Andhra Pradesh High Court - Amravati
Sri.Avva Alivelu Manga Thai Kompalli ... vs The State Of Andhra Pradesh, on 7 September, 2020
Author: U. Durga Prasad Rao
Bench: U. Durga Prasad Rao
HON'BLE SRI JUSTICE U. DURGA PRASAD RAO
Writ Petition No.15298 of 2020
ORDER:
The petitioner prays for a writ of mandamus declaring the action of respondents 2 & 3 in issuing notice dated 23.06.2020 to the petitioner & 4th respondent directing her to deposit the damages for use and occupation of the premises bearing D.No.23-35-39, Adavi Seshagiri Rao Street, Lakshmi nagar, Satyanarayanapuram, Vijayawada as illegal, arbitrary and violative of the Articles 14, 19(1)(g) & 300-A of the Constitution of India and principles of natural justice and provisions of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 (for short, "the APPDFE Act, 1999") and for a consequential direction to set aside the said notice.
2. The petitioner's case briefly is thus:
(a) The petitioner is the absolute owner of the petition mentioned property, which she purchased with her own funds and enjoying the same.
(b) The petitioner is the wife of the Director of M/s. Agri Gold Farms Estate Private Limited. Police officials raided Agrigold group of companies and the houses of Director on 11.02.2016 and the CID Department registered FIRs under Section 420, 406, 120-B IPC and Section 4 of the APPDFE Act, 1999. The CID officers attached all the properties of Agrigold company and also attached the personal 2 properties of the petitioner through G.O.Ms.No.21 dated 28.01.2019 and G.O.Ms.No.133 dated 17.10.2019, Home (ARMS & SPF) Department under Section 3 of the aforesaid Act. Thereafter the CID Department filed Crl.M.P.Nos.1009/2018 & 193/2019 in Cr.No.3/2015 before the Special Court-cum-Principal District & Sessions Judge, Eluru seeking confirmation of the attachment of the properties covered under the aforesaid G.Os. The attachment in respect of the properties of the petitioner mentioned in those G.Os is not yet confirmed and the petitions are still pending.
(c) While so, the respondents 2 & 3 issued notice dated 23.06.2020 to the petitioner and 4th respondent, who is her sister, directing them to pay the damages for use and occupation of the premises into the bank account of the CID on the ground that the said property is under ad interim attachment in Cr.No.3/2015. The respondents did not issue any notice to the petitioner though she is the affected person by virtue of the said notice.
(d) The attachment was not made absolute till date and the petitions filed by the CID Department before the Special Court are still pending. Hence, the respondents 2 & 3 have no power or authority or jurisdiction to give notices to the petitioner. Hence, the impugned notice is bad at law. Further, the subject property is the personal property of the petitioner and the same has nothing to do with Cr.No.3/2015. She has purchased the said property with her own funds and therefore, the very ad interim attachment itself is per se amounts to violation of law. The petitioner is contesting before the 3 Special Court and hence, at this stage the notice is quite untenable and unjustifiable.
Hence, the writ petition.
3. Learned Government Pleader for Home took notice on behalf of the respondent Nos.1 to 3. No counter is filed.
4. Heard the learned counsel for petitioner Sri P.S.P.Suresh Kumar, and learned Government Pleader for Home representing the respondent Nos.1 to 3.
5. The main plank of the argument of learned counsel for petitioner is that she purchased the subject property with her own funds and at present the same is under the occupation of 4th respondent. It is the further contention of the petitioner that though the petitioner happens to be the wife of Avva Venkata Rama Rao, the Director of M/s. Agrigold Farm Estates Private Limited against whom and its group of companies Cr.No.3/2015 is registered and under investigation, still the petitioner has nothing to do with the said case and the subject property is her absolute property which she acquired with her own funds. Hence, the attachment itself is bad at law and so far the Special Court has not confirmed the attachment and the petitioner is contending before the said Court questioning the validity of the attachment. Pending the said petition the respondents 2 & 3 issued the impugned notice which is legally untenable. 4
6. Learned counsel for the petitioner would submit that in respect of the similar notices issued to the spouse of other Directors and some others in respect of some other properties, they filed W.P.No.11795/2020 & batch and this Court was pleased to allow the batch of writ petitions and set aside the notices.
7. Learned Government Pleader for Home while opposing the writ petition, however, admitted that in W.P.No.11795/2020 & batch the similar notices were set aside by this Court.
8. The point for consideration is whether the impugned notice dated 23.06.2020 issued by the respondents 2 & 3 is factually and legally sustainable?
9. Point: Section 3 of the APPDFE Act, 1999 confers power on the Government to issue an ad-interim order of attachment of money or other property alleged to have been procured either in the name of the financial establishment or in the name of any other person from and out of the deposits collected by financial establishment. Such an order could be passed where complaints have been received from a depositor or depositors that any financial establishment defaulted or is likely to default in the matter of return of deposits on maturity or where the Government have reason to believe that any financial establishment is acting in a manner prejudicial to the interests of the depositors with an intention to defraud the depositors. The Government upon issuing the ad-interim order of attachment, may 5 transfer the control of such attached money or property to the Competent Authority. It is to be noted that Section 4 confers the power on the Government to appoint by notification an authority called the 'Competent Authority' to exercise control over the properties attached by the Government under Section 3. As per Section 4(3) of APPDFE Act, 1999, the Competent Authority within 15 days upon receiving the orders of the Government under Section 3, shall apply to the Special Court constituted under this Act for making ad-interim order of attachment absolute. Then Section 7 lays down that upon receiving the application under Section 4, the Special Court shall issue notice to the financial establishment or to any other person whose property is attached by the Government, calling upon to show cause as to why the order of attachment should not be made absolute. Such persons and any other persons claiming an interest in the property attached but did not receive notice, may appear and put forth their objections. The Special Court shall, subject to the provisions of the APPDFE Act, 1999, follow the procedure and exercise all the powers of a Court hearing a suit under the Code of Civil Procedure, 1908, conduct investigation and pass an order making ad-interim order of attachment either absolute or vary or cancel. The above are the provisions of the APPDFE Act, 1999 relating to the ad-interim order of attachment made by the Government and the enquiry required to be conducted by the Special Court for making the said order either absolute or vary or cancel.
6
(a) Be that it may, it is also pertinent to note that under Section 6(4), the Special Court shall, on the application of the competent authority pass an order or issue direction as may be necessary for the equitable distribution among the depositors of the money realized from out of the property attached. The aforesaid order, it can be understood, will be passed by the Special Court after disposal of the main case. While so, the impugned notice dated 23.06.2020 was issued by the respondents 2 & 3 directing the petitioner and 4th respondent, who is her sister, to deposit the damages for use and occupation of the premises into the bank account of the Competent Authority on the ground that the subject property was attached by the Government as per G.O.Ms.No.21 dated 28.01.2019. It is to be noted that the respondents have not disputed the factum of their filing applications under Section 4 of the APPDFE Act, 1999 for confirmation of attachment and the petitioner's questioning the validity of the attachment concerning to her properties. In the light of these facts, the question is whether the respondents 2 & 3 are legally empowered to issue notice to 4th respondent to deposit the rents?
10. In W.P.Nos.11795/2020 & batch, a learned Single Judge of this Court happened to deal with the following question.
"Whether the officials of Criminal Investigation Department (C.I.D) are vested with any power to issue notices shown in Column No.VI, calling upon the tenants in occupation of various property shown in Column No.IV to pay rent to the credit of Criminal Investigation Department Account by exercising power under Section 10 of the Act. If not, whether the notices impugned in the writ petitions shown in Column No.VI are liable to be set-aside?"7
Learned Judge having observed that the petitioners therein challenged the attachment before the Special Court and prayed to set aside the attachment and their petitions were pending as ultimately held thus.
"As discussed above, the control of the property was not given to Criminal Investigation Department (C.I.D) and it is still continuing under the control of the petitioners and they are collecting rents till date of issue of notices. When the petitioners are continuing to have control over the property, they are entitled to collect rents from the tenants in occupation and the Criminal Investigation Department (C.I.D) is incompetent to issue the impugned notices referred in Column No.VI, demanding the tenants to deposit the rent to the account of C.I.D, so also owners of flats (petitioner in W.P.No.11515 of 2020), though no such power is vested with the competent authority/Criminal Investigation Department (C.I.D) to collect rents. Even Section 10 of the Act also did not authorize the competent authority/Criminal Investigation Department (C.I.D) to issue such notices, administration of property attached is only for limited purpose specified in Clauses (a) & (b) of Section 10 of the Act. Hence, I find that the impugned notices mentioned in Column No.VI of the table referred above, demanding the unofficial respondents/tenants in occupation to deposit rents to the credit of Criminal Investigation Department (C.I.D) is illegal and without any authority under the Act or Rules framed thereunder. Hence, issuing such notices is contrary to the provisions of the Act and it is violative of Articles 14 and 300-A of the Constitution of India, consequently the notices mentioned in Column No.VI of the table referred above are liable to be set-aside."
11. The batch of Writ Petitions were ultimately allowed setting aside the impugned notices. It should be noted that as a matter of caution learned Judge observed that the observations recorded in those Writ Petitions are not binding in any other proceedings and the Competent Authority can take appropriate steps and appropriate action in accordance with law. In my considered view, the present petitioner also stands on the same footing as that of the petitioners in 8 the above batch of writ petitions, which were allowed and the case on hand is also similar to the batch matters and therefore, it can be disposed of in terms of the order in W.P.No.11795/2020 & batch.
12. In the result, the Writ Petition is allowed and the impugned notice dated 23.06.2020 issued by the respondents 2 & 3 directing the petitioner and 4th respondent to deposit the damages for use and occupation of the premises bearing D.No.23-35-39, Adavi Seshagiri Rao Street, Lakshmi nagar, Satyanarayanapuram, Vijayawada is hereby set aside. No costs.
As a sequel, interlocutory applications, if any pending, shall stand closed.
__________________________ U. DURGA PRASAD RAO, J 07.09.2020 MVA