JAGDISH PRASAD SARAOGI VS UNION OF INDIA
1999 P T D 855
[225 I T R 642]
[Gauhati High Court (India)]
Before D. N. Baruah, J
JAGDISH PRASAD SARAOGI and another
Versus
UNION OF INDIA and others
Civil Rule No. 1805 of 1995, decided on 06/01/1997.
Writ---
---- High Court---Jurisdiction---Search and seizure operations carried out by Income-tax Authorities in Delhi on Bank lockers in Delhi---Information about lockers called for by Delhi Authorities---Authorities in Guwahati having no part in instigating search---Writ petition not maintainable in Guwahati High Court---Constitution of India, Art.226---Indian Income Tax Act, 1961, S.132.
The petitioners were residents of Guwahati. In the course of search operations conducted at the residential and business premises of one P.K. Saraogi and R. Saraogi in Guwahati and in Delhi, on the basis of warrant of authorisation under section 132(1) of the Income Tax Act, 1961, the bank locker of R. Saraogi in a bank at Delhi was sealed. The search party sought information from the bank as to whether any other locker in the said bank was being operated in the name of any other Saraogis. On the basis of information supplied by the bank, the petitioners' locker in the said Delhi Bank was sealed and later searched under section 132(3). Several items of jewellery found therein were seized and notices issued to the petitioners under section 132(5). In a writ petition filed in the Guwahati High Court questioning the search and seizure as illegal, the respondents raised a preliminary objection to the maintainability of the petition on the ground of jurisdiction:
Held, dismissing .the petition that though the information regarding the petitioners' locker went from Guwahati, such information could not have been given from Guwahati because the search was carried out at Guwahati in respect of P.K. Saraogi and R. Saraogi and the petitioners were nowhere in the picture. Moreover, the petitioners had averred that they had no connection or nexus with the above Saraogi family. The Income-tax Authorities in Delhi on their own wanted to know about the bank locker of any other Saraogi. There was no such communication from the income-tax Authority at Guwahati. The records did not indicate that there was any instruction from the Income-tax Authority at Guwahati to make search of the petitioners' locker. The cause of action in respect of the search and seizure arose in Delhi. Therefore, no part of the cause of action arose within the territorial jurisdiction of the Guwahati High Court.
R. Gogoi, S. Mitra, R. Goenka and A. Dutta for Petitioners.
G. K. Joshi and U. Bhuyan for Respondents.
JUDGMENT
D. N. BARUAH, J.---By this application under Article 226 of the Constitution of India, the petitioners challenge the search and seizure effected in respect of the bank locker of the petitioners bearing No. 175 (Type-E) in Indraprastha Sahkari Bank Limited, Wazirpur Industrial Area, Delhi, and also the notices, dated April 20, 1995, issued by the Income-tax Officer, Ward-142), Guwahati, purporting to draw up proceedings under section 132(5) of the Income Tax Act, 1961 (for short, "the Act"), against the petitioners and pray for issuance of an appropriate writ or directions.
The facts for the purpose of disposal of this writ petition are:
Both the petitioners are assessees under the Act and are assessed by the third respondent. The petitioners are also assessed under the Wealth Tax Act by the Wealth Tax Officer, Ward-11(2), Guwahati. The petitioners have their permanent residence at Fancy Bazar, Guhawati, and have a temporary residence situated at DE-8, Salimar Bagh, Delhi. The petitioners have to visit Delhi from time to time in connection with their business and in the course of such visits they use the said residence for their temporary stay. The petitioners have a joint residence at Guwahati as well as in Delhi with Sharwan Kumar Saraogi and his wife, Smt. Sashi Saraogi, who are brother and sister-in-law of the first petitioner. The mother of the first petitioner, namely, Smt. Parma Devi Saraogi, also has a common residence with the petitioners.
In the month of March, precisely on 1st/2nd March, 1995, the residential and business premises of one Pradip Kumar Saraogi and his brother, Ratanlal Saraogi, was searched by the respondent authorities at Guwahati as well as in Delhi on the basis of a warrant of authorisation issued by the authority under section 132(1) of the Act. In the course of the said search, the bank locker of Ratanlal Saraogi at Indraprastha Sahkari Bank Limited situated at Wazirpur Industrial Area, New Delhi, was sealed and subsequently searched. The petitioners, on enquiry, found that in course of the said search the search party sought information from the bank authority as to whether any other locker in the said bank was being operated in the name of any other Saraogis. According to the petitioners, on the basis of the information supplied, the second respondent purported to pass a restraint order in respect of the bank locker of the petitioners in the said bank bearing No.175 (Type-E) in purported exercise of the power under section 132(3) of the Act. The petitioners further state that by a communication dated March 4, 1995, the manager of the Indraprastha Sahkari Bank, Wazirpur Branch, informed the petitioners that their aforesaid locker had been sealed by the respondent authority on March 2, 1995, in exercise of the power under section 132(3) of the Act and that no further operation would be permitted in respect of the said locker till the restrictions imposed were withdrawn. The petitioners further state that the fact about the sealing of the locker and actions proposed in respect thereto were intimated to them by the bank manager for the first time and they had no intimation in this regard from the respondent authorities. Later, by communication dated March 16, 1995/March 20, 1995, issued by the second respondent, the petitioners were informed that the bank locker in question would be opened on March 28, 1995, and the petitioners were directed to be present at the time of opening of the said locker. However, the search of the locker was deferred and it was effected on April 10, 1995. In the course of search operations conducted under the supervision of the second respondent, several items of jewellery were recovered from the locker the valuation of which was made on the same date by a Government approved valuer. The seizure list and the valuation report prepared, show a total of 30 items of jewellery valued at Rs.13,92,537 were found in the locker out of which certain items value of which was fixed at Rs.6,26,270 were seized by the second respondent. Subsequently, the third respondent issued identical notices dated April 20, 1995, under section 132(5) of the Act requiring the petitioners to be present in the office of the third respondent on May 17, 1995, for explaining the nature of possession and the source of acquisition of the assets discovered in connection with the search and seizure conducted on April 10, 1995.
The contention of the petitioners is that tile entire jewellery does not belong to them. In fact it belongs to three other persons alongwith the petitioners and an affidavit to this effect was also sworn and filed. The petitioners challenge the aforesaid search and seizure inasmuch as according to the petitioners, the said search and seizure was illegal and contrary to the provisions of law. The petitioners further submit that no warrant of authorisation was issued by the competent authority under section 132(1) of the Act in the name of the petitioners. In the absence of such authorisation, the authority vested with the power to issue such authorisation could not have any occasion to consider the existence of any of the conditions precedent prescribed under sub-clauses (a), (b) and (c) of section 132(1) of the Act as the satisfaction is a condition precedent to exercise the power of search and seizure under section 132(1) or 132(1 A) of the Act. The contention of the petitioner is that the aforesaid search and seizure is ex facie illegal and there was no valid seizure either under subsection (1) or (IA) of section 132 of the Act. The purported proceedings under section 132(5) of the Act sought to be initiated by the third respondent by issuing the impugned Annexures "5" and "6" notices dated April 20, 1995, to the writ petitioner are wholly without jurisdiction and, therefore, the entire search and seizure and consequential proceedings sought to be initiated under section 132(5) of the Act are nothing but abuse of the process of law and, therefore, liable to be set aside and quashed. Hence, the present petition.
I have heard both sides.
Mr. R. Gogoi, learned counsel appearing on behalf of the petitioners, submits that under section 132(1) of the Act, the Authority concerned was required to consider the existing facts in order to arrive at a satisfaction or belief that any of the conditions stipulated under sub-clauses (a), (b) and (c) of section 132(1) of the Act existed. Satisfaction confers jurisdiction to the authorities to make the search and seizure and thereafter to proceed. In the absence of satisfaction or any material for satisfaction, the authority shall not have any jurisdiction to make search and seizure and thereafter to issue notice. In the instant case, according to Mr. Gogoi, there was no authorisation in the name of the petitioners and, therefore, there was no question of consideration and/or arriving at any satisfaction as required by section 132(1) of the Act. As such, the aforesaid search and seizure is illegal, void and liable to be set aside and quashed.
Mr. G. K. Joshi, learned standing counsel appearing on behalf of the Revenue, on the other hand, refutes the submissions of Mr. Gogoi. Mr. loshi submits that the petitioner itself is not maintainable inasmuch as no part of cause of action arose within the territorial jurisdiction of this Court and, therefore, this Court may not exercise its jurisdiction under Article 226 of the Constitution. In respect of the merits, Mr. Joshi submits that there were enough materials before the authorities concerned to arrive at the satisfaction and, therefore, the action of the respondents in making search and seizure and subsequent issuance of notice was fully justified and no interference is called for.
On the rival contentions of the parties, the following two points require determination.
(1) Whether this petition is maintainable and, whether this Court has the jurisdiction to entertain this petition?
(2) Whether the action of the respondents in making the search and seizure and subsequent issuance of notice is justified?
In my opinion, determination of the first point is necessary before entering into the merits of the case. If this Court has no jurisdiction to entertain the petition the question of considering the merits does not arise. Under Article 226(2) of the Constitution, the power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories. Prior to the insertion of clause (1-A), it was held that the writs do not run beyond the territories in relation to which each High Court exercises the jurisdiction. Hence, a High Court could not issue a writ or order under Article 226 unless the person, authority or Government against whom the writ is sought was physically resident or located within the territorial jurisdiction of the High Court. With the insertion of clause (1-A) renumbered as clause (2) by the 42nd Amendment Act, if the cause of action arises, wholly or in part, within the territorial jurisdiction of that High Court, it may issue a writ against a person or authority within the jurisdiction of another High Court. As a result of insertion of clause (2), a petition under Article 226 can be presented before any of the High Courts if the High Court within whose territorial jurisdiction the person or Authority against whom relief is sought resides or situate and if the High Court within whose territorial jurisdiction the cause of action in respect of which relief is sought under Article 226 has arisen. wholly or in part. The meaning of "cause of action" is well understood. It means a bundle of facts which gives rise to a civi11itigation. In that light, let us see whether the cause of action or any part thereof arises within the territorial jurisdiction of this Court.
In the instant case it is now to be seen whether any part of the cause of action arose out of the territorial jurisdiction of this Court. Information was sent from Guwahati by the Income-tax Authority that the Saraogis, namely, Ratan Lal Saraogi and Pradeep Kumar Saraogi, had lockers at Indraprastha Sahkari Bank Ltd., New Delhi. Though information regarding the petitioners' locker went from Guwahati, such information could not have been given from Guwahati because the search was carried out at Guwahati in the Saraogi family of Shri Pradeep Kumar Saraogi and Shri Ratan Lai Saraogi and the petitioners were nowhere in the picture. Moreover, the petitioners have averred that they had no connection or nexus with the above Saraogi family. The petitioners in paragraph 5 of their petition have stated as follows:
"...that in the course of the said search operations the search party sought information from the bank Authority as to whether any other locker in the said bank was being operated in the name of any other Saraogis. Your petitioners understand that on the basis of information supplied, the respondent No.2 purported to pass a restraint order in respect of the bank locker of the petitioners in the said bank bearing No. 175 (Type-E) purportedly, in exercise of the power under section 132(3) of the Act."
These averments clearly indicate that the Income-tax Authority in Delhi on their own wanted to know about the bank locker of any other Saraogi. There was no such communication from the Income-tax Authority at Guwahati and the petitioners themselves have clearly stated that they were in no way connected with Ratan Lai Saraogi and Pradeep Kumar Saraogi. Again, in paragraph 3 of the reply affidavit to the affidavit-in-opposition filed on behalf of the second respondent, the petitioners have stated that they had no connection with the family of Ratan Lal Saraogi and Pradeep Kumar Saraogi. I have also gone through the records placed before me. The record also does not indicate that there was any instruction from the Income-tax Authority at Guwahati to make search of the petitioners' locker. The Income tax Authority in Delhi either by accident or on their own had made the aforesaid search and seizure. The action may be illegal and without jurisdiction but definitely the cause of action in respect of the search and seizure arose in Delhi. Therefore, in my opinion, no part of the cause of action arose within the territorial jurisdiction of this Court. Therefore, this Court does not have any jurisdiction to entertain this application under Article 226 of the Constitution as this is hit by the provisions of Article 226(2). In view of the above, I hold that the petition is not maintainable for want of jurisdiction. The petitioners may file a petition in the appropriate Court. Therefore, the preliminary objection raised by Mr. Joshi is sustained. Accordingly, the petition is dismissed.
C.M.A./1753/FCPetition dismissed.