IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT TUESDAY, THE 21ST OCTOBER 2008 / 29TH ASWINA 1930 Crl.MC.No. 1990 of 2008(A) -------------------------- CRRP.29/2007 of ADDL.SESSIONS COURT-II, KOZHIKODE .................... PETITIONER(S): --------------- DHANESH KUMAR C.TOGANIA S/O. CHANGHANALA, PROPRIETOR, C.V.GOLD 20, IST BHOIVADA, IST FLOOR, BHULESHWAR, MUMBAI. BY ADV. SRI.SUNNY MATHEW RESPONDENT(S): --------------- 1. SRI. K. KOYA, S/O. MUHAMMED ASSISTANT DIRECTOR OF INCOME TAX (INV) P.K. COMMERCIAL COMPLEX, R.C. ROAD, KOZHIKODE. 2. MAHENDRA SINGH ASOLIYA S/O. RAM SINGH, RESIDING AT TRIVENI COTTAGE OPP. KANAKASREE KALYANA MANDAPAM, NEAR SREEKANTESWARA TEMPLE, CALICUT. 3. STATE OF KERALA, THROUGH THE CIRCLE INSPECTOR OF POLICE, NADAKKAVE POLICE STATION REPRESENTED BY THE PUBLIC PROSECUTOR HIGH COURT OF KERALA, ERNAKULAM. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) FOR R1 SRI.JOSE JOSEPH, SC, FOR INCOME TAX FOR R1 THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 21/10/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: R. BASANT, J. ------------------------------------------------- Crl.M.C. No. 1990 of 2008 ------------------------------------------------- Dated this the 21st day of October, 2008 ORDER The petitioner has come to this Court aggrieved by the common order passed by the Court of Session in three revision petitions. 2. On 9/11/06 the Circle Inspector of Police, Nadakkave Police Station, Kozhikode, conducted a raid in the residential premises of the 2nd respondent. The police officer conducted such raid in connection with the investigation in Crime No.369/06 of that Police Station registered under Sec.395 IPC. An amount of Rs.8,14,450/- and gold ornaments weighing 2619.480 grams were seized from the premises of the 2nd respondent. The said currency and the gold ornaments were produced before the learned Magistrate. In the course of investigation, the police were satisfied that the said amount of Crl.M.C. No. 1990 of 2008 -: 2 :- money and the gold ornaments were in no way connected with Crime No.369/06. Thus, no one now has a case that the currency and the gold ornaments seized have anything to do with Crime No.369/06. 3. Seizure of the currency and the gold ornaments was reported to the Income Tax Department. The Income Tax Department filed an application for release of the currency and the gold ornaments. The petitioner also filed an application for release of those articles in his favour. The learned Magistrate by a common order came to the conclusion that the currency and the gold ornaments do belong to the petitioner herein. The 2nd respondent is said to be an agent of the petitioner. Cash and the gold ornaments, it was asserted, were handed over by the petitioner to his agent/the 2nd respondent. The learned Magistrate accepted the said contention and directed release of the gold ornaments seized to the police; but the cash was directed to be released to the Income Tax department. The court further took note of the fact that the Income Tax department had reported that the tax liability in respect of those articles – currency and gold ornaments, would be about Rs.10 lakhs, if the same represented unaccounted money and property. The learned Magistrate while directing release of the gold Crl.M.C. No. 1990 of 2008 -: 3 :- ornaments to the petitioner, imposed a condition that a bank guarantee of Rs.2 lakhs must be furnished by the petitioner to secure release of the gold ornaments. 4. The learned Magistrate appears to have worked out this amount of Rs.2 lakhs by taking note of the fact that an amount of about Rs.8 lakhs is already available in court. The same was directed to be retained in deposit until the completion of the assessment took place. 5. The Income Tax department as well as the petitioner preferred revision petitions against the order passed by the learned Magistrate. By the impugned order, all the three revision petitions – two filed by the department and one by the petitioner, were dismissed. 6. A second revision petition is not maintainable and that explains why the petitioner has come to this Court with this petition under Sec.482 Cr.P.C. The learned counsel for the petitioner submits that the court below had grossly erred in not releasing the cash seized from the 2nd respondent to the petitioner. The court below had further erred in insisting on bank guarantee for Rs.2 lakhs, it is further contended. 7. The crux of the contention is that as it is revealed that no crime whatsoever has been committed in respect of the Crl.M.C. No. 1990 of 2008 -: 4 :- article seized, they should have been released unconditionally to the petitioner. It is hence prayed that the impugned directions passed by the learned Magistrate and upheld by the court of revision may be suitably modified. The learned counsel for the petitioner contends that the petitioner is an income tax assessee. The petitioner owns that the cash and the gold ornaments do belong to him. In these circumstances, there is no necessity to insist on any bank guarantee for the release of the gold ornaments to the petitioner or to insist that the cash must remain in the court's custody until the assessment is finalised. 8. The learned counsel for the Income Tax Department, on the contrary, contends that the department does not accept the assertion at the moment that the cash and the gold ornaments do belong to the petitioner. According to the department, the 2nd respondent has not made an assertion before them that these articles and cash belong to the petitioner, though a finding to that effect is entered by the learned Magistrate in the impugned order. The learned counsel for the Income Tax department contends that the assessment proceedings for undisclosed wealth and property will have to be initiated against the petitioner and/or the 2nd respondent. The learned counsel submits that as expeditiously as possible such proceedings shall Crl.M.C. No. 1990 of 2008 -: 5 :- be completed. Depending on the order passed in such proceedings, further orders can be passed by the learned Magistrate. It is not necessary now to modify the impugned order upheld by the Sessions Court by invoking the jurisdiction under Sec.482 Cr.P.C. 9. The learned counsel for the petitioner submits in response to a specific query by this Court that the petitioner shall furnish bank guarantee for the entire amount of Rs.10,00,000/- which may be leviable by the Income Tax department, if ultimately at the end of the proceedings against the petitioner herein and/or the second respondent the same were found to be payable by way of income tax dues. It is submitted that for an amount of Rs.2,00,000/- already bank guarantee has been produced. It is submitted that the petitioner shall offer a bank guarantee for the balance amount of Rs.8,00,000/- also if the court so directs. 10. Having considered all the relevant circumstances, I am satisfied that such a direction shall satisfy the interests of justice eminently. There is no contention that cash and gold ornaments are involved in the commission of any offence. If the cash and the gold ornaments are really unaccounted wealth, all that can happen is that the Income Tax department may demand an Crl.M.C. No. 1990 of 2008 -: 6 :- amount of Rs.10,00,000/- from the petitioner and/or the second respondent. If the interests of Income Tax department to recover that amount is secured, I find no reason why the amount should not be released to the petitioner herein. The second respondent has already been served. He has staked no claim for the release of the amount also before this Court or before the court below. 11. In the result, a) This petition is allowed. b) The impugned orders are modified. c) It is directed that the entire cash and ornaments seized by the police and produced in court in this case shall be released to the petitioner on condition that he executes (i) a bond for Rs.10,00,000/- (Rupees ten lakhs only) undertaking to make the said amount available to the court or the Income Tax authorities as and when directed by the court for discharge of income tax liability of himself and/or the 2nd respondent in respect of such cash and ornaments released to him. (ii) he produces bank guarantee from any nationalised bank for such amount of Rs.10,00,000/- (Rupees ten lakhs only) Crl.M.C. No. 1990 of 2008 -: 7 :- in all (less bank guarantee, if any, already furnished) to the satisfaction of the learned Magistrate. Sd/- (R. BASANT, JUDGE) Nan/ //true copy// P.S. to Judge