Madras High Court
Antony vs Competent Authority And on 1 April, 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS Date: 1.4.2008 Coram The Honourable Mr.Justice M.JEYAPAUL Criminal Appeal No.504 of 2005, Crl.M.P.Nos.4946 of 2005 and Crl.M.P.Nos.541 of 2007 1. Antony 2. Maria Arputham 3. M.Maria Selvi 4. G.Edwin Raja Appellants vs. 1. Competent Authority and Additional Commissioner (Cinema & Irrigation), Land Admn. Department, Chepauk, Chennai-5. 2. Antony Mohan Raj Respondents For appellants : Mr.N.Rajan For R1 : Mr.A.Saravanan, Govt. Advocate (Crl. Side) For R2 : Mr.S.Thirunavukkarasu Prayer:- Criminal Appeal against the order of the Special Court under Tamil Nadu Protection of Interest of Depositors (in Financial Establishments) Act, 1997, Chennai dated 25.5.2005 in I.A.No.123 of 2004. JUDGMENT
The criminal appeal is filed against the order passed in I.A.No.123 of 2004 on the file of the Special Court under Tamil Nadu Protection of Interest of Depositors (in Financial Establishments) Act, 1997, Chennai.
2. The petitioners were prosecuted for the offences punishable under the Tamil Nadu Protection of Interest of Depositors (in Financial Establishments) Act, 1997 (in short TNPID Act). The Government passed G.O.Ms.No.1028 Home (Courts II-A) Department dated 27.10.2003 making interim attachment of the properties of the petitioners/accused. The said communication was received by the first respondent who is the competent authority under the said Act on 4.11.2003. There was a delay of 189 days in filing an application under section 4 of the TNPID Act by the competent authority to make the interim attachment absolute. 3. Under the above facts and circumstances, the first respondent, competent authority filed an application under section 5 of the Limitation Act to condone the delay of 189 days in preferring the original application under section 4 of the TNPID Act. It has been contended by the first respondent competent authority that G.O.Ms.No.1028 Home (Courts II-A) Department dated 27.10.2003 was received by the first respondent competent authority on 4.11.2003.The first respondent competent authority should have filed an application within thirty days from the date of receipt of the said G.O praying to make the interim attachment absolute. But, the first respondent had to satisfy himself as to the defraud made by the financial establishment. He had also to enquire in detail to ascertain the fraud committed by the financial establishment. In the said process, the first respondent addressed the investigation officer and the Collector of Kanyakumari District and also the Registration Department for collection of various documents relating to the attached properties. Therefore, there had been a delay of 189 days in preferring the application under section 4 of the said Act, it is contended.
4. The third and fourth petitioners herein have contended in their common counter that the first respondent had no independent power to conduct any enquiry. In fact, no such enquiry was conducted by the first respondent. The delay in filing the Original Application was not properly explained. The time limit of 30 days fixed under section 4 of the said Act is mandatory and not directory. Therefore, the provision under section 5 of the Limitation Act is not applicable to the facts and circumstances of the case, it is submitted.
5. The Trial Court, having come to the conclusion that section 4(3) of the said Act is only directory and not mandatory inasmuch as the TNPID Act is a beneficial legislation for the depositors who have lost their hard earned money, that there was no express provision under the Act excluding the purview of section 5 of the Limitation Act and that the delay of 189 days has also been satisfactorily explained by the first respondent, allowed the application filed under section 5 of the Limitation Act by the first respondent.
6. The points that arise for determination are
(i) Whether section 5 of the Limitation Act can be invoked to condone the delay in filing an application under section 4 of TNPID Act.
(ii) Whether the delay has been properly explained by the first respondent competent authority in filing an application under section 4 of the TNPID Act.
7. Learned counsel appearing for the appellants would strenuously argue that though there is no express bar under section 4(3) of the TNPID Act, there is an implied bar to exclude the ambit of section 5 of the Limitation Act. The legislature has very carefully made the provision under section 4(3) of the TNPID Act mandatory by employing the word "shall". The courts cannot give a different interpretation when the provisions are crystal clear mandating the competent authority to file an application within the time frame fixed therein. Further, he would submit that the delay has not been explained by the first respondent.
8. Learned Government Advocate (Criminal Side) appearing for the first respondent would submit that the beneficial provision to safeguard the interest of the depositors who lost their money found in the TNPID Act would indicate the direction to the competent authority to file necessary application under section 4(3) of the TNPID Act to make the interim attachment absolute is only directory and not mandatory. There is no express bar found in the entire scheme of the said Act excluding the purview of section 5 of the Limitation Act. Further, he would submit that the first respondent has come out with cogent reason for the delay which has occasioned in preferring the application under section 4(3) of the said Act within thirty days from the date of receipt of the G.O issued by the Government making interim attachment.
9. Learned counsel appearing for the second respondent/de facto complainant would contend that this court has already held that section 5 of the Limitation Act would apply in case there is a delay in filing the application within the time frame fixed under section 4(3) of the TNPID Act to make the interim order of attachment absolute. Further, the intendment of the Act would clearly establish that the provisions under section 4(3) of the said Act is only directory and not mandatory. The Trial Court has rightly come to the conclusion having thoroughly analysed the scheme of the TNPID Act that section 5 of the Limitation Act would apply to the provision under section 4(3) of the TNPID Act. It is his further submission that the administrative delay shown by the first respondent cannot be simply ignored taking hyper technical view adverse to the interest of the depositors who have been languishing for years together having lost their hard earned money.
10. Section 4(3) of the TNPID Act reads as follows:-
"Upon receipt of the orders of the Government under Section 3, the Competent authority shall apply within thirty days to the special court constituted under this Act for making the ad-interim order of attachment absolute."
11. A time frame has been fixed under section 4(3) of the TNPID Act for the competent authority to approach the Special Court to make the ad interim order of attachment as absolute. He shall apply to the Special Court within 30 days from the date of receipt of the orders of the Government attaching the property as an interim measure.
12. In the instant case, G.O. Ms.No.1028 Home (Courts II-A) Department was issued making ad interim order of attachment on 27.10.2003. There is no dispute to the fact that the competent authority under the TNPID Act received the said notification on 4.11.2003. As per section 4(3) of the TNPID Act, an application should have been made within 30 days from 4.11.2003 i.e., on or before 3.12.2003. But, admittedly, there is a delay of 189 days in invoking the provision under section 4(3) of the TNPID Act by the competent authority.
13. Reverting to the provision under section 4(3) of the Act, it is found that the word "shall" has been employed therein to bring home the necessity and the urgency in invoking section 4(3) of the TNPID Act by the competent authority. In my considered opinion, the word "shall" has been used under the aforesaid provision of law just to wake up the Executive Authority who has been nominated as a competent authority under the Act, as otherwise, the perpetrators of the crime as against the innocent depositors would easily get away with the looted money giving false hope to the victims.
14. In this context, it is relevant to refer to the observation of the Supreme Court in PARADISE PRINTERS v. UNION TERRITORY OF CHANDIGARH ((1998) 1 SCC 440) which reads as follows:-
"Generally the use of the word "shall" prima facie indicates that the particular provision is imperative. But that is not always so. The meaning to be given to a word depends upon the context in which it is used. The word takes the colour depending upon the context. We must ask what does the word mean in its context? We must examine why the rule making authority has chosen that word. After examining the purpose and scope of the rule, we must give such meaning as to render the rule workable in a fair manner. We must give that meaning which would promote the purpose and object of the rule."
15. The purpose and scope of the provision which carries the word "shall" will have to be decided in the light of the object and intendment of the Special Act. Further, the context in which the word "shall" has been used will have to be examined by the court beforeever assigning the ordinary meaning for the word "shall". If the court comes to the conclusion in the background of the beneficial special enactment that the word "shall" has been employed only for the purpose of shaking the execution machinery, then, the court will have to conclude that the word "shall" has been used only as directory and not mandatory. In the light of the aforesaid observation, the court comes to the conclusion that the word "shall" does not always mean a mandatory direction. It may also mean if the context so requires a directory direction.
16. Let me now take the objects and reasoning which led to the enactment of the Special Act. There had been mushroom growth of financial establishments in the State of Tamil Nadu which started functioning erratically without any control of Reserve Bank of India with a view to usurp the hard earned money of the innocent victims. The State of Tamil Nadu has determined, having received whopping complaints, to stem the rot in the malfunctioning of the financial institutions. The upper class, with their able expertise, can bank on their resources and they cannot be easily hoodwinked, but, the unfortunate middle class and the poor are targeted by the financial institutions with all sorts of bait advertisements to fall to their prey. In that process, the financial establishments used to amass wealth and at one point of time, having been guided by the ulterior motive, disappear from the scene and vapourised in the thin air with crores and crores of money they collected on administering sugar coated pills to the innocent public.
17. The TNPID Act is a beneficial legislation to take care of the interest of such innocent depositors. Originally, there was no provision in the said Act for attaching the properties of the persons, who borrowed money from the financial institutions and sale of the attached property in public auction and for the equitable distribution of the sale proceeds to the depositors. In order to overcome the above short comings, Tamil Nadu Act 30/2003 was introduced to amend the TNPID Act. Under section 3 of the Act, where the Government have reason to believe that any financial establishment is going in a calculated manner with an intention to defraud the depositors and they are satisfied that such financial establishment is unlikely to return the deposits or to make payment of interest, the Government has been given the discretion, with a view to protect the interest of depositors of such financial establishments, to pass an ad interim order of attachment of the money and 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 the financial establishment. The competent authority appointed under the Act has been directed to approach the Special Court constituted under the Act within 30 days from the date of receipt of the aforesaid order passed by the Government for making the order absolute.
18. The aforesaid provisions of the said Act would go to show that the Act is a beneficial legislation enacted for the purpose of protecting the innocent depositors. If we assign the imperative meaning to section 4(3) of the Act and block the competent authority to move the court with satisfactorily explainable delay, then the aforesaid purpose of the Act would be the casualty.
19. The Supreme Court in RAGHUNATH RAI BAREJA v. PUNJAB NATIONAL BANK (2007 5 CTC 642) has held, "The first and foremost rule of construction is the literary construction. All that the Court has to see the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes ... the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming that there is a defect or a omission in the word used by the legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result ... A judge must not rewrite a statute, neither to enlarge nor to contract it ... The period of limitation statutorily prescribed has to be directly adhered to and cannot be relaxed or departed from by equitable considerations. When there is a conflict between law and equity, it is the law which has to prevail."
20. The Supreme Court has succinctly stated in the aforesaid authority as to how an interpretation of a statute should be made by the courts of law. Thus the general rule of interpretation is enunciated by the Apex Court. It does not in any way pose restriction to the powers of the court to go into the object of the Act and the mischief that may be caused if a particular provision of law is interpreted in a literal way.
21. In this context, it is found useful to refer to the observation of the Supreme Court in STATE OF GUJARAT v. SALIMBHAI ABDULGAFFAR SHAIKH ((2003) 8 SCC 50) which reads as follows:-
"It is a well-settled principle that the intention of the legislature must be found by reading the statute as a whole. Every clause of a statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute. It is also the duty of the court to find out the true intention of the legislature and to ascertain the purpose of the statute and give full meaning to the same. The different provisions in the statute should not be interpreted in the abstract but should be construed keeping in mind the whole enactment and the dominant purpose that it may express."
22. The provision of law cannot be simply read as a lifeless piece of an article. The interpretation of a particular provision in the background of its intendment shall smack of vibrancy. A dialectical approach in order to arrive at the correct intendment of the legislature will have to be necessarily adopted by the courts of law, as otherwise the purpose of the enactment itself will be defeated.
23. The Supreme Court in DALCHAND v. MUNICIPAL CORPORATION, BHOPAL (AIR 1983 SC 303) has observed, "There are no ready tests or invariable formulae to determine whether a provision is mandatory or directory. The broad purpose of the statute is important. The object of the particular provision must be considered. The link between the two is most important. The weighing of the consequence of holding a provision to be mandatory or directory is vital and, more often than not, determinative of the very question whether the provision is mandatory or directory. Where the design of the statute is the avoidance or prevention of public mischief, but the enforcement of a particular provision literally to its letter will tend to defeat that design, the provision must be held to be directory, so that proof of prejudice in addition to non-compliance of the provision is necessary to invalidate the act complained of. It is well to remember that quite often many rules, though couched in language which appears to be imperative, are no more than mere instructions to those entrusted with the task of discharging statutory duties for public benefit. The negligence of those to whom public duties are entrusted cannot by statutory interpretation be allowed to promote public mischief and cause public inconvenience and defeat the main object of the statute. It is as well to realise that every prescription of a period within which an act must be done, is not the prescription of a period of limitation, with painful consequences if the act is not done within that period."
24. In the light of the aforesaid observation, if we approach the TNPID Act, we can easily come to the conclusion that section 4(3) should be interpreted to mean a directory direction to the competent authority and not a mandatory one, as otherwise the non-compliance of the aforesaid provision within the time stipulated would simply mock the interest of the public at large for whose benefit the special enactment was legislated.
25. While dealing with section 28A of the Land Acquisition Act, 1894, the Supreme Court in UNION OF INDIA v. HANSOLI DEVI ((2002) 7 SCC 273) has held as follows:-
"It is no doubt true that the object of Section 28-A of the Act was to confer a right of making a reference, (sic on one) who might have not made a reference earlier under Section 18 and, therefore, ordinarily when a person makes a reference under Section 18 but that was dismissed on the ground of delay, he would not get the right of Section 28-A of the Land Acquisition Act when some other person makes a reference and the reference is answered. But Parliament having enacted Section 28-A, as a beneficial provision, it would cause great injustice if a literal interpretation is given to the expression "had not made an application to the Collector under Section 18" in Section 28-A of the Act ... When an application under Section 18 is not entertained on the ground of limitation, the same not fructifying into any reference, then that would not tantamount to an effective application and consequently the rights of such applicant emanating from some other reference being answered to move an application under Section 28-A cannot be denied. We, accordingly answer Question 1(a) by holding that the dismissal of an application seeking reference under Section 18 on the ground of delay would tantamount to not filing an application within the meaning of Section 28-A of the Land Acquisition Act, 1894."
26. So, if literal interpretation results in great hardship and injustice to the public at large, then the relevant provision requires a liberal and dynamic interpretation so as to excuse the inaction to comply with certain stipulations. If we reject the application filed by the competent authority invoking the provision under section 4(3) of the Act, the agony undergone by the depositors will further be aggravated and the last resort also will appear to be classical mirage. Rejecting an application without entertaining the reason assigned for the delay invoking the provision under section 5 of the Limitation Act which was not barred specifically in the special enactment would be a great injustice to the depositors.
27. Interpreting section 13 of the Consumer Protection Act, 1986, the Supreme Court in DR.J.J.MERCHANT v. SHRINATH CHATURVEDI ((2002) 6 SCC 635) has observed that when 30 days time has been originally granted to submit the version of the case of the opposite party and an extended period of not exceeding 15 days also is granted under section 13 of the Consumer Protection Act, 1986, it has to be held that there is a legislative mandate for submitting the written statement within the total period of 45 days. In such circumstances, it has been observed that the question of extending the period further against the intendment of such mandate is not legally permissible. In this case, it is found that no such extended period of limitation is found under section 4(3) of the TNPID Act. Therefore, considering the object of the Act and the fact that there was no extended period of limitation contemplated in the relevant provision of the special statute, the applicability of section 5 of the Limitation Act cannot be ruled out.
28. Learned counsel appearing for the petitioner submitted an authority reported in L.S.SYNTHETICS v. FAIRGROWTH FINANCIAL SERVICES (2004(7) SCALE 427) wherein the Supreme Court has observed in para 37 of the judgment as follows:-
"A proceeding before the Special Court is not a suit for recovery of an amount. The proceedings before the Special Court are extraordinary in nature. Distribution of the assets of a notified person may take a long time but it would bear repetition to state because all the claims filed before the Special Court are disposed of, the property of the notified person stands attached. In other words, the provisions of the Limitation Act would inter alia apply only when a suit is filed or a proceeding is initiated for recovery of an amount and not where a property is required to be applied towards the claims pending before the tribunal for the purpose of discharge of the liabilities of the notified person in terms of Section 11 of the said Act."
29. The said case had arisen under the Special Act for Trial of offences relating to transactions in securities. A plea was set up in the said case that there was a bar of limitation for seeking a direction upon the appellant to pay to the custodian a sum of Rs.34,99,900.68 being the amount the appellant obtained by way of short term loan from the notified party. Rejecting such a plea, the Supreme Court has held that the proceedings before the special Court cannot be equated with a suit for recovery of some amount in a proceeding for distribution of the assets of a notified person. The aforesaid ratio, it is found, has no application to the facts and circumstances of the case.
30. In FAIRGROWTH INVESTMENTS LTD. v. THE CUSTODIAN (2005(1) SUPREME 314), the Supreme Court lays down as follows:-
"We are of the view that it was not necessary for Section 4(2) of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 to use additional peremptory language such as "but not thereafter" or "shall" to mandate that an objection had to be made within 30 days. The mere use of the word "may" in Sections 4(2) of the Act does not indicate that the period prescribed under the Section is merely directory. The word 'may' merely enables or empowers the objector to file an objection."
31. As per section 4(2) of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992, any person aggrieved by a notification issued under sub-section 2 of section 4 may file a petition objecting to the notification within 30 days of the issuance of the notification. In the above case, the aggrieved party had not challenged the aforesaid notification within the time frame of 30 days as stipulated under section 4(2) of the said Act. In such a context, the Supreme Court laid down the law that the provision prescribing time limit for filing petition under section 4(2) of the Act is mandatory in the sense that the period prescribed therein cannot be extended by the court under any inherent jurisdiction of the Special Court.
32. One thing is very clear from the aforesaid ratio laid down by the Supreme Court that even in a case where the word "may" is used, it may imply a mandatory direction. But, the facts of the aforesaid case is found distinguishable. When the objection to a notification is supposed to be filed within a particular time frame, it has been held that such a direction is mandatory. But, here is a case where ad interim attachment is sought to be made absolute in the interest of the appalling depositors for the distribution of the property to redress their grievance. Further, the object and scheme of the TNPID Act persuades this court to take a decision that even though the word "shall" has been used in section 4(3) of the said Act, it would only mean a directory direction, as otherwise, the public interest will be the casualty.
33. It is very pertinent to refer to the following observation of the Supreme Court in UNION OF INDIA v. M/s.POPULAR CONSTRUCTION CO (AIR 2001 SUPREME COURT 4010):-
"Had the proviso to Section 34 merely provided for a period within which the Court could exercise its discretion, that would not have been sufficient to exclude Sections 4 to 24 of the Limitation Act because "mere provision of a period of limitation in howsoever peremptory or imperative language is not sufficient to displace the applicability of Section 5."
That is an extreme case where it has been held that even if there is peremptory or imperative language used in a particular section while prescribing the period of limitation that is not sufficient to exclude sections 4 to 24 of the Limitation Act.
34. This court in ASHOK v. COMPETENT AUTHORITY & DISTRICT REVENUE OFFICER ((2006) 4 MLJ 714) has held referring to the decision in MANGU RAM v. MUNICIPAL CORPORATION OF DELHI (AIR 1976 SC 105) that the provision of section 5 of the Limitation Act is applicable to any special law or local law unless they are excluded in express and specific terms. I may add here that even by implication the exclusion is found writ large under the scheme of the Special Act, the provisions of section 5 of the Limitation Act can very well be excluded.
35. To sum up, the word "shall" in all occasions does not mean a mandatory direction. Likewise, the word "may" does not imply a directory direction alone. It may mean a mandatory direction also. If an extended period of limitation is found in the Special Act, or by implication the provision of section 5 of the Limitation Act is excluded, the said provision cannot be applied to the Special Act. To arrive at a conclusion whether the provision under section 5 of the Limitation Act is applicable to the Special Act, the entire object and scheme of the Special Act will have to be looked into to find whether non-applicability of section 5 of the Limitation Act would cause great hardship and injustice to the party concerned. In this case, considering the beneficial special statute and the injustice that may be occasioned to the innocent depositors, who lost their hard earned money, the time frame prescribed under section 4(3) of the Act will have to be construed only as directory in nature and not mandatory. Therefore, it is held that section 5 of the Limitation Act would apply to the provision under section 4(3) of the TNPID Act.
36. As far as the delay of 189 days occasioned in preferring an application under section 4(3) of the Act by the competent authority is concerned, it is found that the competent authority has examined the Inspector of Police and recorded his statement. He had also collected documents from the District Registrar's Office and other offices beforeever he preferred an application seeking to make the interim order of attachment absolute. Therefore, the competent authority has satisfactorily explained the delay of 189 days that has occasioned on account of the enquiry he had embarked upon beforeever he moved an application under section 4(3) of the TNPID Act. The delay of 189 day has also been properly explained by him.
37. In view of the above, the court holds that the Trial Court has passed a well considered order taking into account the object of the Act. There is no warrant for interference therewith. Therefore, the appeal stands dismissed. The connected Miscellaneous Petitions also stand dismissed.
1.4.2008.
Index: Yes.
Internet: Yes.
ssk.
To
1. The Special Court under Tamil Nadu Protection of Interest of Depositors (in Financial Establishments) Act, 1997, Chennai.
2. The Competent Authority and Additional Commissioner (Cinema & Irrigation), Land Admn. Department, Chepauk, Chennai-5.
M.JEYAPAUL, J.
ssk.
P.D. JUDGMENT IN Crl.A.No.504/2005 Delivered on 1.4.2008.