Andhra Pradesh High Court - Amravati
Sri Thotavenkata Naga Ravikanth, 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.15669 of 2020
ORDER:
The petitioner seeks a writ of mandamus declaring the notice dated 21.06.2020 issued by the 3rd respondent directing him to deposit the damages for use and occupation of the property i.e., Plot No.502, Fortune Aurovindo Apartment, Ramavarappadu, 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 owner of the above mentioned property, purchased under a registered Sale Deed dated 05.07.2013 from M/s.Agri Gold Constructions Private Limited, through its authorized signatory for Rs.14,77,000/-.
(b) While so, the 3rd respondent issued the impugned notice dated 21.06.2020 directing him to deposit the damages payable for use and occupation of his plot @ Rs.9,000/- per month to the petitioner to 2nd respondent's account No.39388598907 with IFC Code SBIN0016857 of State Bank of India, MG Road, Vijayawada alleging that subject property is involved in Crime No.3/2015 of Pedapadu Police Station, West Godavari District and the said property said to be 2 in attachment as per G.O.Ms.No.23, Home (ARMS & SPF) Department, dated 20.02.2015. The said notice is illegal as the property purchased by the petitioner has nothing to do with the said crime. Even otherwise, the G.O.Ms.No.23 on the basis of which the 3rd respondent issued the impugned notice, clearly says that the said G.O was not applicable to certain properties which were registered in the respective Sub-Registrar's office before the criminal cases were registered i.e. 01.03.2015 at Pedapadu, West Godavari District.
Hence, the petitioner's property which was purchased in the year 2013 was clearly exempted from the attachment made under G.O.Ms.No.23. However, there is no intimation from the 2nd respondent about the withdrawal of the notice.
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 he purchased the subject property under a registered Sale Deed on 05.07.2013 for a valuable consideration of Rs.14.77,000/- from M/s. Agri Gold Constructions Private Limited through its authorised signatory and the said property has nothing to 3 do with Crime No.3/2015 of Pedapadu Police Station. The G.O.Ms.No.23 dated 20.02.2015 which is relied upon by the 3rd respondent to deposit the rents, itself clearly spelt out that the plots that were registered in the respective Sub-Registrar Office before the crime was registered at Pedapadu Police Station i.e. 01.03.2015 were excepted from the attachment. In that view of the matter, the subject property which was obtained under a registered Sale Deed dated 05.07.2013 much prior to the date of registration of the crime on 01.03.2015 is out of the clout of the attachment. Therefore, the 3rd respondent have absolutely no right or authority to issue the impugned notice.
(a) He alternatively argued that even assuming that the subject property is also liable for attachment still in view of the scheme of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 (for short, "the APPDFE Act, 1999") and its provisions, the 3rd respondent has no right to seek for deposit of rents from the tenant. He would submit that in similar circumstances, this Court in W.P.Nos.11795/2020 & batch has held that the Criminal Investigation Department was incompetent to issue notice demanding the tenants to deposit the rents to the account of the CID. He thus, prayed to allow the writ petition and set aside the impugned notice.
6. Learned Government Pleader for Home while supporting the impugned notice, however, fairly admitted about the order passed by this Court in W.P.Nos.11795/2020 & batch.
4
7. The point for consideration is whether the impugned notice dated 21.06.2020 issued by the 3rd respondent is factually and legally sustainable?
8. 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 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 the 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 5 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.
(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.
9. While so, the impugned notice dated 21.06.2020 shows that the same was issued by 3rd respondent directing the petitioner to deposit 6 the damages 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.23 Home (ARMS & SPF) Department, dated 20.02.2015. There can be no demur that in view of Section 3 of the Act mentioned supra, the Government have power to issue ad-interim order of attachment of a property in the interests of the depositors upon fulfilment of the conditions mentioned in the said section. The petitioner is not questioning the statutory power of the Government. However, his concern is that even the said G.O.Ms.No.23 itself has exempted from attachment of those properties which were registered prior to the registration of the Crime on 01.03.2015 by the Police of Pedapadu Police Station and the subject property being registered on 05.07.2013, the same will not fall within the purview of the said G.O. I find force in the said contention. In the Annexrue-I of the G.O.Ms.No.23, it was mentioned thus. "Except the plots that were registered in the respective Sub-Registrar Offices before the Criminal cases were registered i.e. 01.03.2015 at Pedapadu, West Godavari District, the rest of the land shall cover under the above G.O". The aforementioned stipulation shows that the plots which were belonging to Agri Gold company and which were sold under registered documents prior to 01.03.2015 were excepted from the purview of the G.O.Ms.No.23. It goes without saying that any constructions made on those plots and sold prior to 01.03.2015 will also be exempted from G.O.Ms.No.23. The copy of the Sale Deed executed in favour of the petitioner by Agri Gold Constructions Private Limited through its 7 authorised signatory shows that it was registered on 05.07.2013. Therefore, in view of the above stipulation in G.O.Ms.No.23, the subject property can be said to have been exempted from attachment even assuming that the said property was acquired with the funds collected from the depositors. In that view, the impugned notice is not sustainable.
(a) For another reason also, the impugned notice is not maintainable. In W.P.No.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?"
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 8 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."
10. 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.
11. Coming to the case on hand, in the instant case also though attachment is made, no record is produced by either party to show that the said attachment was made absolute by the Special Court in terms of Section 7 of the APPDFE Act, 1999. Further, the petitioner is challenging the attachment itself on the ground that the G.O.Ms.No.23 has specifically exempted those properties which were registered prior to 01.03.2015 and the subject property is one such property. Therefore, as the matter stands, in terms of the above judgment also the impugned notice is unsustainable under law.
9
12. In the result, the Writ Petition is allowed and the impugned notice dated 21.06.2020 issued by 3rd respondent directing the petitioner to deposit the damages relating to the premises bearing Plot No.502, Fortune Aurovindo Apartment, Ramavarappadu, 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