Writ petition — Even if small fraction of cause of action accrued within the territories of a State, the High Court of that State will have jurisdiction

Investigation — When the bona fides of a passenger carrying
an unusually large sum, and his claims regarding the source and legitimacy have
to be verified, some delay and inconvenience is inevitable. The inspection and
investigating officers have to make sure that the money was not intended for any
illegal purpose. In such a situation, the rights of the passenger will have to
yield to public interest. Any bona fide measures taken in public interest, and
to provide public safety or to prevent circulation of black money, cannot be
objected to as interference with the personal liberty or freedom of a citizen.

The appellant, a computer engineer, who was lucratively
employed in the United States of America for more than ten years, returned to
India with his earnings and took up employment in Hyderabad in the year 2006. He
wanted to buy a property at Chennai. But his attempts were not fruitful. He was
advised that if he wanted to buy a good plot, he must be ready to pay
considerable part of the sale price in cash as advance to the prospective
seller. When the appellant ultimately identified a prospective seller, he wanted
to go to Chennai with a large sum and finalise the deal. He contacted the
Reserve Bank of India, ICICI Bank (his banker) and the airport authority to find
out whether he could carry a large sum of money in cash while travelling. He was
informed that there was no prohibition. Thereafter, he drew Rs.65 lakhs from his
bank. He travelled by air from Hyderabad to Chennai on June 15, 2007, carrying
the said cash. At the Hyderabad airport, he disclosed to the security personnel
who checked his baggage that he was carrying cash of Rs.65 lakhs along with a
bank certificate certifying the source and withdrawals. After the contents of
his bags were examined by the security personnel, he was allowed to board the
aircraft without any objection. But when the flight reached Chennai, some police
officers and others (who were later identified as officers of the Income-tax
Investigation Wing) rushed in, and loudly called out the name of the appellant.
When the appellant identified himself, he was virtually pulled from the aircraft
and taken to an office in the first floor of the airport. He was questioned
there about the money he was carrying. The appellant showed them the cash and
the bank certificate evidencing the withdrawals and explained as to how the
amounts formed part of his legitimate declared earnings which were drawn from
his bank’s account. He also explained to them the purpose of carrying such huge
amount. The officers recorded his statement. After a few hours, the second
respondent came in and asked the appellant to sign some papers without allowing
him to read them and without furnishing him copies. It became obvious to the
appellant that the officers of the Income-tax Department were suspecting him of
carrying the money illegally. They even attempted to coerce him to admit that
the amount was being carried by him for some illegal purpose. Having failed,
they seized the entire amount under a mahazar, gave him a receipt and permitted
him to leave. In this process, he was detained for about 15 hours without any
justifiable reason. To add insult to the injury, the Tax Intelligence Officers
prematurely and hurriedly informed the newspapers that they had made a big haul
of Rs.65 lakhs in cash, making it appear as though the appellant was illegally
and clandestinely carrying the said amount, and they had successfully caught him
while he was at it. The next day all three leading Tamil newspapers (Daily
Thanthi, Dinamalar, Dinamani) as also an English daily — The Hindu, prominently
carried the news of the seizure from him. The news reports disclosed his name,
profession, his native place in Tamil Nadu, his place of employment. The news
report also stated that he was not able to satisfactorily explain the source of
the amount and that the officials had found discrepancies between what was drawn
by him from the bank and what he was carrying. Ultimately, two months later,
after completing the investigation and verification, as nothing was found to be
amiss or irregular, the seized money was returned to him, but without any
interest.

The appellant filed a writ petition before the High Court
listing the following four acts on the part of the income-tax officials as
objectionable and violative of his fundamental rights : (i) his illegal
detention for more than 15 hours at the Chennai airport; (ii) illegal seizure of
the cash carried by him despite his explanation about the source and legitimacy
of the funds with supporting documents; (iii) failure to return the seized
amount for more than two months without any justification; and (iv) prematurely
and maliciously disclosing to the media a completely false picture of the
incident. The said acts, according to him, tarnished his reputation among his
friends, relatives and acquaintances, by being dubbed as some sort of a
criminal. The said writ petition was dismissed by the High Court on the ground
that no part of the cause of action arose within Andhra Pradesh.

On appeal, the Supreme Court held that the High Court did not
examine whether any part of cause of action arose in Andhra Pradesh. Clause (2)
of Article 226 makes it clear that the High Court exercising jurisdiction in
relation to the territories within which the cause of action arises wholly or in
part, will have jurisdiction. This would mean that even if a small fraction of
the cause of action (that bundle of facts which gives a petitioner, a right to
sue) accrued within the territories of Andhra Pradesh, the High Court of that
State will have jurisdiction. In this case, the genesis for the entire episode
of search, seizure and detention was the action of the security/intelligence
officials at Hyderabad airport (in Andhra Pradesh), who having inspected the
cash carried by him, alerted their counterparts at the Chennai airport that the
appellant was carrying a huge sum of money, and required to be intercepted and
questioned. A part of the cause of action, therefore, clearly arose in
Hyderabad. The Supreme Court also noticed that the consequential income-tax
proceedings against the appellant, which he challenged in the writ petition,
were also initiated at Hyderabad. Therefore, according to the Supreme Court the
writ petition ought not to have been rejected on the ground of want of
jurisdiction.

Considering the facts of the case, the Supreme Court
requested Mr. Gopal Subramanium, the learned Solicitor General to take notice
and suggest a solution. He agreed to have the matter examined as to whether
there was a need for issue of guidelines. Taking note of the issue, the Central
Board of Direct Taxes, Ministry of Finance issued a Circular dated November 18,
2009, setting out the guidelines to be followed by Air Intelligence Units or
Investigation Units while dealing with air passengers with valuables at the
airports of embarkation or destination, to avoid any undue convenience to them.