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CASE NO.:

Appeal (civil) 6350-6374 of 1997

PETITIONER:

Distt. Registrar & Collector, Hyderabad & Anr.

RESPONDENT:

Canara Bank Etc.

DATE OF JUDGMENT: 01/11/2004

BENCH:

CJI R.C. Lahoti & Ashok Bhan

JUDGMENT:

J U D G M E N T

WITH

C.A\005\005\005\005/2004 (Arising out of SLP (C) No. 11607/2001)

R.C. Lahoti, CJI.

Leave granted in SLP (C) No. 11607/2001.

Section 73 of the Indian Stamp Act, 1899 as incorporated by

Andhra Pradesh Act No. 17 of 1986, by amending the Central Act in its

application to the State, has been struck down by the High Court of

Andhra Pradesh as ultra vires the provisions of the Indian Stamp Act

as also of Article 14 of the Constitution. The District Registrar and

Collector, Registration and Stamps Department, Hyderabad and the

Assistant Registrar have come up in appeal by special leave.

Relevant Statutory Provisions under the Central Act :

Section 73 of the Indian Stamp Act (before the insertion of the

text under the impugned State Legislation in its applicability to the

State of Andhra Pradesh) reads as under:-

"73. Every public officer having in

his custody any registers, books, records,

papers, documents or proceedings, the

inspection whereof may tend to secure any

duty, or to prove or lead to the discovery of

any fraud or omission in relation to any duty,

shall at all reasonable times permit any

person authorized in writing by the Collector

to inspect for such purpose the registers,

books, papers, documents and proceedings,

and to take such notes and extracts as he

may deem necessary, without fee or

charge."

The term 'public officer' is not defined in Section 73 nor in the

interpretation clause. However, the term 'public office' is found to

have been used in Section 33. Sub-Section(3) of Section 33 provides

as under:-

"33. (3) For the purposes of this section,

in cases of doubt ___

(a) the State Government may determine

what offices shall be deemed to be public offices;

and

(b) the State Government may determine

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who shall be deemed to be persons in charge of

public offices."

The term 'public officer having in his custody any registers etc.' as

occurring in Section 73 can be defined by having regard to the

expression 'public office' as occurring in Section 33. The central

legislation including Section 73 took care to see that the power to

inspect was confined only to documents in the custody of public officer

which documents would necessarily be either public documents or

public record of private documents. The purpose of inspection is

clearly defined. It is permissible to have inspection carried out only in

these circumstances:- (i) when it may tend to secure any duty, or (ii)

when it may tend to prove any fraud or omission in relation to any

duty, and (iii) when it may tend to lead to the discovery of any fraud

or omission in relation any duty.

The State Amendments (1986)

The A.P. Act No.17 of 1986 has amended the Indian Stamp Act,

1899 in its application to the State of Andhra Pradesh. The Act was

reserved by the Government of A.P. on 24th April, 1986 for the

consideration and assent of the President and received such assent on

17th July, 1986 which was published in the Andhra Pradesh gazette for

general information on 22nd July, 1986. Out of the several

amendments made by the A.P. Act 17 of 1986, the relevant one for

our purpose is Section 73 as substituted in place of the original Section

73 of the Indian Stamp Act by Section 6 of A.P. Act No.17 of 1986.

The same is reproduced hereunder:-

6. For section 73, of the principal

Act, the following section shall be

substituted, namely:-

73 (1) Every public officer or any

person having in his custody any registers,

books, records, papers, documents or

proceedings, the inspection whereof may

attend to secure any duty, or to prove or

lead to the discovery of any fraud or

omission in relation to any duty, shall at all

reasonable times permit any person

authorized in writing by the Collector to

enter upon any premises and to inspect for

such purposes the registers, books, records,

papers, documents and proceedings, and to

take such notes and extracts as he may

deem necessary, without fee or charge and if

necessary to seize them and impound the

same under proper acknowledgement:

Provided that such seizure of any

registers, books, records, papers, documents

or other proceedings, in the custody of any

Bank be made only after a notice of thirty

days to make good the deficit stamp duty is

given.

Explanation : - For the purposes of

this proviso 'bank' means a banking

company as defined in section 5 of the

Banking Regulation Act, 1949 and includes

the State Bank of India, constituted by the

State Bank of India Act, 1955 a subsidiary

bank as defined in the State Bank of India

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(Subsidiary Banks) Act, 1959, a

corresponding new bank as defined in the

Banking Companies (Acquisition and Transfer

of Undertaking) Act, 1970 and in the

Banking Companies (Acquisition and Transfer

of Undertakings) Act, 1980, a Regional Rural

Bank established under the Regional Rural

Banks Act, 1976, the Industrial Development

Bank of India established under the

Industrial Development Bank of India Act,

1964, National Bank for Agriculture and

Rural Development established under the

National Bank for Agriculture and Rural

Development Act, 1981, the Life Insurance

Corporation of India established under the

Life Insurance Corporation Act, 1956, The

Industrial Finance Corporation of India

established under the Industrial Finance

Corporation Act, 1948, and such other

financial or banking institution owned,

controlled or managed by a State

Government or the Central Government, as

may be notified in this behalf by the

Government.

(2) Every person having in his

custody or maintaining such registers,

books, records, papers, documents or

proceedings shall, when so required by the

officer authorized under sub-section (1),

produce them before such officer and at all

reasonable times permit such officer to

inspect them and take such notes and

extracts as he may deem necessary.

(3) If, upon such inspection, the

person so authorized is of opinion that any

instrument is chargeable with duty and is not

duly stamped, he shall require the payment

of the proper duty or the amount required to

make up the same from the person liable to

pay the stamp duty; and in case of default

the amount of the duty shall be recovered as

an arrear of land revenue.

The Statement of Objects and Reasons states that the

Government have been considering for quite some time the question

of plugging the loopholes in the Indian Stamp Act, 1899 in its

application to this State so as to arrest the leakage of stamp revenue

and also to augment the stamp revenue in the State. The State of

Andhra Pradesh in doing so was inspired by the amendments made in

the State of Karnataka. As to Section 73 the SOR states "As per

Section 73 of the said Act, the Collector or any person authorized by

him shall inspect any public office and the public officer having in his

custody any registers, books, records etc., shall permit him to take

copies of extracts of those records. However, the inspecting officer

cannot seize the deficitly stamped documents and impound the same

during inspection. On account of this loophole, the inspecting officers

are not able to seize and impound the deficitly stamped documents

and collect the deficit stamp revenue. It has therefore been decided to

empower the Inspecting Officers to enter any premises and seize the

documents and impound them."

[For a detailed Statement of Objects and Reasons see The Andhra

Pradesh Gazette Extraordinary Part IV-A dated March 20, 1986 pp. 9 \026

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11.]

The A.P. State Rules (1986)

In exercise of the powers conferred by Section 75 of the Indian

Stamp Act, 1899 and of all other powers hereunto enabling and in

supersession of the earlier rules the Governor of Andhra Pradesh

framed rules for the collection of duties secured in the course of

inspection under Section 73 of the Indian Stamp (Andhra Pradesh

Amendment) Act, 1986 which rules came into force on the 16th day of

August, 1986. The relevant part of the rules is extracted and

reproduced hereunder:

1. In these rules unless the context otherwise

requires:-

(a) 'Act' means, the Indian Stamp (A.P.

Amendment) Act, 1986.

(b) "Inspector-General of Registration and

Stamps" includes the person authorized in writing by

him as the Collector appointed under section 73 of

the Act to exercise the powers under that Section.

(c) 'Head of Office' means, the head of the

Office inspected by the Inspector General of

Registration and Stamps under section 73.

(d) 'Section' means a section of the Act.

(e) 'Any premises' includes any public office

or any place where registers, books, documents etc.,

are kept under the custody of a person the

inspection whereof may tend to secure any duty.

2. (1) The notes of inspection under

section 73 shall be sent to the Head of office with a

copy to the Head of the District office, if the office

inspected is subordinate to him, or with a copy to the

Head of the Department concerned, if the office

inspected is the District or Regional Office.

(2) The first reports of compliance shall be

sent to the Inspector General of Registration and

Stamps, immediately on receipt of the notes of

inspection by the Head of Office, with a copy to the

Head of the District Office concerned, if the office

inspected is subordinate to him or with a copy to the

Head of the Department, if the office inspected is a

District or Regional Office.

3. When deficitly stamped documents are

detected during the course of inspection the

following procedure shall be followed:-

(i) The Inspector General of Registration and

Stamps or the person authorized by him shall seize

and impound such documents and after giving an

opportunity to the parties levy deficit duties if any,

without penalty and collect the same from the

persons liable to pay under sub-section (3) of the

section 73 and add the following certificate on the

original document:-

xxx xxx xxx

(ii) If the parties fail to pay the deficit duty

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under sub-rule (i), it shall be collected by the head of

office. The amounts so collected shall be remitted to

the Treasury under the following head of account by

means of a challan.

xxx xxx xxx

(iii) If the parties failed to pay such deficit

duties, the Inspector General of Registration and

Stamps shall forward the original document to the

Collector exercising powers under section 48 of the

Indian Stamp Act, 1899 over the area for effecting

recovery by coercive process. After the amounts are

so collected, the procedure laid down in sub-rule (i)

shall be followed.

(iv) In the absence of original documents,

and on the basis of copies of such documents, if they

are found to be not duly stamped, the procedure for

collection of the duty as laid down in rule (iii) shall

be followed :

4. If the parties are aggrieved by the levy

of duties they may apply to the Inspector General of

Registration and Stamps for revision before the

certificate prescribed under rule 3 is added.

5. xxx xxx xxx

6. xxx xxx xxx

[For full text of Rules see Andhra Pradesh Gazette, Rules supplement

to Part-II Extraordinary dated August 14, 1986 pp. 4-77.]

The Challenge

There were 25 writ petitions filed in the High Court. Out of

these, 11 were by different banks. A few writ petitions were filed by

institutions, corporate or incorporate bodies and a few were filed by

sugar companies. The grievances arose because the documents

executed between private parties and received and retained in the

custody of the bank in ordinary course of their loan advancing

transactions were inspected and then the banks were served with a

request to remit the amount of deficit duty on the documents

inspected and to recover the same from the parties concerned. The

grievance of the sugar companies is that in the course of their

business they were entering into agreements with the sugarcane

growers selling sugarcane to the sugar companies in compliance with

the provisions of A.P. Sugarcane Control Order, 1965 in the proforma

prescribed by Control Order. Several agreements entered into in the

prescribed proforma were treated as unstamped (though they were

not liable to be stamped, in the submission of sugar companies) and

therefore were sought to be impounded. The grievance of private

persons is that the documents in their possession are sought to be

inspected, impounded and levied with duty though they were not

tendered in evidence nor produced before any public office.

A perusal of the judgment of the High Court shows that in

holding the impugned Section 73 of the Act ultra vires of the

Constitution and other provisions of the Indian Stamp Act, the High

Court has arrived at four findings: firstly, that the amended Section 73

is inconsistent with the other provisions of the Act; secondly, that the

provision is violative of the principles of natural justice; thirdly, the

provision is arbitrary and unreasonable and hence violative of Article

14 of the Constitution; and fourthly, there are no guidelines provided

for the exercise of power by the authorized persons under the

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amended Section 73 which is either arbitrary and unreasonable or

vitiated on account of excessive delegation of statutory powers.

During the course of hearing Mrs. K. Amareswari, the learned

senior counsel for the appellants has vehemently attacked the

correctness of the impugned judgment submitting that the A.P.

Amendments are directed towards safeguarding the revenue of the

State and striking at the evil of stamp duty evasion, and therefore the

validity of such reasonable legislation was not liable to be questioned

as unconstitutional. On the other hand, the learned counsel appearing

for the respondents have defended the judgment of the High Court by

reiterating the same grounds of attack on the constitutional validity of

the impugned amendment as were urged in the High Court; of course

enlarging the reach of submissions by developing the dimensions

thereof. We will deal with the submissions so made before us.

Nature of stamp legislation

Stamp Act is a piece of fiscal legislation. Remedial statutes and

statutes which have come to be enacted on demand of the permanent

public policy generally receive a liberal interpretation. However, fiscal

statutes cannot be classed as such, operating as they do to impose

burdens upon the public and are, therefore, construed strictly. A few

principles are well settled while interpreting a fiscal law. There is no

scope for equity or judiciousness if the letter of law is clear and

unambiguous. The benefit of any ambiguity or conflict in different

provisions of statute shall go for the subject. In Dowlatram Harji &

Anr. Vs. Vitho Radhoti & Anr., (1881) 5 ILR (Bom) 188, the Full

Bench indicated the need for balancing the harshness which would be

inflicted on the subjects by implementation of the Stamp Law as

against the advantage which would result in the form of revenue to the

State; the latter may not be able to compensate the discontent which

would be occasioned amongst the subjects.

The legislative competence of the State of Andhra Pradesh to

amend and modify the Indian Stamp Act, a Central legislation, in its

applicability to the State of Andhra Pradesh, has not been questioned

and rightly so in view of the State enactment having been reserved for

the consideration of the President and having received his assent

under Article 254(2) of the Constitution. The attack is on the ground

of unreasonableness, inconsistency and excessive delegation of powers

and also on account of drastic powers having been conferred on

executive authorities without laying down guidelines.

The provisions of Section 29 providing for the persons by whom

duties are payable have been left untouched. So is with Section 31

dealing with 'adjudication as to proper stamp' which confers power on

the Collector to adjudicate upon the duty with which a document shall

be chargeable, though such document may or may not have been

executed. The scheme of Section 31 involves an element of

voluntariness. The person seeking adjudication must have brought

the document to Collector and also applied for such adjudication. The

document cannot be compelled to be brought before him by the

Collector. Section 33 confers power of impounding a document not

duly stamped subject to the document being produced before an

authority competent to receive evidence or a person incharge of a

public office. It is necessary that the document must have been

produced or come before such authority or person incharge in

performance of its functions. The document should have been

voluntarily produced. At the same time, Section 36 imposes an

embargo on the power to impound, vesting in the authority competent

to receive evidence, by providing that it cannot question the admission

of document in evidence once it has been admitted. None of these

provisions have been amended by the State of Andhra Pradesh.

In Surajmull Nagoremull Vs Triton Insurance Co. Ltd., AIR

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1925 PC 83, their Lordships of the Privy Council made it clear that the

provisions of the Stamp Act cannot be held to have been framed solely

for the protection of revenue and for the purpose of being enforced

solely at the instance of the revenue officials.

Power to impound a document and to recover duty with or

without penalty thereon has to be construed strictly and would be

sustained only when falling within the four corners and letter of the

law. This has been the consistent view of the Courts. Illustratively,

three decisions may be referred. In Mussammat Jai Devi Vs. Gokal

Chand, 1906 (7) PLR 428, a document not duly stamped was

produced in the Court by the plaintiff alongwith the plaint but the suit

came to be dismissed for non-prosecution. It was held by the Full

Bench that the document annexed with the plaint cannot be said to

have been produced in the Court in evidence and the court had no

jurisdiction to call for the same and impound it. In Munshi Ram Vs.

Harnam Singh, AIR 1934 Lahore 637(1), the suit was compromised

on the date of first hearing and decree was passed based on the

compromise. The original entry in a bahi was not put in evidence and,

therefore, the Special Bench held it was not liable to be impounded.

In L. Puran Chand, Proprietor, Dalhousie Dairy Farm Vs.

Emperor, AIR 1942 Lahore 257, the power to impound was sought to

be exercised after the decision in the suit and when the document

alleged to be not duly stamped had already been directed to be

returned as not proved though it was not physically returned. The

Special Bench held that the document was not available for being

impounded.

Though an instrument not duly stamped may attract criminal

prosecution under Section 62 of the Act but the Parliament and the

Legislature have both treated it to be a minor offence punishable with

fine only and not cognizable. Here again it is well settled that such

offence is liable to be condoned by payment of duty and penalty on the

document and no prosecution can be launched except in the case of a

criminal intention to evade the Stamp Law or in case of a fraud and

that too after giving the person liable to be proceeded against, an

opportunity of being heard.

A bare reading of Section 73 as substituted by A.P. Act No.17 of

1986 indicates the infirmities with which the provision suffers. The

provision empowers any person authorized in writing by the Collector

to have access to documents in private custody or custody of a public

officer without regard to the fact whether the documents are sought to

be used before any authority competent to receive evidence and

without regard to the fact whether such document would ever be

voluntarily produced or brought before a public officer during the

performance of any of his specified functions in his capacity as such.

The power is capable of being exercised by such persons at all

reasonable times and it is not preceded by any requirement of the

reasons being recorded by the Collector or the person authorized for

his belief necessitating search. The person authorized has been vested

with authority to impound the document. It is only in case of

documents in custody of any bank that an exception has been carved

out for giving a 30 days previous notice to the bank to make good the

deficit stamp duty before seizing and impounding the document. Not

only there is no valid reason ? none pointed out either in the

pleadings nor at the hearing ___ for drawing the distinction between a

bank and other public office or any person having custody of

document. Even in the case of a bank, the power to adjudicate upon

the need for impounding the document has been vested in the person

authorized. The provision does not lay down any guidelines for

determining the person who can be authorized by the Collector to

exercise the powers conferred by Section 73.

It is submitted on behalf of the respondents (writ petitioners in

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the High Court) that impugned Section 73 (as applicable in Andhra

Pradesh) interferes with the personal liberty of citizens inasmuch as it

allows an intrusion into the privacy and property of the citizens. The

instruments may have been kept in the residential accommodation of a

person or may have been kept at a place belonging to the person and

meant for the custody of the documents and both such places can be

entered into by any person authorized in writing by the Collector. It

was submitted that the provision is unreasonable and cannot be

sustained on the constitutional anvil.

Right of privacy qua search and seizure - debate in other

countries.

The right to privacy and the power of the State to 'search and

seize' have been the subject of debate in almost every democratic

country where fundamental freedoms are guaranteed. History takes

us back to Semayne's case decided in 1603 (5 Coke's Rep. 91a) (77

Eng. Rep. 194) (KB) where it was laid down that 'Every man's house is

his castle'. One of the most forceful expressions of the above maxim

was that of William Pitt in the British Parliament in 1763. He said:

"The poorest man may in his cottage bid defiance to all the force of

the Crown. It may be frail - its roof may shake - the wind may blow

through it - the storm may enter, the rain may enter - but the King

of England cannot enter - all his force dare not cross the threshold of

the ruined tenement".

When John Wilkes attacked not only governmental policies but

the King himself pursuant to general warrants, State officers raided

many homes and other places connected with John Wilkes to locate his

controversial pamphlets. Entick, an associate of Wilkes, sued the

State officers because agents had forcibly broken into his house, broke

locked desks and boxes, and seized many printed charts, pamphlets

and the like. In a landmark judgment in Entick v. Carrington: (1765)

(19 Howells' State Trials 1029) (95 Eng Rep 807), Lord Camden

declared the warrant and the behaviour as subversive 'of all the

comforts of society' and the issuance of a warrant for the seizure of all

of a person's papers and not those only alleged to be criminal in

nature was 'contrary to the genius of the law of England'. Besides its

general character, the warrant was, according to the Court, bad

inasmuch as it was not issued on a showing of probable cause and no

record was required to be made of what had been seized. In USA, in

Boyd v. United States (1886) 116 US 616 (626), the US Supreme

Court said that the great Entick judgment was 'one of the landmarks of

English liberty\005.. one of the permanent monuments of the British

Constitution'.

The Fourth Amendment in the US Constitution was drafted after

a long debate on the English experience and secured freedom from

unreasonable searches and seizures. It said:

"The right of the people to be secure in their

person, houses, papers, and effects, against

unreasonable searches and seizures, shall not be

violated and no Warrants shall issue, but upon

probable cause, supported by oath or affirmation,

and particularly describing the place to be

searched, and the persons or things to be seized."

Art. 12 of the Universal Declaration of Human Rights (1948) refers to

privacy and it states:

"No one shall be subjected to arbitrary interference

with his privacy, family, home or correspondence

nor to attacks upon his honour and reputation.

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Everyone has the right to the protection of the law

against such interference or attacks."

Art. 17 of the International Covenant of Civil and Political Rights (to

which India is a party), refers to privacy and states that:

"No one shall be subjected to arbitrary or unlawful

interference with his privacy, family, home and

correspondence, nor to unlawful attacks on his

honour and reputation."

The European Convention on Human Rights, which came into

effect on Sept. 3, 1953, also states in Art. 8:

"1. Everyone has the right to respect for his

private and family life, his home and his

correspondence.

2. There shall be no interference by a public

authority except such as is in accordance with law

and is necessary in a democratic society in the

interests of national security, public safety or the

economic well-being of the country, for the

protection of health or morals or for the protection

of the rights and freedoms of others."

The Canadian Charter of Rights and Freedoms declares:

'Everyone has the right to be secure against unreasonable search and

seizure.'

The New Zealand Bill of Rights declares in sec. 21 that

"everyone has the right to be secure against unreasonable search or

seizure, whether of the person, property or correspondence or

otherwise".

Though the US Constitution contains a specific provision in the

Fourth Amendment against 'unreasonable search and seizure', it does

not contain any express provision protecting the 'right to privacy'.

However, the US Supreme Court has culled out the 'right of privacy'

from the other rights guaranteed in the US Constitution. In India, our

Constitution does not contain a specific provision either as to 'privacy'

or even as to 'unreasonable' search and seizure, but the right to

privacy has, as we shall presently show, been spelt out by our

Supreme Court from the provisions of Arts. 19(1)(a) dealing with

freedom of speech and expression, Art. 19(1)(d) dealing with right to

freedom of movement and from Art. 21 which deals with right to life

and liberty. We shall first refer to the case law in US relating to the

development of the right of privacy as these cases have been

adverted to in the decisions of this Court.

Privacy right in US initially concerned 'property':

The American Courts trace the 'right to privacy' to the English

common law which treated it as a right associated with 'right to

property'. It was declared in Entick v. Carrington (1765) that the

right of privacy protected trespass against property. Lord Camden

observed:

"The great end for which men entered into society

was to secure their property. That right is

preserved sacred and incommunicable in all

instances where it has not been taken away or

abridged by some public law for the good of the

whole\005\005. By the laws of England, every invasion

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of private property, be it even so minute, is a

trespass. No man can set foot upon my ground

without my licence but he is liable to an action

though the damage be nothing."

This aspect of privacy as a property right was accepted by the US

Supreme Court in Boyd v. United States (1886) 116 US 616 (627)

and other cases.

From right to property to right to person:

After four decades, in Olmstead vs. United States (1928) 277

US 438, which was a case of wire-tapping or electronic surveillance

and where there was no actual physical invasion, the majority held

that the action was not subject to Fourth Amendment restrictions.

But, in his dissent, Justice Brandeis, stated that the Amendment

protected the right to privacy which meant 'the right to be let alone',

and its purpose was 'to secure conditions favourable to the pursuit of

happiness', while recognizing 'the significance of man's spiritual

nature, of his feelings and of his intellect'; the right sought 'to protect

Americans in their beliefs, their thoughts, their emotions and their

sensations'. The dissent came to be accepted as the law after another

four decades.

When the right to personal privacy came up for consideration in

Griswold v. State of Connecticut: (1965) 381 US 278), in the

absence of a specific provision in the US Constitution, the Court traced

the right to privacy as an emanation from the right to freedom of

expression and other rights. In that case, Douglas, J. observed that

the right to freedom of speech and press included not only the right to

utter or to print, but also the right to distribute, the right to receive,

and the right to read and that without these peripheral rights, the

specific right would be less secure and that likewise, the other specific

guarantees in the Bill of Rights have penumbras, forced by emanations

from those guarantees which help give them life and substance. It

was held that the various guarantees created zones of privacy and that

protection against all government invasions "of the sanctity of man's

house and the privacies of life" was fundamental. The learned Judge

stated that 'privacy is a fundamental personal right, emanating from

the totality of the constitutional scheme, under which we (Americans)

live'.

The shift from property to person was clearly declared in

Warden v. Heyden: (1967) 387 US 294 (304) as follows:

"\005 the premise that property interests control the

right of the Government to search and seize has

been discredited\005.. We have recognized that the

principal object of the Fourth Amendment is the

protection of privacy rather than property, and

have increasingly discarded fictional and

procedural barriers rested on property concepts."

Katz and 'reasonable expectation of privacy':

Thereafter, in Katz v. United States (1967) 389 US 347, there

was a clearer enunciation when the majority laid down that the Fourth

Amendment protected 'people and not places'. Harlan, J. in his

concurring opinion said, - in a passage which has been held to be the

distillation of the majority opinion - that the Fourth Amendment

scrutiny would be triggered whenever official investigative activity

invaded 'a reasonable expectation of privacy'. Although the phrase

came from Justice Harlan's separate opinion, it is treated today as the

essence of the majority opinion (Terry v. Ohio (1968) 392 US 1.

(See Constitution and Criminal Procedure, First Principles by Prof.

Akhil Amar, Yale University Press (1997), p. 183 fn.42).

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Stevens, J. in Thornburgh v. American College of O & G

(1986) 476 US 747 observed that 'the concept of privacy embodies

the moral fact that a person belongs to himself and not to others nor

to society as a whole'. The same learned Judge had said earlier in

Whalen v. Roe (1977) 429 US 589 that the right embraces both a

general 'individual interest in avoiding disclosure of personal matters'

and a similarly general, - but nonetheless distinct - 'interest in

independence in making certain kinds of important decisions'. Fried

says in 'Privacy' (1968) Yale Law Journal 475 (at 477) that physical

privacy is as necessary to 'relations of the most fundamental

sort\005.respect, love, friendship and trust' as 'oxygen is for

combustion'. A commentator in (1976) 64 Cal L Rev 1447 says that

privacy centres round values of repose, sanctuary and intimate

decision. Repose refers to freedom from unwanted stimuli; sanctuary

to protection against intrusive observation; and intimate decision, to

autonomy with respect to the most personal of life's choices. (Prof.

Lawrence H. Tribe's treatise, 'American Constitutional Law', (1988),

2nd Ed, ch.15)

Prof. Tribe says (ibid, p 1306) that to make sense for

constitutional law out of the smorgasbord of philosophy, sociology,

religion and history upon which our understanding of humanity

subsists, we must turn from absolute propositions and dichotomies so

as to place each allegedly protected act and each illegitimate

intrusion, in a social context related to the Constitution's test and

structure. He says (p 1307) that 'exclusion of illegitimate intrusions

into privacy depends on the nature of the right being asserted and the

way in which it is brought into play; it is at this point that context

becomes crucial - to inform substantive judgment'. If these factors

are relevant for defining the right to privacy, they are quite relevant -

whenever there is invasion of that right by way of searches and

seizures at the instance of the State. In New Zealand, in the

watershed case of R v. Jeffries (1994) (1) NZLR 290 (CA),

Robertson, J. stated that the reasonableness of a search and seizure

would depend upon the subject \026 matter and the unique combination

of 'time, place and circumstances'. The Court made a distinction

between illegality and reasonableness of the search or seizure, in the

context of sec. 21 of the N.Z. Bill of Rights, 1990. It said 'a search

may be legal but unreasonable; it may be illegal but reasonable'.

Probably, what was meant was that a search under a Court warrant

may be lawful but the manner in which it is executed may be

unreasonable. Likewise, there may be very rare exceptions where a

search and seizure operation is conducted without a warrant on

account of a sense of grave urgency for preventing danger to life or

property or where delay in procuring a warrant may indeed result in

the evidence vanishing but still the search or seizure might have been

conducted in a reasonable manner.

As to privacy of the home, the same has been elaborated.

Chief Justice Burger stated in United States v. Orito: (1973) 413

US 139 that the Constitution extends special safeguards to the privacy

of the home, just as it protects other special privacy rights such as

those of marriage, procreation, motherhood, childbearing and

education. Prof. Tribe states (p. 1412) that indeed, privacy of the

home has the longest constitutional pedigree of the lot, "for the

sanctity of the home\005 has been embedded in our traditions since the

origins of the Republic"; when we retreat across the threshold of the

home, inside, the government must provide escalating justification if it

wishes to follow, monitor or control us there. In Stanley v. Georgia:

(1969)394 US 557 it was declared that however free the State may be

to ban the public dissemination of constitutionally unprotected

obscene materials, the State cannot criminalize the purely private

possession of such material at home - "The state has no business

telling a man sitting alone in his own house, what books he may read

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or what films he may watch".

The above discussion shows that in the United States principles

regarding protection of privacy of the home have been put on strong

basis and the right is treated as a personal right distinct from a right

to property. The right is, however, not absolute though any intrusion

into the right must be based upon probable cause as stated in the

Fourth Amendment.

Intrusion into privacy may be by - (1) legislative provisions,

(2) administrative/executive orders and (3) judicial orders. The

legislative intrusions must be tested on the touchstone of

reasonableness as guaranteed by the Constitution and for that

purpose the Court can go into the proportionality of the intrusion vis-

`-vis the purpose sought to be achieved. (2) So far as administrative

or executive action is concerned, it has again to be reasonable having

regard to the facts and circumstances of the case. (3) As to Judicial

warrants, the Court must have sufficient reason to believe that the

search or seizure is warranted and it must keep in mind the extent of

search or seizure necessary for the protection of the particular state

interest. In addition, as stated earlier, common law recognized rare

exceptions such as where warrantless searches could be conducted

but these must be in good faith, intended to preserve evidence or

intended to prevent sudden danger to person or property.

Development of law in India:

The earliest case in India to deal with 'privacy' and 'search and

seizure' was M.P. Sharma v. Satish Chandra (1954 SCR 1077) in

the context of Art. 19(1)(f) and Art. 20(3) of the Constitution of India.

The contention that search and seizure violated Art. 19(1)(f) was

rejected, the Court holding that a mere search by itself did not affect

any right to property, and though seizure affected it, such effect was

only temporary and was a reasonable restriction on the right. The

question whether search warrants for the seizure of documents from

the accused were unconstitutional was not gone into. The Court, after

referring to American authorities, observed that in US, because of the

language in the Fourth Amendment, there was a distinction between

legal and illegal searches and seizures and that such a distinction need

not be imported into our Constitution. The Court opined that a search

warrant was addressed to an officer and not to the accused and did

not violate Art. 20(3). In the present discussion the case is of limited

help. In fact, the law as to privacy was developed in latter cases by

spelling it out from the right to freedom of speech and expression in

Art 19(1)(a) and the right to 'life' in Art. 21.

Two latter cases decided by the Supreme Court of India where

the foundations for the right were laid, concerned the intrusion into

the home by the police under State regulations, by way of 'domiciliary

visits'. Such visits could be conducted any time, night or day, to keep

a tag on persons for finding out suspicious criminal activity, if any, on

their part. The validity of these regulations came under challenge. In

the first one, Kharak Singh v. State of UP, 1964(1) SCR 332, the

UP Regulations regarding domiciliary visits were in question and the

majority referred to Munn v. Illinois (1876) 94 US 113 and held that

though our Constitution did not refer to the right to privacy expressly,

still it can be traced from the right to 'life' in Art. 21. According to the

majority, Clause 236 of the relevant Regulations in UP, was bad in

law; it offended Art. 21 inasmuch as there was no law permitting

interference by such visits. The majority did not go into the question

whether these visits violated the 'right to privacy'. But, Subba Rao J

while concurring that the fundamental right to privacy was part of the

right to liberty in Art. 21, part of the right to freedom of speech and

expression in Art. 19(1)(a), and also of the right to movement in Art.

19(1)(d), held that the Regulations permitting surveillance violated

the fundamental right of privacy. In the discussion the learned Judge

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referred to Wolf v. Colorado: (1948) 338 US 25. In effect, all the

seven learned Judges held that the 'right to privacy' was part of the

right to 'life' in Art. 21.

We now come to the second case, Govind v. State of MP

[1975] 2 SCC 148, in which Mathew, J. developed the law as to

privacy from where it was left in Kharak Singh. The learned Judge

referred to Griswold v. Connecticut (1965) 381 US 479 where

Douglas, J. referred to the theory of penumbras and peripheral rights

and had stated that the right to privacy was implied in the right to

free speech and could be gathered from the entirety of fundamental

rights in the constitutional scheme, for, without it, these rights could

not be enjoyed meaningfully. Mathew, J. also referred to Jane Roe v.

Henry Wade (1973) 410 US 113 where it was pointed out that

though the right to privacy was not specifically referred to in the US

Constitution, the right did exist and "roots of that right may be found

in the First, Fourth and Fifth Amendments, in the penumbras of the

Bill of rights, in the Ninth Amendment, and in the concept of liberty

guaranteed by the first section of the Fourteenth Amendment'.

Mathew, J. stated that, however, the 'right to privacy was not

absolute' and that the makers of our Constitution wanted to ensure

conditions favourable to the pursuit of happiness as explained in

Olmstead v. United States (1927) 277 US 438 (471); the privacy

right can be denied only when an 'important countervailing interest is

shown to be superior', or where a compelling State interest was

shown. (Mathew, J. left open the issue whether moral interests could

be relied upon by the State as compelling interests). Any right to

privacy, the learned Judge said, (see para 24) must encompass and

protect the personal intimacies of the home, the family, marriage,

motherhood, procreation and child bearing. This list was however not

exhaustive. He explained (see para 25) that, if there was State

intrusion there must be 'a reasonable basis for intrusion'. The right to

privacy, in any event, (see para 28) would necessarily have to go

through a process of case-by-case development.

Coming to the particular UP Regulations 855 and 856, in

question in Govind, Mathew, J. examined their validity (see para 30).

These, according to him, gave large powers to the police and needed,

therefore, to be read down, so as to be in harmony with the

Constitution, if they had to be saved at all. 'Our founding fathers

were thoroughly opposed to a Police Raj!' he said. Therefore, the

Court must draw boundaries upon these police powers so as to avoid

breach of constitutional freedoms. While it could not be said that all

domiciliary visits were unreasonable (see para 31), still while

interpreting them, one had to keep the character and antecedents of

the person who was under watch as also the objects and limitations

under which the surveillance could be made. The right to privacy

could be restricted on the basis of compelling public interest. The

learned Judge noticed that unlike non-statutory regulations in Kharak

Singh, here Regulation 856 was 'law' (being a piece of subordinate

legislation) and hence it could not be said in this case that Art.21 was

violated for lack of legislative sanction. The law was very much there

in the form of these Regulations. Regulations 853(1) and 857

prescribed a procedure that was 'reasonable'. So far as Regulation

856 was concerned, it only imposed reasonable restrictions within Art.

19(5) and there was, even otherwise, a compelling State interest.

Regulations 853(1) and 857 referred to a class of persons who were

suspected as being habitual criminals, while Regulation 857 classified

persons who could reasonably be held to have criminal tendencies.

Further Regulation 855, empowered surveillance only of persons

against whom reasonable materials existed for the purpose of inducing

an opinion that they show a determination to lead a life of crime. The

Court thus read down the Regulations and upheld them for the above

reasons.

We have referred in detail to the reasons given by Mathew, J. in

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Govind to show that, the right to privacy has been implied in Art.

19(1)(a) and (d) and Art. 21; that, the right is not absolute and that

any State intrusion can be a reasonable restriction only if it has

reasonable basis or reasonable materials to support it.

A two-judges Bench in R. Rajagopal Vs. State of Tamil Nadu

(1994) 6 SCC 632 held the right of privacy to be implicit in the right to

life and liberty guaranteed to the citizens of India by Article 21. "It is

the right to be let alone". Every citizen has a right to safeguard the

privacy of his own. However, in the case of a matter being part of

public records, including court records, the right of privacy cannot be

claimed. The right to privacy has since been widely accepted as

implied in our Constitution, in other cases, namely, PUCLVs. Union of

India, (1997) 1 SCC 301; Mr. X Vs. Hospital 'Z', (1998) 8 SCC 296;

People's Union for Civil Liberties Vs. Union of India, (2003) 4

SCC 399; Sharda Vs. Dharmpal, (2003) 4 SCC 4931.

The impugned provision of the A.P. Amendment on anvil :

It is in the background of the above, the validity of sec. 73 of

the Stamp Act, 1899 falls to be decided.

The text of Sec.73 Indian Stamp Act and the text as amended

in its application to State of A.P. have been set out in the earlier part

of the judgment.

It will be seen that under sec.73, the Collector could inspect the

'registers, books, records, papers, documents or proceedings' in the

public office. Obviously, this meant that the inspection must relate to

'public documents' in the custody of the public officer or to public

record of private documents available in his office. The inspection

could be carried out only by a person authorized __ in writing __ by the

Collector. The purpose of inspection has to be specific and has to be

based upon a belief that (i) such inspection may tend to secure any

(stamp) duty, or (ii) it may tend to prove any fraud or omission in

relation to any duty or (iii) it may tend to lead to the discovery of any

fraud or omission in relation to any duty.

The above provisions have remained in sec. 73 even after the

A.P. Amendment of 1986. The validity of the unamended provisions

of sec.73 of the Stamp Act, 1899 is not in issue before us. It is a pre-

constitutional law. It is obvious that in its operation after the

commencement of the Constitution, even the unamended sec.73 must

conform to the provisions of Part III of our Constitution.

When public record in the Sub-Registrar's Office or a Bank or

for that matter any other public office is inspected for the purposes

referred to in the impugned sec.73, the public officer may indeed have

no objection for such inspection. But, as in the case before us, in the

context of a Bank which either holds the private documents of its

customers or copies of such private documents, the question arises

whether disclosure of the contents of the documents by the Bank

would amount to a breach of confidentiality and would, therefore, be

violative of privacy rights of its customers?

Bank and its customers __ confidentiality of relationship

It cannot be denied that there is an element of confidentiality

between a Bank and its customers in relation to the latter's banking

transactions. Can the State have unrestricted access to inspect and

seize or make roving inquiries into all Bank records, without any

reliable information before it prior to such inspection? Further, can

the Collector authorize 'any person' whatsoever to make the

inspection, and permit him to take notes or extracts? These questions

arise even in relation to the sec.73 and have to be decided in the

context of privacy rights of customers.

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There has been a great debate in the US about privacy in

respect of Bank records and inspection thereof by the State. In

United States Vs. Miller, (1976) 425 US 435, the majority of the

Court laid down that once a person passes on cheques etc. to a Bank,

which indeed is in a position of a third party, the right to privacy of the

document is no longer protected. In that case, the respondent, who

had been charged with various federal offences, made a pre-trial

motion to suppress microfilms of cheques, deposit slips and other

records relating to his accounts with two Banks, which maintained

records relating to (US) Bank Secrecy Act, 1970. He contended that

the subpoenas duces tecum pursuant to which the material had been

produced by the Banks, were defective and that the records had thus

been illegally seized in violation of the Fourth Amendment. The

request was denied by the trial Court, the Respondent was tried and

convicted. The Court of Appeals reversed, holding that the subpoened

documents fell within the constitutionally protected zone of privacy.

On further appeal, the US Supreme Court restored the conviction

holding that, once the documents reached the hands of a third party,

namely, the Bank, the Respondent ceased to possess any Fourth

Amendment interest in the Bank records that could be vindicated by a

challenge to the subpoenas, that the materials were business records

of the banks and not the respondents' private papers; that, there was

no legitimate 'expectation of privacy' (as stated in Katz) in the

contents of the original cheques and deposit slips, since the cheques

were "not confidential communications" but negotiable instruments to

be used in commercial transactions and the documents contained only

information voluntarily conveyed to the Banks which was exposed to

the employees in the ordinary course of business. The Court laid down

a new principle of "assumption of risk". It said the "depositor takes

the risk, in revealing his affairs to another". The Court declared that

the Fourth Amendment did not prohibit the obtaining of information

revealed to a third party and conveyed by that party to government

authorities. Once the person who had the privacy right "assumed the

risk" of the information being conveyed to the outside world by the

Bank, he could make no kind of complaint.

The above decision led to a serious criticism by jurists (See 'A'

below) that the broad proposition, namely, that once a person

conveyed confidential documents to a third party, he would lose his

privacy rights, was wrong and was based on the old concept of

treating the right of privacy as one attached to property whereas the

Court had, in Katz accepted that the privacy right protected

'individuals and not places'; Congress came forward with the Right to

Financial Privacy Act, 1978 (Pub L No.95-630) which provided several

safeguards to secure privacy, __ namely __ requiring reasonable cause

and also enabling the customer to challenge the summons or warrant

in a Court of law before it could be executed; (See (B) below) (We do

not mean to say that any law which is not on those lines is invalid.

Indian laws such as s.132 etc. of the Indian Income Tax Act, 1961; or

secs. 91, 165 and 166 of the Criminal Procedure Code, 1973 as to

search and seizure have, as stated below, been extensively considered

by the Courts in India and have been held to be valid).

(A) Criticism of Miller: (i) The majority in Miller laid down that a

customer who has conveyed his affairs to another had thereby lost his

privacy rights. (i) Prof. Tribe states in his treatise (see p.1391) that

this theory reveals 'alarming tendencies' because the Court has gone

back to the old theory that privacy is in relation to property while it

has laid down that the right is one attached to the person rather than

to property. If the right is to be held to be not attached to the person,

then 'we would not shield our account balances, income figures and

personal telephone and address books from the public eye, but might

instead go about with the information written on our 'foreheads or our

bumper stickers'. He observes that the majority in Miller confused

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'privacy' with 'secrecy' and that "even their notion of secrecy is a

strange one, for a secret remains a secret even when shared with

those whom one selects for one's confidence". Our cheques are not

merely negotiable instruments but yet the world can learn a vast

amount about us by knowing how and with whom we have spent our

money. Same is the position when we use the telephone or post a

letter. To say that one assumes great risks by opening a bank account

appeared to be a wrong conclusion. Prof. Tribe asks a very pertinent

question (p. 1392):

"Yet one can hardly be said to have assumed a risk

of surveillance in a context where, as a practical

matter, one had no choice. Only the most

committed - and perhaps civilly committable \026

hermit can live without a telephone, without a bank

account, without mail. To say that one must take a

bitter pill with the sweet when one licks a stamp is

to exact a highly constitutional price indeed for

living in contemporary society".

He concludes (p. 1400):

"In our information-dense technological era, when

living inevitably entails leaving not just

informational footprints but parts of one's self in

myriad directories, files, records and computers, to

hold that the Fourteenth Amendment did not

reserve to individuals some power to say when

and how and by whom that information and those

confidences were to be used, would be to

denigrate the central role that informational

autonomy must play in any developed concept of

the self."

(ii) Prof. Yale Kamisar (again quoted by Prof. Tribe) (p.1392) says:

"It is beginning to look as if the only way someone

living in our society can avoid 'assuming the risk'

that various intermediate institutions will reveal

information to the police is by engaging in drastic

discipline, the kind of discipline of life under

totalitarian regimes".

This reminds us of what Mathew, J. said in Govind, that we are

not living in a police-Raj.

(iii) Richard Alexander, a jurist-lawyer in an article published in

South West University Law Review (1978) Vol.10 (pp.13-33), titled,

'Privacy, Banking Records and Supreme Court: A Before and After

Look at Miller', says:

"The Supreme Court (in Miller) followed the

old property interest line of analysis under the

Fourth Amendment, . . . . . . such confidentiality is

due to the longstanding recognition that the

information contained in such records is highly

personal . . . . . In the light of the liberty given to

the government to inspect banking records through

use of administrative summonses, it is impossible

to reconcile Miller with Katz and Griswold . . . . .

The United States Supreme Court rejected the

Katz's 'justifiable expectation of privacy' analysis

and opted for a mechanical 'property interest'

analysis which is unwieldy in its application to

twentieth century technology."

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(iv) Polyviou G. Polyviou in his book 'Search and Seizure'

(Duckworth, 1982) in an exhaustive discussion on Miller (pp.67 to 71)

concludes that "Miller, partly through reliance on property

considerations and partly through insensitive application of a rigid

'misplaced confidence' doctrine, has brought about a 'highly

questionable' gap in Fourth Amendment coverage".

(v) La Fave in his book 'Search and Seizure' (1978) (quoted by

Polyviou) calls the Miller decision as 'pernicious' and characterizes its

reasoning as 'woefully inadequate'.

(vi) Profs. Jackson and Tushnet in 'Comparative Constitutions Law'

(2001) say (p.404) that "in the USA the Fourth Amendment to the

Constitution bars police from conducting 'unreasonable' searches, but

the Supreme Court has been willing to stamp nearly every

troublesome form of police activity as either not a search or not

unreasonable. Oddly enough, the Court has made the law in this area

nearly unintelligible . . . . . "

(vii) In this connection, two other articles, the 'Note, Government

Access to Bank Records' (1974) 83 Yale Law Journal 1439 and 'A Bank

customer has no reasonable expectation of Privacy of Bank Records',

United States v. Miller: 14 San Diego L. Rev (1974) are also

relevant. (quoted by Polyvious G. Polyviou P.67)

(B) We shall next refer to the response by Congress to Miller. (As

stated earlier, we should not be understood as necessarily

recommending this law as a model for India). Soon after Miller,

Congress enacted the 'Right to Financial Privacy Act, 1978 (Public Law

No.95-630) 12 USC with ss.3401 to 3422). The statute accords

customers of Banks or similar financial institutions, certain rights to be

notified of and a right to challenge the actions of government in Court

at an anterior stage before disclosure is made. Sec.3401 of the Act

contains 'definitions'. Sec. 3402 is important, and it says that 'except

as provided by sec. 3403(c) or (d), 3413 or 3414, - no Government

authority may have access to or obtain copies of, or the information

contained in the financial records of any customer from a financial

institution unless the financial records are reasonably described and

that (1) such customer has authorized such disclosure in accordance

with sec. 3404; (2) such records are disclosed in response to (a)

administrative subpoenas or summons to meet requirement of sec.

3405; (b) the requirements of a search warrant which meets the

requirements of sec.3406; (c) requirements of a judicial subpoena

which meets the requirement of sec. 3407 or (d) the requirements of a

formal written requirement under sec. 3408. If the customer decides

to challenge the Government's access to the records, he may file a

motion in the appropriate US District Court, to prevent such access.

The Act also provides for certain specific exceptions.

While we are on (B), it is necessary to make a brief reference to

sec. 93(1) of the Code of Criminal Procedure, 1973 which deals with

power of the Court to issue 'search warrants' (a) where the Court has

'reason to believe' that a person to whom a summons or order under

sec.91 or a requisition under sec. 92(1) has been, or might be,

addressed, - will not or would not produce the document or thing as

required by summons or requisition, or (b) where such document or

thing is not known to the Court to be in the possession of any person,

or (c) where the Court considers that the purposes of any inquiry, trial

or other proceeding under the Code, will be served by a general search

or inspection, it may issue a search-warrant; and the person to whom

such warrant is directed, may search or inspect in accordance

therewith and the provisions contained in the Code. Under sec.93(2),

the Court may, if it thinks fit, specify in the warrant, the place or part

thereof to which only the search or inspection shall extend; and the

person charged with the execution of such warrant shall then search or

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inspect only the place or part so specified. Under sec.93(2), a warrant

to search for a document, parcel or other thing in the custody of the

postal or telegraph authority, has to be issued by the District

Magistrate or Chief Judicial Magistrate.

Sec. 165 of the Code deals with the power of a police officer to

search. Under sec. 165(1) he must have reasonable grounds for

believing that anything necessary for the purpose of an investigation

into any offence, which he is authorized to investigate, may be found

in any place within the limits of the police station and that such thing

cannot, in his opinion, be otherwise obtained without undue delay. He

has to record the grounds of his belief in writing and specify, so far as

possible, the thing for which search is made. Sec.166 refers to the

question as to when an officer-in-charge of a police station may

require another to issue search warrant.

In the Income-tax Act, 1961 elaborate provisions are made in

regard to 'search and seizure in sec.132; power to requisition books of

account etc. in sec. 132A; power to call for information as stated in

sec. 133. Sec. 133(6) deals with power of officers to require any Bank

to furnish any information as specified there. There are safeguards.

Sec.132 uses the words "in consequence of information in his

possession, has reason to believe". Sec. 132(1A) uses the words "in

consequence of information in his possession, has reason to suspect".

Sec. 132(13) says that the provisions of the Code of Criminal

Procedure, relating to searches and seizure shall apply, so far as may

be, to searches and seizures under sec. 132(1) and 132(1A). There

are also Rules made under sec.132(14). Likewise sec. 132A(1) uses

the words "in consequence of information in his possession, has reason

to believe". Sec. 133 which deals with the power to call for

information from Banks and others uses the words "for the purpose of

this Act" and sec. 133(6) permits a requisition to be sent to a Bank or

its officer. There are other Central and State statutes dealing with

procedure for 'search and seizure' for the purposes of the respective

statutes.

Under all these enactments, there are several judgments of this

Court explaining the scope of the provisions, and the safeguards

provided by those provisions while upholding their constitutional

validity and pointing out their limitations. It is not necessary in this

case to refer to those judgments. Suffice it to say that, in the present

case we are concerned mainly with the validity of sec. 73 of the Stamp

Act, as amended in its application in 1986 in A.P.

Once we have accepted in Govind and in latter cases that the

right to privacy deals with 'persons and not places', the documents or

copies of documents of the customer which are in Bank, must continue

to remain confidential vis-`-vis the person, even if they are no longer

at the customer's house and have been voluntarily sent to a Bank. If

that be the correct view of the law, we cannot accept the line of Miller

in which the Court proceeded on the basis that the right to privacy is

referable to the right of 'property' theory. Once that is so, then unless

there is some probable or reasonable cause or reasonable basis or

material before the Collector for reaching an opinion that the

documents in the possession of the Bank tend, to secure any duty or

to prove or to lead to the discovery of any fraud or omission in relation

to any duty, the search or taking notes or extracts therefore, cannot

be valid. The above safeguards must necessarily be read into the

provision relating to search and inspection and seizure so as to save it

from any unconstitutionality.

Secondly, the impugned provision in sec. 73 enabling the

Collector to authorize 'any person' whatsoever to inspect, to take

notes or extracts from the papers in the public office suffers from the

vice of excessive delegation as there are no guidelines in the Act and

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more importantly, the section allows the facts relating to the

customer's privacy to reach non-governmental persons and would, on

that basis, be an unreasonable encroachment into the customer's

rights. This part of the Section 73 permitting delegation to 'any

person' suffers from the above serious defects and for that reason is,

in our view, unenforceable. The State must clearly define the officers

by designation or state that the power can be delegated to officers not

below a particular rank in the official hierarchy, as may be designated

by the State.

The A.P. amendment permits inspection being carried out by the

Collector by having access to the documents which are in private

custody i.e. custody other than that of a public officer. It is clear that

this provision empowers invasion of the home of the person in whose

possession the documents 'tending' to or leading to the various facts

stated in sec. 73 are in existence and sec. 73 being one without any

safeguards as to probable or reasonable cause or reasonable basis or

materials violates the right to privacy both of the house and of the

person. We have already referred to R. Rajagopal's case wherein

the learned judges have held that the right to personal liberty also

means the life free from encroachments unsustainable in law and such

right flowing from Article 21 of the Constitution.

In Smt. Maneka Gandhi Vs. Union of India & Anr., (1978) 1

SCC 248 ___ a 7-Judges Bench decision, P.N. Bhagwati, J. (as His

Lordship then was) held that the expression 'personal liberty' in

Article 21 is of the widest amplitude and it covers a variety of rights

which go to constitute the personal liberty of man and some of them

have been raised to the status distinguishing as fundamental rights

and give additional protection under Article 19 (emphasis supplied).

Any law interfering with personal liberty of a person must satisfy a

triple test: (i) it must prescribe a procedure; (ii) the procedure must

withstand the test of one or more of the fundamental rights conferred

under Article 19 which may be applicable in a given situation; and (iii)

it must also be liable to be tested with reference to Article 14. As the

test propounded by Article 14 pervades Article 21 as well, the law and

procedure authorizing interference with personal liberty and right of

privacy must also be right and just and fair and not arbitrary, fanciful

or oppressive. If the procedure prescribed does not satisfy the

requirement of Article 14 it would be no procedure at all within the

meaning of Article 21.

The constitutional validity of the power conferred by law came

to be decided from yet another angle in the case of Air India Vs.

Nergesh Meerza & Ors., (1981) 4 SCC 335, it was held that a

discretionary power may not necessarily be a discriminatory power

but where a statute confers a power on an authority to decide matters

of moment without laying down any guidelines or principles or norms,

the power has to be struck down as being violative of Article 14.

An instrument which is not duly stamped cannot be received in

evidence by any person who has authority to receive evidence and it

cannot be acted upon by that person or by any public officer. This is

the penalty which is imposed by law on the person who may seek to

claim any benefit under an instrument if it is not duly stamped. Once

detected the authority competent to impound the document can

recover not only duty but also penalty, which provision, protects the

interest of revenue. In the event of there being criminal intention or

fraud, the persons responsible may be liable to be prosecuted. The

availability of these provisions, in our opinion adequately protects the

interest of revenue. Unbridled power available to be exercised by any

person whom the Collector may think proper to authorize without

laying down any guidelines as to the persons who may be authorized

and without recording the availability of grounds which would give rise

to the belief, on the existence where of only, the power may be

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exercised deprives the provision of the quality of reasonableness.

Possessing a document not duly stamped is not by itself any offence.

Under the garb of the power conferred by Section 73 the person

authorized may go on rampage searching house after house i.e.

residences of the persons or the places used for the custody of

documents. The possibility of any wild exercise of such power may be

remote but then on the framing of Section 73, the provision impugned

herein, the possibility cannot be ruled out. Any number of documents

may be inspected, may be seized and may be removed and at the end

the whole exercise may turn out to be an exercise in futility. The

exercise may prove to be absolutely disproportionate with the purpose

sought to be achieved and, therefore, a reasonable nexus between

stringency of the provision and the purpose sought to be achieved

ceases to exist.

The abovesaid deficiency pointed out by the High Court and

highlighted by the learned counsel for the respondents in this Court

has not been removed even by the rules. The learned counsel for the

respondents has pointed out that under the Rules the obligation is cast

on the bank or any other person having custody of the documents

though it may not be a party to the document, to pay the duty payable

on the documents in order to secure release of the documents.

For the foregoing reasons we agree with the view taken by the

High Court that Section 73 of the Indian Stamp Act as amended in its

application to the State of Andhra Pradesh by Andhra Pradesh Act No.

17 of 1986 is ultra vires the Constitution. As we do not find any

infirmity in the judgment of the High Court all the appeals are

dismissed.