Karnataka High Court
Sri. Shamshad Ahamed S/O Wajid Ali vs The State Of Karnataka on 8 August, 2017
Bench: Ravi Malimath, John Michael Cunha
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®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 08TH DAY OF AUGUST, 2017
BEFORE
THE HON'BLE MR. JUSTICE RAVI MALIMATH
AND
THE HON'BLE MR.JUSTICE JOHN MICHAEL CUNHA
CRIMINAL APPEAL NO.708 OF 2010
BETWEEN:
SRI. SHAMSHAD AHAMED
S/O WAJID ALI
AGED ABOUT 56 YEARS,
THE MANAGING DIRECTOR,
M/S. RIO HOTEL AND RESORT LTD.,
NO 16, SUNNY BROOKS,
SARJAPURA ROAD,
BENGALURU - 560 100. ... APPELLANT
(BY SRI M.T.NANAIAH, SENIOR COUNSEL APPEARING FOR
SRI PRADEEP SOMAIAH, ADVOCATE)
AND:
THE STATE OF KARNATAKA
UPPARPET POLICE STATION
BENGALURU.
THROUGH CENTRAL
BUREAU OF INVESTIGATION. ... RESPONDENT
(BY SRI P.PRASANNA KUMAR, SPL. PP)
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THIS CRIMINAL APPEAL IS FILED UNDER SECTION
454 CR.P.C., PRAYING TO SET ASIDE THE PORTION OF
ORDER DATED 10.02.2010/17.02.2010 PASSED BY THE
SPECIAL JUDGE, 35TH ADDL. CITY CIVIL & SESSIONS
JUDGE, BENGALURU IN S.C.NO.430 OF 2002, IN
DIRECTING THE APPELLANT/ACCUSED TO DEPOSIT AN
AMOUNT OF RS.25,00,000/- (TWENTY FIVE LAKHS)
BEFORE THE SPECIAL JUDGE, 35TH ADDL. CITY CIVIL &
SESSIONS JUDGE, BENGALURU.
*****
THIS CRIMINAL APPEAL COMING ON FOR ORDERS
THIS DAY, RAVI MALIMATH J., DELIVERED THE
FOLLOWING:
JUDGMENT
Aggrieved by the order dated 10th February 2010, passed by the Special Judge, 35th Addl. City Civil & Sessions Judge, Bengaluru, in S.C.No.430 of 2002, directing the Appellant-PW-122, Shamshad Ahamed, to deposit an amount of Rs.25.00 lakhs before the trial court forthwith and on such deposit to confiscate the same, he has filed the present appeal under Section-454 of Cr.P.C.
2. The brief facts of the prosecution case is that, charges were framed against 33 accused for the offences under sections 225 to 260, 465, 467, 468, 471 to 475, 419 3 and 420 read with Section 120-B of the Indian Penal Code. They were investigated by various agencies and ultimately, the charge-sheet was filed by the Central Bureau of Investigation. Seventeen accused were convicted, eleven were acquitted and the case against two of the accused were split up. During the course of the trial, the appellant was examined as PW-122. He has stated that he received a sum of Rs.25.00 lakhs from accused No.13, towards part payment of the sale consideration of a property at Brigade Road, Bengaluru. The total consideration was Rs.50.00 lakhs. He has received a total of Rs.25.00 lakhs by various cheques. Thereafter, a draft sale deed was sent to accused No.13. In the mean-while, the stamp racket erupted. The sale did not materialize. The trial court on considering this evidence, took into consideration various other material with regard to the source of payment of the amount of Rs.25.00 lakhs. In considering the evidence as well as the material relating to the said Rs.25.00 lakhs, the trial court by exercising its power under section 452 Cr.P.C., while 4 delivering the judgment pertaining to the accused in the case, directed the appellant viz., PW-122, to deposit an amount of Rs.25.00 lakhs before the trial court. That on the said deposit being made, the same was to be confiscated. Hence, this appeal by PW-122.
3.(a) Shri.M.T.Nainaiah, the learned Senior Counsel appearing for the appellant's counsel contends, that the order passed by the Trial Court, under Section-452 of Cr.P.C., so far as the appellant is concerned, is erroneous. That the trial court exceeded its jurisdiction in recording a finding, that the appellant is liable to deposit the said amount. That there is no material to indicate, that the amount paid by accused No.13 to this appellant, is part and parcel of the ill-gotten wealth, from the sale of counterfeit stamps.
(b). He further contends that there is absolute lack of evidence to indicate that the amount paid by accused No.13 to the appellant, was an ill-gotten amount. That 5 accused No.13 had a known source of income from various other businesses and it is from those businesses that he generated the said amounts, which has been paid to PW- 122, namely, the appellant herein. Therefore, it is contended that the appellant is entitled to retain this amount, since it is a contractual amount between accused No.13 and the appellant.
(c). He further contends that even though the appellant was examined a prosecution witness as PW-122, in the course of delivering the judgment, the trial court directed, that the appellant is liable to make the deposit of the said amount. That before such an order of confiscation could be passed, the appellant should have been heard. Without hearing the appellant, no adverse orders could be passed against him. Hence, on the ground of lack of notice, the impugned order, referable to the appellant, is liable to be set-aside. Hence, he pleads that since there is no notice issued to him, the order directing him to make the payment stands vitiated.
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4.(a) On the other hand, Shri.P.Prasanna Kumar, learned Special Public Prosecutor appearing for the respondent - CBI, disputes the same. He contends that the evidence of the appellant is clear and cogent and hence no interpretation is called for. The money does not belong to the appellant. It is the money that belonged to accused No.13. The trial court has extensively considered the evidence on record and thereafter came to the conclusion, that this amount of Rs.25,00,000/- (Rupees Twenty Five Lakhs Only) paid by accused No.13, is from the illegal business of manufacture and sale of counterfeit stamps. Therefore, the appellant cannot retain the said amount.
(b). Reliance is placed on the judgment of the Hon'ble Supreme Court reported in ILR 1998 KAR 2803, in the case of THE ORIENTAL INSURANCE COMPANY LIMITED vs. THE CITY CO-OPERATIVE BANK LIMITED with reference to para - 13, which reads as follows:
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"13. Therefore, the aforequoted authorities dealing with the scope of Section 161, 162 in the context of an order to be placed by a Criminal Court under Section 452 Cr.P.C. make the legal position clear for the purpose of the delivery of property under Section 452 Cr.P.C. that the Magistrate need not necessarily confine his attention to the prosecution evidence proper on record and on his findings recorded on the material points raised by him relating to the guilt of an accused in a criminal trial, but he can and has to look into the material portions in the statements of chargesheet witnesses are also confessional statement of the accused recorded by the Investigating Officer during the investigation, although such materials is inadmissible in evidence by virtue of Section 162 Cr.P.C. the only exception being the statement of accused falling within the ambit of Section 27 of the Evidence Act."
(c). He further relies on the judgment of the Hon'ble Supreme Court reported in ILR 1986 KAR 217 in the case of SILVER AUDIO SYSTEM VS. ASSOCIATED 8 ELECTRONIC AND ELECTRICAL INDUSTRIES, with reference to para - 24, which reads as follows:
"24. Now turning to the second limb of his argument that the goods seized in this case are required for the purpose of making an order of disposal at the conclusion of the enquiry or trial, I do not think the very property is required to be preserved in view of Section 452(5) Cr.P.C. It stipulates that the term 'property' stipulated in Section 452 includes not only the property as has been originally in the possession or under the control of any party regarding which an offence appears to have been committed but also any property into or for which the same may have been converted or exchanged and anything acquired by such conversion or exchanged whether immediately or otherwise. If we apply the provisions contained in sub-section (5) of Section 452 to the facts of the case, even if the goods seized are returned to the 1st accused and those goods in specie are not available at the conclusion of the trial, the price of those properties which the 1st accused would come into possession by putting them into market 9 would partake the character of 'property' stipulated under Section 452 for the purpose of disposal of the property involved in the case. So in either way, I find no force in this contention."
(d). He therefore contends that the term "property" as stipulated under Section-452 of Cr.P.C., includes not only the property that has been originally in possession or under the control of any party regarding which an offence which appears to have been committed, but also any property into or for which the same may have been converted or exchanged whether immediately or otherwise. Therefore, the material on record would indicate, that the amounts paid to the appellant, are as a result of the money received from the sale of counterfeit stamps and hence would fall under the definition of 'property'.
5. Heard learned counsels and examined the records.
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6. The appellant was arrayed as PW-122. He has stated in his evidence as follows:
"2. I was M.D. of Reo Hotel and Resort Private Limited Company. Company owned Commercial Complex called 5th Avenue, Brigade Road, Bengaluru. Company owned a coffee shop in the said Commercial Complex. In the month of June/July 2000, said coffee shop was leased to Mr.Subhan for running the business/coffee shop. Sometime later, Subhan proposed why shop premises should not be sold and he also informed that Mr.Telgi is interested in purchasing the same. Mr.Telgi agreed to purchase said property for consideration of Rs.50 lakhs. Company received advance amount of Rs.25 lakhs, Company sent draft sale deed to Mr.Telgi to proceed with registration, paying the balance amount of Rs.25 lakhs, but Mr.Telgi did not proceed, in the meantime, the stamp scam cropped up and we read the same in newspaper. Mr.Subhan continued to be in the occupation of coffee shop premises agreed to be sold to Mr.Telgi."11
7. The evidence would indicate that the total sale consideration of the property in question, was Rs.50.00 lakhs. Rs.25.00 lakhs was paid as advance in the year 2000. The trial court considered the evidence and the case relatable to PW-122 in para-528 of its judgment. It noticed that 5 cheques were issued through Vysya Bank Limited, St.Marks Road, Bengaluru, through account No.7309 for a total sum of Rs.25,00,000/-. That the amount in the Bank, is the amount deposited directly or indirectly, from the sale proceeds of counterfeit stamps. Therefore, the amount of Rs.25,00,000/- paid by accused No.13 to PW- 122, namely the appellant herein, is as a result of illegal sale of counterfeit stamps. Therefore, the said amount is attracted by the definition of "property" in terms of Section
- 452(5) of Cr.P.C. Therefore, the appellant was directed to deposit the said amount.
8.(a) We have considered the reasons assigned by the trial court at para - 465 of the judgment. Specific 12 reference was made to the very bank namely, Vysya Bank, St.Marks Road, Bengaluru, to an account No.7309, standing in the name of M/s. Sri Sai, wherein five cheques, bearing Nos.282001 to 282005, for an amount of Rs.5,00,000/- each, were issued for a total consideration of Rs.25,00,000/- to the appellant herein.
(b). The contention of accused No.13 before the trial court, was that he was running a business, dealing in white kerosene under the name of Metro Corporation. That the account in Vysya Bank, St.Marks Road, pertains to Metro Corporation. That accused No.13 started the white kerosene business with effect from 27.08.1998 and he carried on the same up to the year 2000. Exhibit-P672 is a file containing the return of turnover of the Metro Corporation from 27.08.1998 to 31.03.1999, which shows the total sales amounting to Rs.5,39,925/-. The assessment record marked as Exhibit-P673 shows that the total turnover of Metro Corporation for the year 1999-2000 was Rs.9,51,464/-. Considering the said entries in the 13 account books, the total turnover of Metro Corporation from the date of registration till the year 2000 does not exceed Rs.15 to 17 lakhs. Exhibit-P673 would indicate that there is no turnover from September' 2000 to December' 2000.
(c). There is no dispute by accused No.13, of the charge against him that various properties were purchased in Bengaluru city. He purchased certain extent of buildings, known as Azad Plaza and Azad Point, in all worth about Rs.65,00,000/- and a sum of Rs.30,00,000/- was paid from the Current Account No.6175 held in the name of Metro Corporation in Amanath Co-Operative Bank, N.R.Road, Bengaluru and a sum of Rs.20,00,000/- was paid from the current account No.1862 of Metro Corporation held at Canara Bank, Kalasipalyam, Bengaluru. Further, he purchased property No.50/10, Police Road, Bengaluru in the year 2000 and the amount was paid through a demand draft from the current account No.6175 of Amanath Co-operative Bank, to the tune of 14 Rs.27.5 lakhs. There is no dispute that the Current Account No.6175 in Vysya Bank is held in the name of accused No.13. Further accused No.13 agreed to purchase a coffee shop at the ground floor of 5th Avenue Shopping Complex, by way of an agreement, on payment of Rs.25,00,000/-.
(d). Exhibit-P624 is the account extract of account No.6175 held by the accused No.13, in the name of Metro Corporation which shows that from 23.09.1998 to 30.06.2000, the total amount credited in the said account is Rs.71,06,000/- out of which, he withdrew an amount of Rs.69,71,723/-. The pay-in-slip is marked as Exhibits-P587 to P591 in which Rs.26,57,000/- being deposited in the account of Accused No.13.
(e). Therefore, all put together, the total turnover of Metro Corporation from 1998 to 2000, is not more than Rs.15 to 17 lakhs. As against this, the accused No.13 was holding Rs.71,06,000/- lakhs in the said account for the 15 said period. There is no explanation by the accused No.13 as to how the said amount was credited in the said account and from what sources he derived the said income. Therefore, this leads to the only conclusion, that these amounts deposited are income derived from the sale of counterfeit stamps.
(f). Therefore, there is substantial evidence to indicate that the money deposited in the account is not relatable to the business being run by accused No.13 in the name of Metro Corporation dealing with white kerosene. The total turnover of Metro Corporation pertaining to sale of white kerosene business is only Rs.15 to 17 lakhs. The rest of the amount in the bank account, is therefore relatable to the amount received by selling counterfeit stamps. There is substantial evidence as aforesaid, to indicate the said fact. Therefore, the trial court was justified in holding that the amounts paid to PW- 122 is not the regular income of accused No.13, by way of business through Metro Corporation, but the money that 16 he has received by sale of counterfeit stamps. Therefore, the contention of the appellant that there is no evidence to indicate that the money is received from the sale of fake stamps, cannot be accepted.
9.(a) The further contention of the appellant is that there was no notice issued by the trial court before ordering confiscation of the amount. It is the case of the appellant that he was summoned by the trial court to tender his evidence. He has tendered his evidence. However, the trial court has ordered him to deposit an amount of Rs.25,00,000/-. It is an order that runs adverse to his interest. Therefore, without hearing him or without issuing any notice to him, no adverse order, including the order of confiscation, could be passed against him. In support of his contention, he relies on the judgment of the Hon'ble Supreme Court reported in AIR 1969 SC 401 in the case of STATE BANK OF INDIA VS. RAJENDRA KUMAR SINGH AND OTHERS, with reference to para - 4, the relevant portion of which reads as follows: 17
"4. xxxxx It is true that the statute does not expressly require a notice to be issued, or a hearing to be given to the parties adversely affected. But though the statute is silent and does not expressly require issue of any notice there is in the eye of law a necessary implication that the parties adversely affected should be heard before the Court makes an order for return of the seized property."
(b). We have considered the judgment at length. The facts would indicate that the currency notes were seized by Madhya Pradesh Police from the Beawar Branch of State Bank of India in the course of investigation of a case under Sections-420, 406 read with Section-120B of IPC against the third respondent. The third respondent had come into possession of Rs.1,50,000/- in Government currency notes by cheating the first and second respondents. The said notes were said to be part of the property obtained by the third respondent by commission of the said offence. His defense was that he had come into the possession of the notes in the usual course of business 18 and he had no knowledge of the same. During the course of trial, the appellant made an application for delivery of the currency notes on the ground that it had been seized by the Police and that he was an innocent party. The trial court allowed the application and directed the currency notes be returned to him. Subsequently, he along with other accused were acquitted. The State filed an appeal challenging the order of acquittal. The High Court allowed the appeal, set-aside the order of acquittal and convicted the respondent under Sections - 420, 406 and 120-B of IPC. The first respondent made an application to the High Court seeking delivery of the currency notes as it belongs to him and the second respondent and that they have been deprived of the said property by the third respondent. The application was allowed by the High Court and the currency notes were ordered to be handed over to the first and second respondents.
(c). Aggrieved by the same the Bank moved the Hon'ble Supreme Court of India. It was firstly contended 19 before the Hon'ble Supreme Court that the High Court had reversed the order of the Sessions Judge directing return of the currency notes without giving notice to the bank and without hearing it. Following the judgment in the case of Cooper vs. Wandsworth Board of Works (1863) 14 CB NS 180, the Hon'ble Supreme Court held that even though the statute is silent and does not expressly require issue of any notice, there is in the eye of law a necessary implication that the parties adversely affected should be heard before the court makes an order.
(d). The facts in the aforesaid judgment is not applicable to the facts of the present case. In the aforesaid judgment, the dispute was as to who is the proper person to receive the currency notes. In the instant case, the dispute is different. It is not the question of the recipient, but the question of the holder of the amount. In the aforesaid judgment, there was a dispute as to whether the appellant is entitled to receive the amount. There were two 20 claims for the currency notes; one is the bank and the other, the respondent before the Hon'ble Supreme Court. Therefore, the Hon'ble Supreme Court held that when there are conflicting claims, both parties must be heard. Therefore, absence of notice vitiates the orders.
(e). In the instant case, the question of issuing a notice would not arise for consideration at all. Admittedly, the appellant is the holder of the money given to him by Accused No.13. There is no claim by anybody, not even by Accused No.13 even till date. Therefore, neither the facts nor the principles enunciated by the Hon'ble Supreme Court, would stand applicable in any manner whatsoever to the present appeal.
11.(a) Reliance is placed by the appellant on the judgment of the Hon'ble Supreme Court reported in AIR 1979 SC 1829, in the case of N. MADHAVAN VS. STATE OF KERALA, with reference to para-11 to contend that without issuing a notice, the order of confiscation is 21 erroneous. Para No.11 of the said judgment reads as follows:
"11. Let us now test the impugned order in the light of these principles. Can it be said to be an order made judicially? The answer is unhesitatingly 'No'. The Sessions Judge did not give any reason, whatever, for directing confiscation of this licensed gun admittedly belonging to the appellant-accused. Nor was there any material before him indicating the special circumstances which would warrant a departure from the general rule aforesaid. Nor is there anything in the record to show that the Sessions Judge had, before passing the order of confiscation, given an opportunity of being heard to the accused, specifically with regard to this matter. The order of confiscation of the gun was thus manifestly arbitrary."
(b). With regard to the contention of non-issuance of the notice to the appellant, we requested the appellant counsel, to treat the present appeal, as a notice. The same was accepted. The appellant's counsel contends that in reply to such a notice, he would contend that he has a 22 legal right to retain the said amount. That the money in his possession is as a result of a civil contract. That he has a civil right to retain the said amount. Therefore, such a right requires to be considered.
(c). We have considered the reply of the learned counsel for the appellant. In terms of the impugned order, the appellant is firstly directed to make the said deposit. However, the legal right if any as claimed by the appellant either in civil law or the Income tax Act or any other statute would not be affected by the impugned order herein. The appellant is at liberty to exercise his right under the said laws in the manner known to law. However, it is needless to state that such an exercise of his right would only be subject to and on compliance of the order passed by the trial court. Further it is to be noted that notwithstanding the contentions of the appellant, no steps have been taken by him with regard to the amount in dispute. That even after coming to know of the impugned 23 order, nothing has been done by the appellant to exercise any of his legal rights. Consequently, even the contention that the absence of a notice has vitiated the impugned order stands answered, by the reply by the appellant's counsel and the reasons assigned by us herein above.
12. Even if the plea of the appellant is to be considered, we are unable to understand as to how and in what manner, the appellant is entitled to retain the said amount. The only person who may have a right to the amount is probably accused No.13. Even he has not raised any claim whatsoever. Therefore, there is no ground at all, for the appellant to hold on to this money since this money, does not belong to him at all.
13. We are of the considered view that there is no error committed by the trial court in passing the impugned order. The order has been passed by taking into consideration the entire evidence on record. The amounts 24 paid to the appellant are as a result of the amounts derived out of sale of the counterfeit stamps. Hence for the aforesaid reasons, the order passed by the trial court is just and appropriate and does not call for interference.
14.(a) At this stage, we are constrained to notice the fact that the impugned order of the trial court was passed on 10.02.2010. Even as on date, the appellant has not deposited the said amount before the trial court or before this Court. There is no order staying the impugned order herein. No proceeding has been initiated by the appellant with reference to the said amount. Therefore, we are of the view that since the subject matter in dispute herein is public money, the appellant would be liable to pay interest on the said amount, as this is a commercial transaction. It is a transaction involving money. Money does not stay idle. Therefore, the appellant would be liable to pay interest. Hence, we requested the learned Senior Counsel to reply to this issue.
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(b). The appellants counsel disputes the same. He contends that he was not aware of the passing of the impugned order. After coming to know of the same, he initially filed Criminal Petition No.2379 of 2010, under Section-482 of Cr.P.C., before this Court challenging the very impugned order herein. A submission was made therein that since the appellant has filed the instant appeal he would pursue the same. In view of the filing of this appeal, Criminal Petition No.2379 of 2010, was dismissed by the order dated 06.07.2010. There was a delay of 92 days in filing the appeal. The appeal was filed on 13.05.2010. Therefore, accepting the reasons assigned while condoning the delay in filing the appeal, based on the contention of the appellant himself, since the appeal was filed on 13.05.2010, he would be liable to pay interest from that date onwards.
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15. So far as the percentage of interest is concerned, it is an undisputed fact that it is commercial transaction. Therefore, the commercial rate of interest stands applicable. It is submitted at the Bar, that the present rate of interest, for commercial transactions is 16% per annum, which is normally awarded by the court. Therefore, the appellant would be liable to pay 16% per annum w.e.f. 13.05.2010.
16. For all the aforesaid reasons, the appeal being devoid of merit is dismissed. The judgment and the order of the trial court dated 10.02.2010 / 17.02.2010, passed by the Special Judge, 35th Additional City Civil And Sessions Judge, Bengaluru in S.C.No.430 of 2002, insofar as the appellant, is concerned is confirmed. The appellant is directed to pay a sum of Rs.25,00,000/- (Rupees Twenty Five Thousand Only) along with interest at the rate of 16% per annum from 13.05.2010, till the date of deposit. The said amount with interest shall be deposited 27 with the trial court, within three months from the date of receipt of a copy of this order.
Sd/- Sd/-
JUDGE JUDGE
mn/JJ