Kerala High Court
Mac Charles (India) Limited vs State Of Kerala on 16 September, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI
THURSDAY, THE 16TH DAY OF SEPTEMBER 2021 / 25TH BHADRA, 1943
CRL.MC NO. 3193 OF 2021
AGAINST THE ORDER DATED 30.11.2018 IN CRL.M.P.NO.36/2015 IN
IN CC NO. 2/2014 OF ENQUIRY COMMISSIONER& SPECIAL JUDGE,
THRISSUR
PETITIONER/RESPONDENT:
M/S.MAC CHARLES (INDIA) LIMITED
NO.28, SANKEY ROAD, BANGALORE-560052, REPRESENTED
BY ITS OPERATIONS MANAGER, MR. SARTAJ SEWA SINGH.
BY ADVS.
B.RAMAN PILLAI (SR.)
R.ANIL
M.SUNILKUMAR
SUJESH MENON V.B.
T.ANIL KUMAR
THOMAS ABRAHAM (NILACKAPPILLIL)
MAHESH BHANU S.
S.LAKSHMI SANKAR
RESPONDENT/COMPLAINANT:
STATE OF KERALA
REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT
OF KERALA, ERNAKULAM, KOCHI-682031.
BY ADV SMT.REKHA.S, SR.P.P.
THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON
01.09.2021, THE COURT ON 16.09.2021 DELIVERED THE FOLLOWING:
Crl.M.C.No.3193/2021
2
"CR"
R.NARAYANA PISHARADI, J
**********************
Crl.M.C.No.3193 of 2021
-------------------------------------
Dated this the 16th day of September, 2021
-------------------------------------------
ORDER
This is a petition filed under Section 482 of the Code of Criminal Procedure, 1973 (for short 'the Code'), challenging Annexure-14 order passed by the Court of the Enquiry Commissioner and Special Judge, Thrissur in the case C.C.No.2/2014 pending in that court.
2. The petitioner is a company registered under the Companies Act, 1956.
3. One Rajendra Prasad @ Anwar Ali is the accused in the case C.C.No.2/2014 pending in the Special Court. He had served as Regional Transport Officer in the Motor Vehicles Department. The allegation against him in the above case is that, during the Crl.M.C.No.3193/2021 3 period from 01.01.1993 to 24.03.2006, he acquired and possessed assets worth Rs.2,52,71,605.97/- which was disproportionate and 96.96% in excess of his known sources of income and that he committed an offence punishable under Section 13(1)(e) read with 13(2) of the Prevention of Corruption Act, 1988 (for short 'the Act')
4. The F.I.R in the above case was registered against the accused by the Vigilance and Anti-Corruption Bureau (VACB) on 23.03.2006.
5. As per Annexure-1 document dated 27.04.2006, the petitioner purchased 15 cents of land, with a residential building therein (hereinafter referred to as 'the schedule property'), from the wife of the accused in the above case, for a consideration of Rs.1,28,00,000/-.
6. The State Government issued Annexure-3 order dated 05.02.2010, authorising the investigating officer in the above case to file a report and affidavit before the District Judge, Ernakulam under the Criminal Law Amendment Ordinance, 1944 (hereinafter referred to as 'the Ordinance') for attachment of the Crl.M.C.No.3193/2021 4 schedule property.
7. The investigating officer filed Annexure-4 application under Section 3(1) of the Ordinance in the District Court, Ernakulam on 25.08.2010 for attachment of the schedule property. As per the order of the District Court, the aforesaid property was attached. The period of attachment of the schedule property was subsequently extended till the date 31.12.2013.
8. The investigating officer filed Annexure-5 application before the District Court, Ernakulam for extension of the period of attachment of the schedule property from 31.12.2013.
9. As per Annexure-6 order dated 15.10.2014, the District Court, Ernakulam dismissed Annexure-5 application for the reason that final report against the accused in the case had already been filed in the Court of the Enquiry Commissioner and Special Judge, Thrissur on 02.11.2013 and it was the Special Court which was competent to deal with the matter.
10. On 04.02.2015, the petitioner filed Annexure-7 application in the District Court, Ernakulam praying that lifting of the attachment over the schedule property may be intimated to Crl.M.C.No.3193/2021 5 the office of the Sub Registrar concerned since there was no attachment in force.
11. As per Annexure-8 order dated 28.02.2015, the District Court, Ernakulam found that there was no order of attachment in force in respect of the schedule property and therefore, allowed Annexure-7 application. The District Court directed that lifting of the attachment over the schedule property shall be intimated to the office of the Sub Registrar concerned.
12. On 23.02.2015, the investigating officer filed Annexure-9 application under Section 3(1) of the Ordinance in the Court of the Enquiry Commissioner and Special Judge, Thrissur for attachment of five items of properties including the schedule property.
13. As per Annexure-10 order dated 16.12.2015, the Special Court allowed Annexure-9 application and ordered attachment of all the five items of properties including the schedule property.
14. The petitioner filed Crl.M.C No. 2776/2018 before this Court challenging Annexure-10 order passed by the Special Crl.M.C.No.3193/2021 6 Court.
15. As per Annexure-11 order dated 11.06.2018 in Crl.M.C No. 2776/2018, this Court set aside Annexure-10 order as far as it related to the schedule property and directed the Special Court to pass fresh order in Annexure-9 application after giving an opportunity of hearing to the petitioner.
16. However, the investigating officer filed Annexure-12 application in the Special Court on 02.07.2018 for regularisation of the attachment over the schedule property, after issuing notice to the petitioner.
17. The petitioner filed Annexure-13 statement of objection to Annexure-12 application.
18. As per Annexure-14 order dated 30.11.2018, the Special Court allowed Annexure-9 application and ordered attachment of the schedule property. The aforesaid order is challenged in this petition filed under Section 482 of the Code.
19. Heard the learned senior counsel for the petitioner and the learned Public Prosecutor.
20. Learned senior counsel for the petitioner contended Crl.M.C.No.3193/2021 7 that Annexure-9 application filed for attachment of the schedule property was defective because no affidavit was filed in the Special Court, as contemplated under Section 3(3) of the Ordinance, accompanying that application. Learned senior counsel also contended that the schedule property belonged to the petitioner, who is not an accused in the case and therefore, the provisions of Section 6 of the Ordinance are applicable for considering whether that property is liable to be attached. Learned senior counsel also contended that, the Special Court failed to consider whether there were sufficient grounds as stipulated under Section 6 of the Ordinance to order attachment of the schedule property.
21. During the hearing of the case, this Court had made a specific query to the learned Public Prosecutor, whether any affidavit, as contemplated under Section 3(3) of the Ordinance, had been filed by the investigating officer along with Annexure-9 application. Learned Public Prosecutor submitted that no such affidavit had been filed by the investigating officer. Crl.M.C.No.3193/2021 8
22. The Criminal Law Amendment Ordinance, 1944 was promulgated to prevent disposal or concealment of property procured by means of the offences specified in its Schedule, which now include an offence under the Prevention of Corruption Act, 1988. The Ordinance sets out the procedure for attachment of money or other property which the Central/State Government believes that the person, who is accused of a scheduled offence, has procured by means of such offence.
23. The Ordinance is one of the earliest legal measures implemented to take away the ill-gotten wealth of public servants who engage in corrupt practices. The Ordinance is a permanent one. It was promulgated in exercise of the powers conferred under Section 72 of the Ninth Schedule of the Government of India Act, 1935. It was adopted by the Presidential Adaptation of Laws Order, 1950 issued under the powers conferred by Clause (2) of Article 372 of the Constitution of India, thus, making it effective in the territory of India and, therefore, continues to remain in force (See Nevada Properties Private Limited v. State of Maharashtra : AIR 2019 SC 4554). Crl.M.C.No.3193/2021 9
24. Section 3(1) of the Ordinance provides that, where the State Government or as the case may be, the Central Government has reason to believe that any person has committed any scheduled offence, the Government may, whether or not any court has taken cognizance of the offence, authorise the making of an application to the District Judge within the local limits of whose jurisdiction, the said person ordinarily resides or carries on business, for the attachment of any money or other property, which the Government believes the said person to have procured by means of such offence. It also provides that, if such money or property cannot for any reason be attached, prayer can be made for attachment of other property of the said person of the value as nearly as may be equivalent thereto.
25. Sub-section (3) of Section 3 of the Ordinance mandates that, the application shall be accompanied by one or more affidavits stating the grounds on which the belief that the said person has committed any schedule offence is founded, and the amount of money or value of other property believed to have been procured by means of the offence. The application shall also Crl.M.C.No.3193/2021 10 furnish - (a) any information available as to the location for the time being of any such money or other property, and shall, if necessary, give particulars, including the estimated value, of other property of the said person; (b) the names and addresses of any other persons believed to have or to be likely to claim, any interest or title in the property of the said person.
26. By virtue of sub-section (2) of Section 3 of the Ordinance, the provisions of Order XXVII of the First Schedule to the Code of Civil Procedure, 1908, apply to the proceedings for an order of attachment under the Ordinance as they apply to suits by the Government.
27. Section 4 of the Ordinance deals with ad interim attachment of property by the jurisdictional District Judge. Section 5 of the Ordinance deals with investigation of objections to attachment and making the attachment absolute and withdrawing of the attachment.
28. Section 6 of the Ordinance deals with attachment of property of mala fide transferees. This provision reads as hereunder:
Crl.M.C.No.3193/202111
"6. Attachment of property of mala fide transferees.---(1) Where the assets available for attachment of a person believed to have committed a scheduled offence are found to be less than the amount or value which he is believed to have procured by means of such offence, and where the District Judge is satisfied by affidavit or otherwise, that there is reasonable cause for believing that the said person has, after the date on which the offence is alleged to have been committed, transferred (whether after the commencement of this Ordinance or not) any of his property otherwise than in good faith and for consideration, the District Judge may by notice require any transferee of such property (whether or not received the property directly from the said person) to appear on a date to be specified in the notice and show cause why so much of the transferee's property as is equivalent to the proper value of the property transferred should not be attached.
(2) Where the said transferee does not appear and show cause on the specified date, or where after investigation in the manner provided in sub-section (2) of Section 5, the District Judge is satisfied that the transfer of the property to the said transferee was not in good faith and for Crl.M.C.No.3193/2021 12 consideration, the District Judge shall order the attachment of so much of the said transferee's property as is in the opinion of the District Judge equivalent to the proper value of the property transferred".
29. Sub-section (6) of Section 5 of the Act provides that, a Special Judge, while trying an offence punishable under the Act, shall exercise all the powers and functions exercisable by a District Judge under the Ordinance.
30. A new Chapter IVA, containing Section 18A, has been inserted in the Act, by Amendment Act 16 of 2018 and it has come into force from 26.07.2018.
31. Section 18A(1) of the Act provides that, save as otherwise provided under the Prevention of Money Laundering Act, 2002, the provisions of the Ordinance shall, as far as may be, apply to the attachment, administration of attached property and execution of order of attachment or confiscation of money or property procured by means of offence under the Act.
32. Section 18A(2) of the Act states that, for the purposes of the Act, the provisions of the Ordinance shall have effect, Crl.M.C.No.3193/2021 13 subject to the modification that the reference to "District Judge"
shall be construed as reference to "Special Judge".
33. A Division Bench of this Court, in Dr.V.K.Rajan v. State of Kerala : 2007 (4) KHC 828, had occasion to interpret the provision contained in sub-section (6) of Section 5 of the Act. The Division Bench took note of the expression 'while trying the offence' in that provision and held that the Special Court can exercise the jurisdiction of the District Court under the Ordinance only after starting the trial of the case against the accused and that the Legislature empowered the Special Judge to exercise the power of District Judge for attachment of the property 'while trying the offence' only and not at the pre-trial or post-trial stage. It was held that, before starting of the trial, the application for attachment shall be submitted to the District Judge concerned since the power of attachment under the Ordinance is given to the Special Judge under Section 5(6) of the Act only 'while trying' the case and not during pre-trial stage or investigation stage.
34. Now, after the introduction of Section 18A(2) in the Act, it appears that the dichotomy of jurisdiction of the District Judge Crl.M.C.No.3193/2021 14 and the Special Judge, which was explained by the Division Bench in Dr.V.K.Rajan (supra), has disappeared. The Division Bench had noticed that, in Section 29 of the Act it was not mentioned that the words 'District Court' wherever appear in the Ordinance shall be substituted by 'Special Court'. The change now occurred by the introduction of Section 18A(2) in the Act is exactly what the Division Bench had referred to above. Section 18A(2) of the Act states that, for the purposes of the Act, the provisions of the Ordinance shall have effect, subject to the modification that the reference to "District Judge" shall be construed as reference to "Special Judge". Therefore, the expression 'while trying the offence' in Section 5(6) of the Act stands expanded by the words "for the purposes of this Act"
contained in Section 18A of the Act. It means that, with effect from 26.07.2018, even at the pre-trial stage, the Special Court has jurisdiction to entertain an application under Section 3(1) of the Ordinance.
35. Now, coming to the facts of the present case, it is to be noted that the investigating officer filed Annexure-12 Crl.M.C.No.3193/2021 15 application in the Special Court for regularisation of the attachment over the schedule property. When the investigating officer filed that application, the attachment over the schedule property was not in force since Annexure-10 order of attachment passed by the Special Court in respect of that property had been set aside by this Court as per Annexure-11 order.
36. The operative portion of Annexure-11 order passed by this Court reads as follows:
"In the result, this Crl.M.C stands allowed and Annexure-J order stands set aside to the extent it affects the properties of the petitioner. The court below is directed to pass order afresh on Crl.M.P.No.316 of 2015 in respect of the properties of the petitioner, in accordance with law, affording reasonable opportunity to the petitioner of being heard.
I make it clear that the petitioner shall be at liberty to raise all his contentions before the court below. If the petitioner raises contentions before the court below, the court below shall consider all the said contentions in accordance with law."
37. Annexure-9 application is the application which is referred to as Crl.M.P.No.316 of 2015 in the above order. It is Crl.M.C.No.3193/2021 16 crystal clear from Annexure-11 order that the attachment of the schedule property was set aside by this Court. Therefore, when the investigating officer filed Annexure-12 application for regularisation of attachment, no such attachment was in force. Therefore, there was also no question of regularisation of any such attachment. Annexure-12 application filed by the investigating officer was totally misconceived.
38. The specific direction given by this Court, as per Annexure-11 order, to the Special Court was to pass fresh order in Annexure-9 application after giving opportunity of hearing to the petitioner. Annexure--9 was an application filed by the investigating officer under Section 3(1) of the Ordinance. It was not an application filed for extending the period of attachment. The reason is that the attachment of the schedule property earlier ordered by the District Court was not in force at the time of filing Annexure-9 application. While passing Annexure-8 order, the District Court had made it clear that no order of attachment was in force.
39. Learned senior counsel for the petitioner would Crl.M.C.No.3193/2021 17 contend that, when the property of the accused is sought to be attached, the application has to be filed under Section 3(1) of the Ordinance and when the property of a transferee is to be attached, application has to be filed under Section 6 of the Ordinance. Learned senior counsel would contend that, when the property has been transferred to another person, Section 6 of the Ordinance applies and then the investigating officer has to file application under Section 6 of the Ordinance for attachment of that property.
40. There is no merit in the above contention. There is only one provision in the Ordinance for making application for attachment of property and it is Section 3(1). Section 6 of the Ordinance does not contemplate filing of any application for attachment.
41. Section 3(1) of the Ordinance contemplates filing of application for attachment of two types of properties, namely, (1) money or other property procured by the accused person by means of the scheduled offence and (2) if such money or other property cannot be attached, other property of the accused, of Crl.M.C.No.3193/2021 18 value as nearly as may be equivalent thereto. The first item of property mentioned above may also include property in the hands of a transferee. Necessarily, the second item mentioned above shall be the property of the accused person himself.
42. However, when it is specifically alleged by the investigating officer that the property liable to be attached is a property transferred by the accused person otherwise than in good faith and for consideration, Section 6 of the Ordinance comes into play. Even then, the application for attachment has to be filed under Section 3(1) of the Ordinance.
43. Section 6(1) of the Ordinance contemplates issuing notice to the transferee to show cause why his property shall not be attached. Section 6(2) of the Ordinance would show that, when the transferee appears and shows cause, an investigation in the manner provided in Section 5(2) of the Ordinance shall be made. Thereafter, if the District Judge or the Special Judge is satisfied that the transfer of the property to the transferee was not in good faith and for consideration, then only attachment of property under Section 6(2) of the Ordinance can be ordered. Crl.M.C.No.3193/2021 19
44. Admittedly, Annexure-9 application filed before the Special Court under Section 3(1) of the Ordinance was not accompanied by any affidavit as enjoined by Section 3(3) of the Ordinance.
45. The Special Court, in the impugned order, referred to the contention raised by the petitioner that the application for attachment was defective for want of affidavit. However, the Special Court failed to consider the objection raised by the petitioner as to the maintainability of the application for attachment filed without an affidavit accompanying it.
46. Filing of affidavit, accompanying an application for attachment under Section 3(1) of the Ordinance, cannot be considered as an empty formality. Sub-section (3) of Section 3 of the Ordinance specifically states that application under sub-section (1) shall be accompanied by affidavit. Such affidavit shall state the grounds on which the belief that the accused has committed any scheduled offence is founded. It shall also state the amount of money or the value of other property believed to have been procured by means of the offence. Very often, the Crl.M.C.No.3193/2021 20 District Judge or the Special Judge will have to rely upon the averments in the affidavit to pass an ad interim order of attachment under Section 4(1) of the Ordinance. The proviso to Section 4(1) of the Ordinance states that, before passing any order of ad interim attachment, the District Judge or the Special Judge may examine the person who filed the affidavit. If the District Judge or the Special Judge refuses to pass an ad interim order of attachment, it is mandatory that, before passing such order, he shall examine the person who has filed the affidavit.
47. It is settled law that, where a statute prescribes a thing to be done in a particular manner, it has to be done in that manner and in no other manner. Other methods of performance are necessarily forbidden.
48. Having found the need and necessity of filing affidavit as enjoined under Section 3(3) of the Ordinance, the conclusion is irresistible that, Annexure-9 application filed without such an affidavit, was not maintainable. The Special Court should not have entertained Annexure-9 application which was filed without any accompanying affidavit.
Crl.M.C.No.3193/202121
49. Annexure-9 application was defective for another reason. It was filed not by the person who was specifically authorised by the Government to file it. Annexure-3 is the copy of the government order authorising the investigating officer to file application under Section 3(1) of the Ordinance for attachment of the schedule property. The last paragraph of Annexure-3 order reads as follows:
"Government have examined the matter in detail, and authorize Shri.T.M.Varghese, the Investigating Officer, to file a report and affidavit before the District Judge, Ernakulam, under the Criminal Law Amendment Ordinance 1944 for the attachment of 15 cents of land in Survey No.379/10 and 380/01 of Maradu Village along with Building having a plinth area of 3,500 ft 2 bearing No.VI/419/E of Maradu Grama Panchayat, purchased by the Accused Shri R.Rajendraprasad, Deputy Transport Commissioner in the name of his wife Smt.Usha Prasad."
Annexure-9 application was filed not by Sri.T.M.Varghese, who was specifically authorised by Annexure-A3 order, to file it. Annexure-9 application was filed by another investigating officer. Crl.M.C.No.3193/2021 22 He was not a person authorised by the Government to do so. Annexure-3 order passed by the Government was not a general authorisation to file application under Section 3(1) of the Ordinance. It specifically authorised a named person to file the application. Only the person named in Annexure-3 government order had authority to file the application under Section 3(1) of the Ordinance. For this reason also, Annexure-9 application filed in the Special Court was not maintainable.
50. The above view is supported by the decision of the Bombay High Court in State of Maharashtra v. Trambak Ananda Mahajan (1988 (1) Crimes 42).
51. After the dismissal of Annexure-5 application by the District Court as per Annexure-6 order, if the investigating officer wanted to file a fresh application for attachment in the Special Court, he should have obtained authorisation from the Government since he was not the person authorised by the Government as per Annexure-3 government order to file the application.
52. The discussion above leads to the conclusion that Crl.M.C.No.3193/2021 23 Annexure-9 application filed in the Special Court was defective and it was not maintainable for two reasons. (1) The application was not accompanied by any affidavit as enjoined under Section 3(3) of the Ordinance. (2) The application filed was by a person who was not authorised by the Government under Section 3(1) of the Ordinance.
53. It follows that, Annexure-14 order passed by the Special Court on Annexure-9 application, is not sustainable under law and it is liable to be set aside.
54. Consequently, the petition is allowed. Annexure-14 order passed by the Special Court is set aside and Annexure-9 application is dismissed. The investigating officer is at liberty to file fresh application in the Special Court for attachment of property in accordance with law.
(sd/-) R.NARAYANA PISHARADI, JUDGE jsr Crl.M.C.No.3193/2021 24 APPENDIX OF CRL.MC 3193/2021 PETITIONER'S ANNEXURES Annexure 1 TRUE COPY OF THE SALE DEED NO.2130 OF 2006 OF MARADU SRO. Annexure 2 TRUE COPY OF O.P.(MISC) NO.428 OF 2007 OF THE DISTRICT COURT ERNAKULAM. Annexure 3 TRUE COPY OF THE GOVERNMENT ORDER G.O.
(RT) NO.17/2010/VIG, THIRUVANANTHAPURAM DATED 5.2.2010.
Annexure 4 TRUE COPY OF THE I.A.NO.1370 OF 2010 IN OP (MISC) 428 OF 2007.
Annexure 5 TRUE COPY OF I.A.NO.5511/2013 FILED BY THE INVESTIGATION OFFICER.
Annexure 6 TRUE COPY OF ORDER DATED 15.10.2014 IN I.A.5511 OF 2013 OF THE DISTRICT COURT, ERNAKULAM.
Annexure 7 TRUE COPY OF I.A.NO.643 OF 2015 IN I.A.NO.5511 OF 2013 IN O.P.(MSC) 428 OF 2017 BY THE PETITIONER.
Annexure 8 THE TRUE COPY OF ORDER DATED 28.2.2015 IN I.A.NO.643 OF 2015 IN I.A.NO.5511 OF 2013 IN O.P. (MISC) 428 OF 2017 OF DISTRICT COURT, ERNAKULAM.
Annexure 9 TRUE COPY OF CRL. M.P.NO.316 OF 2015 IN C.C.NO.2/2014 OF THE COURT OF ENQUIRY COMMISSIONER AND SPECIAL JUDGE, THRISSUR.
Crl.M.C.No.3193/202125 Annexure 10 TRUE COPY OF ORDER DATED 16.12.2015 IN CRL.M.P.NO.316 OF 2015 IN C.C.NO.2 OF 2014 OF THE COURT OF ENQUIRY COMMISSIONER AND SPECIAL JUDGE, THRISSUR.
Annexure 11 TRUE COPY OF THE JUDGMENT DATED 11.6.2018 IN CRL.M.C.NO.2776 OF 2018 OF THIS HON'BLE COURT.
Annexure 12 TRUE COPY OF CRL.M.P.NO.551 OF 2018 FILED BEFORE THE COURT OF ENQUIRY COMMISSIONER AND SPECIAL JUDGE, THRISSUR.
Annexure 13 TRUE COPY OF THE STATEMENT OF OBJECTION DATED 4.8.2018 FILED BY THE PETITIONER.
Annexure 14 TRUE COPY OF THE ORDER DATED 30.11.2018 IN CRL.M.P.NO.316 OF 2015 OF THE ENQUIRY COMMISSIONER AND SPECIAL JUDGE, THRISSUR.
Annexure 15 TRUE COPY OF THE ORDER DATED 25.9.2014 IN CRL.M.P.NO.1035 OF 2014 IN C.C.NO.2 OF 2014, THE COURT OF ENQUIRY COMMISSIONER AND SPECIAL JUDGE, THRISSUR.
Annexure 16 TRUE COPY OF THE ORDER DATED 11.8.2020 IN CRL.M.P.NO.667 OF 2019 IN CC NO.2 OF 2014, THE COURT OF ENQUIRY COMMISSIONER AND SPECIAL JUDGE, THRISSUR.
RESPONDENT'S EXHIBITS: NIL TRUE COPY PS TO JUDGE