Union of India (UOI) vs State, Aboobacker, P. Abdul Gafoor and Abdul Basheer

Thomas P. Joseph, J.—The third Respondent is served but there is no response.

This Criminal Miscellaneous Case is filed by the Union of India challenging Annexure-V, common dated August 13, 2008 of learned Judicial First Class Magistrate-I, Sulthan Bathery whereby the request of Petitioner for custody of the currency notes was disallowed and the requests made by Respondents 2 to 4 were allowed.

The Circle Inspector of Police, Pulpally on November 18, 2007 seized Rs. .18 lakhs each from Respondents 2 and 3 and Rs. .20,49,500/- from the fourth Respondent. Seizure of the currency notes was report to the learned Judicial First Class Magistrate-I, Sulthan Bathery. Parties filed petitions before learned Magistrate claiming custody of the currency notes. Learned Magistrate vide the impugned order released the amounts to Respondents 2 to 4 on condition that they executed bond for Rs. .21 lakhs each with two solvent sureties for the like sum each. Learned Standing Counsel for Petitioner contends that in view of Section 132A of the Income Tax Act (for short, "the Act") request of Petitioner for custody of currency notes ought to have been allowed. It is also argued that Respondents 2 to 4 are being assessed by the Department for the tax liable to be paid on the amount seized and at any rate, interest of the Income Tax Department ought to have been protected by the learned Magistrate. Learned Counsel for Respondents 2 and 4 contends that Section 132A of the Act has no application and that the said provision does not affect power of the criminal court to pass appropriate orders under Sections 451, 452 or 457 of the Code of Criminal Procedure (for short, "the Code").

So far as application of Section 132A of the Act is concerned, I am inclined to accept the argument of learned Counsel for Respondents 2 and 4. For, that provision empowers the officers referred to therein to require the officer or authority referred to therein to deliver the books of accounts, assets, etc. to the requisitioning officer. Clauses (a) to (c) do not in any way relate to the court before which currency notes are either produced or its seizure is reported. Hence notwithstanding Section 132A of the Act criminal court has the power to pass appropriate orders under Sections 451, 452 or Section 457 of the Code, as the case may be.

In the present case Petitioner has filed a petition before the learned Magistrate seeking custody of the currency notes u/s 451 of the Code. Certainly it was within the power of learned Magistrate to pass appropriate orders on that petition including allowing the claim of Petitioner.

Learned Magistrate after consideration of the materials has decided to give custody of the currency notes to Respondents 2 to 4 on sufficient security. Having regard to the circumstances stated by learned Counsel I do not find reason to interfere with the discretionary power exercised by the learned Magistrate. At the same time interest of the Income Tax Department is also to be protected. Learned Standing Counsel submits that assessment proceeding are on. Learned Counsel for Respondents 2 and 4 has a contention that Respondents 2 and 4 are already assessed and they have paid the tax and the surcharge. I need not enter into that controversy since that is a matter which the Income Tax Department has to decide. Having regard to the circumstances, what is required is only to protect the interest of the Department.

Resultantly This Criminal Miscellaneous Case is disposed of with a direction that in case Respondents 2 to 4 are assessed by the Income Tax Department (if not already assessed) and any amount is due from Respondents 2 to 4 (in case it is not already paid) it is open to the Income Tax Department to realise such amount from the security offered by Respondents 2 to 4 as ordered by the learned Magistrate. In case sureties of Respondents 2 to 4 are desirous of getting discharge of their property, it is open to them to approach learned Magistrate with appropriate request and in that event, Respondents 2 to 4 shall execute fresh bond with fresh sureties as the learned Magistrate may direct which shall be subject to the right of Income Tax Department as I have stated above.