Supreme Court upholds Orissa and Bihar Special Courts Acts for corruption cases, strikes down Rule 12 summary procedure

The SC upheld the constitutionality of the Orissa Special Courts Act, 2006 and Bihar Special Courts Act, 2009, which establish special courts for prosecuting public servants in corruption cases. The Court found that provisions for property confiscation, declaration procedures, and appeal mechanisms do not violate Articles 14, 20(1), 20(3), 21, 199, or 247 of the Constitution. However, the Court struck down portions of Rule 12 of the 2010 Rules prescribing summary procedure as ultra vires the Bihar Act, which mandates warrant procedure. Appeals challenging the Orissa HC judgment were dismissed, while appeals against the Patna HC were partially allowed.

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Issues Involved:
1. Constitutionality of the Orissa Special Courts Act, 2006 and the Bihar Special Courts Act, 2009.
2. Validity of the declaration and effect of declaration under Sections 5 and 6 of the Orissa Act.
3. Confiscation of property under Chapter III of the Orissa Act.
4. Appeal provisions under Section 17 of the Orissa Act.
5. Proviso to Section 18(1) of the Orissa Act.
6. Section 19 of the Orissa Act regarding refund of confiscated property.
7. Validity of Rule 12 of the Bihar Special Courts Rules, 2010.

Detailed Analysis:

1. Constitutionality of the Orissa Special Courts Act, 2006 and the Bihar Special Courts Act, 2009:
The Supreme Court upheld the constitutionality of both the Orissa Special Courts Act, 2006, and the Bihar Special Courts Act, 2009. The Court found that these Acts were not in violation of Article 199 of the Constitution and did not contravene Article 247. The Court emphasized that the establishment of Special Courts for the trial of certain offences was within the legislative competence of the State legislatures, especially after obtaining the President's assent under Article 254(2).

2. Validity of the Declaration and Effect of Declaration under Sections 5 and 6 of the Orissa Act:
Sections 5 and 6 of the Orissa Act, which deal with the declaration of cases to be dealt with under the Act and the effect of such declarations, were scrutinized for potential arbitrariness. The Court held that the provisions were constitutionally valid as they did not confer unbridled discretion on the State Government. The State Government is only required to form a prima facie opinion that an offence under Section 13(1)(e) of the Prevention of Corruption Act, 1988, has been committed by a person holding high public or political office.

3. Confiscation of Property under Chapter III of the Orissa Act:
The provisions for confiscation of property under Chapter III of the Orissa Act were challenged on the grounds of violating Articles 14, 20(2), and 21 of the Constitution. The Court upheld these provisions, stating that confiscation is not a punishment but an interim measure to prevent the enjoyment of ill-gotten gains during the trial. The procedure for confiscation provided adequate safeguards and was not arbitrary.

4. Appeal Provisions under Section 17 of the Orissa Act:
Section 17(3) of the Orissa Act, which limits the duration of stay orders in appeals, was challenged. The Court interpreted this provision to mean that while the appeal should ideally be disposed of within the prescribed period, the High Court retains the power to extend the stay order if justified. This interpretation was necessary to save the provision from being unconstitutional.

5. Proviso to Section 18(1) of the Orissa Act:
The proviso to Section 18(1) allows the person affected to remain in possession of the confiscated property for a limited period on payment of market rent. The Court held that this proviso does not violate Article 21 of the Constitution, as it provides a reasonable protection to the affected person while ensuring that the property acquired through illegal means is not enjoyed indefinitely.

6. Section 19 of the Orissa Act Regarding Refund of Confiscated Property:
Section 19, which deals with the refund of confiscated property if the order of confiscation is annulled or the person is acquitted, was challenged for being confiscatory. The Court held that the provision is valid, provided it is interpreted to mean that the State must demonstrate a real and acceptable reason for not returning the property. The compensation provided (value of the property with 5% interest) was deemed reasonable.

7. Validity of Rule 12 of the Bihar Special Courts Rules, 2010:
Rule 12, which prescribes a summary procedure for trials, was found to be ultra vires the Bihar Act, as the Act itself mandates the procedure for warrant cases. The Court declared this part of the rule invalid as it conflicted with the statutory provisions of the Bihar Act.

Conclusion:
The Supreme Court upheld the constitutional validity of the Orissa Special Courts Act, 2006, and the Bihar Special Courts Act, 2009, with certain interpretations to ensure compliance with constitutional provisions. The provisions for confiscation of property, appeal, and refund of confiscated property were found to be valid, subject to specific interpretations to avoid arbitrariness and ensure fairness. Rule 12 of the Bihar Special Courts Rules, 2010, was declared ultra vires to the extent it prescribed a summary procedure for trials.

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