magistrate should direct the police authorities to do so. The Chief Judicial Magistrate (Economic Offences) Rajasthan, Jaipur, directed S.H.O. Kherwada not to hand over the amount seized by him to any person as the enquiry in respect of the said amount was pending under the Cus toms Act as well as under the Gold Control Act. On December 22, 1987, application Under Section 451 of the Code of Criminal Procedure was moved by the petitioner No. 2, praying there in that the currency notes seized by the police may be released from police custody and be handed over to him. The ill -treatment of the police and Customs authorities during the course of interrogation was also complained of on January 4, 1988. Respondent No. 3 also moved an application Under Section 452 and 457 of the Code of Criminal Procedure in the Court of Judicial Magistrate Kherwada and prayed that the amount may be handed over to him. Both the applications are pending. In the writ petition, the details of the Bank Accounts of the brother, mother and grandmother of petitioner No. 1, the income by sale of silver belonging to the family and the profits in the year 1987 -88 along with the Bank Certificates for the withdrawal of the money by the brother, mother and grandmother of petitioner No. 1 have also been given. The assessment for the taxable income for the year 1987 -88,1988 -89 being Rs. 50,00,000/ and the liability of petitioner No. 1 under the Income Tax Act for the said years being Rs. 26,03,250/ have also been stated. It has also been stated that the Income -tax Authorities and the Customs Authorities had recorded the statement of petitioner No. 2 under duress and coercion and had not supplied the copies of the statements of the petitioners to them. The Orders Annexures 0 and P purported to be pased Under Section 110 of the Act have been chal lenged on a number of grounds. It has been stated that the amount was in possession of the police and therefore, could not have been seized by the proper officer Under Section 110 of the Act. That, the order was without jurisdiction and there was no material for respondents to have a reasonable belief that the amount was sale proceeds of smuggled goods. That, the ingredients of Section 121 of the Act for confiscation of sale proceeds of smuggled goods not being there, the amount was not liable to confiscation under that Section. That, despite there being proper accounting of the money seized, respondent No. 3 without any investigation or application of mind has passed the impugned Orders simply because the currency notes in question had been seized by the police. That, the impugned Orders are unconstitutional and violative of Articles 14, 19(1)(g) and 300A of the Constitution of India and are liable to be set aside. The petitioners have prayed for quashing of Annexures 0 and P and for an order or direction prohibiting respondents, their servants and agents from proceeding further in pursuance of the impugned orders dated January 1, 1988. It has also been prayed that the respondents No. 2 and 3 be restrained from acting under the provisions of the Act in respect of currency notes retained by the police and lying with the S.H.O., Kherwada.
(3.) IN the written reply filed on behalf of respondent Nos. 1 to 3, it has been stated that the Assistant Collector Customs, Udaipur had reason to believe that the currency worth Rs. 72,26,090/ were the sale proceeds of contraband/smuggled gold and were li able to confiscation Under Section 121 of the Act and as such the amount was rightly seized Under Section 110 of the Act. That, the impugned Orders of seizure have been passed strictly in accordance with the provisions of the Customs Act. The issuance of the notice Under Section 108 of the Act for recording of the statements of the witnesses has been admitted but the allegation about coercion and duress in recording the statement has been denied. That, it was after due application of mind and material being available that the impugned orders were passed. That, the currency notes were being carried clandestinely in Truck No. GRU 3396 by petitioner No. 2 and the amount was recovered concealed under soap stone bags. That, the impugned orders were neither unconstitutional nor violative of any article of the Con stitution. The writ petition has been prayed to be dismissed on the ground of alternative remedy being available to the petitioners.;