Impounding of passport - Impact of Hon'ble SC Judgement

I. Case Law on impounding of passport in Criminal Proceedings

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Recently, the Hon’ble SC in the above case has decided that CBI has no authority to retain or impound the passport of the appellant / petitioner. In this case, the passport of the appellant/ petitioner as well as other documents were seized / impounded by the respondent CBI in a search conducted pursuant to an F.I.R. as also the powers conferred under Section 102 read with Sections 165 and 104 of Code of Criminal Procedure (Cr.P.C.). Upon application by the appellant / petitioner, the learned Special Judge CBI, directed the release of the passport to the appellant by imposing upon the appellant/ petitioner certain conditions. In a Criminal Revision filed by CBI, the Hon’ble High Court reversed the order of learned Special Judge. The matter went into appeal before Hon’ble SC.

While deciding the case in favour of the appellant / petitioner, the Hon’ble SC has held that the police may have power to seize a passport under Section 102 Cr.P.C. if it is permissible within the authority given under Section 102 of Cr.P.C., it does not have power to retain or impound the same, because that can only be done by the passport authority under Section 10(3) of the Passports Act. Hence, if the police seizes a passport under Section 102 of Cr.P.C., the police must send it along with a letter to the passport authority clearly stating that the seized passport deserves to be impounded for one of the reasons mentioned in Section 10(3) of the Act. It is thereafter the passport authority to decide whether to impound the passport or not. Since in the instant case, neither the passport authority passed any order of impounding nor was any opportunity of hearing given to the appellant by the passport authority for impounding the document and therefore retention / impounding of passport was illegal. Referring to Section 102(1) of Cr.P.C. which provides the powers of police officer to seize certain property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence, the Hon’ble SC made a clear distinction between seizing of a document and impounding a document. A seizure is made at a particular moment when a person or authority takes into his possession some property which was earlier not in his possession. Thus, seizure is done at a particular moment of time. However, if after seizing of a property or document the said property or document is retained for some period of time, then such retention amounts to impounding of the property/or document.

The Hon’ble SC has further opined that the Passports Act, 1967 being a specific Act whereas Section 104 of Cr.P.C. is a general provision for impounding any document or thing, it shall prevail over that Section in the Cr.P.C. as regards the passport. Thus, by necessary implication, impounding of a passport cannot be done by the Court under Section 104 Cr.P.C. though it can impound any other document or thing.While delivering the judgment in the above case, the Hon’ble SC referred it earlier decisions in Maneka Gandhi Vs. Union of India and another (1978) 1 SCC 248 wherein the passport of Maneka Gandhi was impounded 'in public interest' by an order dated July 2, 1977, and the Government of India declined 'in the interests of the general public' to furnish the reasons. The validity of the said order was challenged. The 7-Judge Bench of Hon’ble SC has held that 'personal liberty' within the meaning of Article 21 includes within its ambit the right to go abroad and consequently no person can be deprived of this right except according to procedure prescribed by law.

In the matter of Union of India (UOI) and Ors.Vs. Smt. Charanjit Kaur - AIR 1987 SC 1057, wherein the passport of Smt. Charanjit Kaur wife of Dr. Jagjit Singh Chauhan,' the Self-styled President of the so-called National Council of Khalistan', was impounded by the Regional Passport Officer, Delhi by an order dated August 18, 1984 and the reasons for the order were not furnished to her "in view of the grave nature of her activities and serious implications in terms of sovereignty, integrity of India and also the security of India" in terms of the provisions the Passport Act, 1967. Distinguishing the instant case with Maneka Gandhi, the Hon’ble SC had held that If the Regional Passport Officer has sufficient material on record to show that she was likely to indulge in a manner detrimental to the sovereignty and integrity of India and the security of India, the order impounding the respondent's passport was justified and it was not merely on the sole circumstance that she is the wife of Dr. Jagjit Singh Chauhan.

Thus from the above judgments, it can be inferred that unless the circumstances as arisen in Smt. Charanjit Kaur’s case or the proper procedure as laid down under the Passport Act is followed for impounding of passport by the Passport Authorities, the passport can not be impounded by the police authorities or by the court under Sec. 104 of Cr.PC.

The issue pertaining to impounding of passport is very much relevant for Banks/FIs as far as recovery of the dues is concerned. Often, the promoter / guarantor misappropriate / misutilise the funds and / or abandon the project and tries to leave / fled India so as to escape the recovery proceedings initiated by the lender before Debt Recovery Tribunal (DRT) or Civil court against him. The recovery proceedings, being civil in nature, and there being no provision in DRT Act / Code of Civil procedure for impounding of passport in civil cases, it becomes difficult for the lender to prove and satisfy DRT / Court the attending circumstances under which the impounding of passport of the promoter / guarantor has been sought for.

As regards impounding of passport in recovery proceedings before DRT /Court, we have across the judgments delivered by Hon’ble Kerala High Courts in which the High Court has justified the action of the Recovery Officer of DRT in impounding of passport of the promoter / defaulter. In Annai Jayabharathi Vs. Debt Recovery Tribunal- AIR 2005 Ker 137, after having considered the judgment of Hon’ble SC in Maneka Gandhi’ case (Supra) as also in Hon’ble Karnataka HC judgment in ICICI Ltd. v. Passport Officer, Bangalore - AIR 2002 Kar.118 (2), the Kerala HC observed that two conditions may have to be satisfied to sustain the order of impounding of passport passed by the DRT, namely, (1) whether the DRT has got power to impound the passport; and (2) whether such an order comes within the ambit of Section 10(h) of the Passport Act, 1967. If the answer to the both questions is found to be in the affirmative, then only the order of the DRT can sustain, as, otherwise, the order has to be set aside. Agreeing with the action of DRT in impounding the passport of the defaulter, the Hon’ble Kerala HC further opined that "under Section 25 of the Act, decree passed by the DRT can be enforced by (i) attachment and sale of movable or immovable property of the judgment debtor ; (ii) arrest of the judgment debtor and his retention in prison; and (iii) appointing Receiver for the Management of the movable or immovable properties of the judgment debtor. But, what happens if the judgment debtor escapes from the country in order to evade and defeat the decree? Is the DRT so powerless to do anything is the question. If a power is given to arrest the judgment debtor and to detain him in prison for enforcing the realisation of a debt ordered to be paid in decree by issuance or a Certificate under Section 19(7) of the Act, it carries with it an incidental power to prevent a person from going abroad, as an interim measure, so as to give effect to the power of ordering arrest of the judgment debtor and his detention in prison conferred by Section 25(b) of the Act. Otherwise, the said provision becomes redundant and otiose". In the context of Section 110(3) of The Customs Act, 1962, the Hon’ble Kerala High Court in Devadasan Dayalal Vs Collector of Customs and Central Excise and Ors.1986 (26) ELT 728 (Ker) has held that the Passport is a "Document" and can be seized by a proper officer in terms of Section 110(3) of The Customs Act, 1962.

After taking into consideration the ratio laid down by Hon’ble SC in Maneka Gandhi Case ( Supra) and application thereof in Smt. Charanjit Kaur’s case, a clear distinction can be made as regards impounding of passport by a recovery officer of DRT in execution proceedings. The Hon’ble Kerala High Court in Annai Jayabharathi Vs. Debt Recovery Tribunal- AIR 2005 Ker 137 has differed from the Karnataka High Court judgment in ICICI Ltd. Vs Passport Officer, Banglore - AIR 2002 Kar.118 (2) observing that since the Karnataka High court has not dealt the issues raised in the case before Hon’ble Kerala High Court.

In order to effectively avail the remedy of the impounding of passport in recovery proceedings before DRT / Court and to maximise the recovery of the debt, the ration laid down by Hon’ble Kerala High Court in Annai Jayabharathi Vs. Debt Recovery Tribunal- AIR 2005 Ker 137 would be of great help. In terms of Section 29 of the DRT Act, provisions of the II and III Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962, have been made applicable. Under Clause 75 of Schedule II of the Income tax Act, interim detention can be ordered pending enquiry relating to final detention in jail for recovery of the amount determined under the Income-tax Act. Further, Section 34 of DRT Act gives overriding effect over other enactments and Section 36 confers rule making power by virtue of which the Debts Recovery Tribunal (Procedure) Rules, 1993 have been framed. Rule 8 of the DRT Rules empowers the DRT to make such orders and to give such directions as may be necessary or expedient to give effect to its orders or to prevent a use of its process or to secure the ends of justice. The provisions can be effectively argued by the dealing advocate in seeking the desired relief thereby enhancing the chances of recovery of dues from the borrowers / guarantors.

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