TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1193
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.... credit facilities together with interest, costs, charges, etc. equitable mortgage was created and first and exclusive charge of land in favour of appellant by way of deposit of title deeds in respect of the immovable property located at Chilamathur Village & Mandal, Anantpur District standing in the name of M/s. Lepakshi Knowledge Hub Private Limited ("Mortgagor") (hereinafter referred to as "the mortgaged property"). 6. The mortgaged property was a part and parcel of land sold by Andhra Pradesh Industrial Infrastructure Corporation Limited ("APIIC") to the Mortgager for certain specific purposes as agreed between the APIIC and the Mortgagor. 7. APIIC had issued a NOC dated 5th September, 2009 in favour of the Mortgagor whereby APIIC specifically granted it's „No Objection' to the Mortgagor to deposit the title deeds of the lands allotted by APIIC to secure the repayment of credit facility to be availed by the Borrower and thereby to procure loans from banks and financial institutions. 8. In consideration of the Appellant granting the said credit facilities, the Mortgagor and Mr. Syam Prasad Reddy (hereinafter referred to as "Guarantors") executed guarantees for guarantee....
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....the appellant about the provisional attachment order dated 25th March 2015, the Appellant filed its representation under Section 8 of the Act dated 23rd June 2015 before the Respondent No.2 by filing of the Appellant's Application) as a Secured Creditor of the Borrower disclosing the facts in detail and requested for a hearing before any order is passed including confirming the Order of attachment. 15. The Appellant by letter of 18th May 2015 had informed the Andhra Pradesh Infrastructure Corporation Ltd. and the Enforcement Directorate of the charge on the property in question of the Appellant and also the appointment of the Court Receiver, High Court, Bombay. It was also informed that the Court Receiver had taken symbolic/formal possession of the property on 6th February 2015. These facts were also communicated earlier vide letter of 5th August 2014 to the then lawyers of the Appellant. 16. It is the case of the appellant that on 8th June 2015, the Appellant tried to file the representation in Delhi before the office of Adjudicating Authority but it was informed to the Appellant that they are required to submit the said representation before ED at Hyderabad who in turn will giv....
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....une 2015 was sent to the Adjudicating Authority. However, the Appellant was asked to file the same in the office of the Enforcement Directorate at Hyderabad as the final attachment order dated 24th July 2015 had already been passed. This contention is not disputed. 22. In view thereof, the Appellant filed an Application under section 8(2) of the Act as a Secured Creditor of the Borrower on various grounds. On 21st July 2016 Respondent No.2 passed the impugned order rejecting the said Application. The main reasons given in the impugned order are mentioned in para 20 & 21 and the same are reproduced herein under:- 20. As has been observed in the order dated 24.07.2015 itself in the findings which is reproduced herein above (at page no. 9 & 10), it is concluded in Para 23 as quoted "23. PMLA, Appellate Tribunal has upheld that the claim of mortgagee is at best an encumbrance on the property and provisions of Section 71 of the PMLA have overriding effect". Further to quote "26. Provisions of Section 71 have overriding effect." Thus the claim of the Applicant is at best an encumbrance on the property. By virtue of the provisions of the Act, the said property being the proceeds of cr....
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....23. Being aggrieved by the impugned order dated 21st July, 2016 the appellant filed the present appeal interalia on various grounds. We have gone through the same. It is necessary to refer certain share admitted facts in the matter. 24. It is admitted position that the appellant alongwith affidavit dated 12th January, 2016 its representative referred all facts before the Adjudicating Authority about the service of the letter dated 23rd June, 2015 but the respondent no. 2 did not accept the contention of the appellant. 25. The Respondent No. 2 despite of having the knowledge of the adjudication the Appellant chose not to make an application directly to the Adjudicating Authority without appreciating the fact that when the representation was made on 23rd June 2015 to the Adjudicating Authority reject the same. While reading paragraph 11 page 31 of the impugned order the impression was given by the Enforcement Directorate that he not aware of the symbolic possession resting with the Court Receiver, High Court Bombay and the same could therefore not have been taken into account. The said findings are correct in the letter dated 18th May, 2015 which is served upon the Enforcement Dire....
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....the symbolic possession of the Court Receiver, absence of such knowledge entitles the Enforcement Directorate to attach the property in question. On the date of passing the confirmation order dated 24th July, 2015 both ED and Adjudicating Authority were deemed aware that the Bombay High Court has already passed the order of appointment of Receiver and the properties were in the physical possession of the court receiver. Even, on the date of hearing the application, the date of decision, the date of filing of an appeal and the date of passing the present judgment, it is matter of fact that the physical possession of the same very property was/is with the Court Receiver. No one has a right to give different meaning of the orders passed by the Courts. 30. The Respondent no. 2 has wrongly come to the conclusion that as per the provisions of the Act, despite the Court Receiver being appointed by the Hon'ble High Court and the property being Custodia Legis, the Enforcement Directorate was entitled to attach the said property without following the principles laid down by Supreme Court in the case of Kanhaiyalal V. Dr. D.R. banaji and others [1959 SCR 333: AIR 1958 SC 725]. It is settled ....
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....the suit had been instituted for the declaration that the sale by the revenue courts was illegal. The plaint was subsequently amended by adding the relief for recovery of possession, „because in the meanwhile, the auction-purchaser had obtained delivery of possession of the property through the revenue authorities, some time in 1940. The general rule that property in custodia legis through its duly! appointed Receiver is exempt from judicial process except to the extent that the leave of that court has been obtained, is based on a very sound reason of public policy, namely, that there should be no conflict of jurisdiction between different Courts. If a court has exercised its power to appoint a Receiver of a certain property, it has done so with a view to preserving the property for the benefit of the rightful owner as judicially determined. If other Courts or Tribunals of co-ordinate or exclusive jurisdiction were to permit proceedings to go on independently of the Court which has placed the custody of the property in the hands of the Receiver, there was a likelihood of confusion in the administration of justice and a possible conflict of jurisdiction. The Courts represent t....
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....iew of the judgment of the Supreme Court permission of the Court in the absence of the knowledge of the said orders appointing Court Receiver and/or of the fact that the Court Receiver is in possession of the mortgaged property, cannot be the basis of confirming the provisional attachment. In any case, on 24th July 2015, as the Appellant had already put the Adjudicating Authority to the notice of their rights in the mortgaged property, the order of Bombay High Court appointing Court Receiver and also the fact that the Court Receiver was already in the possession of the mortgaged property. Thus, considering the possession of the Court Receiver, the Adjudicating Authority was wrong in passing order on 24th July 2015. It was the duty of the Respondent No.2 ought to have considered the aspect of possession of Court Receiver in the appellant's application and ought not to have rejected the said contention of the appellant on the ground that on the date of provisional attachment, mainly on the reasons that the Adjudicating Authority was not aware of the order passed by the Hon'ble Bombay High Court and the fact the Court Receiver had taken symbolic possession of the mortgaged property. T....
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.... Authority, on the basis of the material in the complaint had reason to believe that the ingredients necessary for the attachment order existed. So read, it follows that the Adjudicating Authority stated in the show cause notice that he had reason to believe that there existed the factors necessary to serve the notice. The reasons, in turn, stand incorporated in the notice from the complaint. It is apparent that the notice has been issued based on the reasons to be found in the complaint and the documents which have been expressly referred to in the complaint. The complaint itself expressly sets out the reason to believe. If. on the basis of the facts disclosed in the enclosures, the Adjudicating Authority had formed the opinion that there was no reason to believe the existence of the factors mentioned in section 8. he would not have issued the show cause notice. That he did indicates that he had reason to believe the existence of the said factors. In the facts and circumstances of the case this is sufficient compliance." 38. The said decisions have no bearing to the facts of the present case. The same was on aspect of movable property. Secondly, in the said decision the Judgment....
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....ciety Employees' Union v. Registrar of Coop. Societies was per Incuriam. 15. If the view taken by the High Court is accepted, in our opinion, there would be total chaos in this country because in that case there would be no finality to any order passed by this Court. When a higher court has rendered a particular decision, the said decision must be followed by a subordinate or lower court unless it is distinguished or overruled or set aside. The High Court had considered several provisions which, in its opinion, had not been considered or argued before this Court when CA No. 4343 of 1988 was decided. If the litigants or lawyers are permitted to argue that something what was correct, but was not argued earlier before the higher court and on that ground if the courts below are permitted to take a different view in a matter, possibly the entire law in relation to the precedents and ratio decidendi will have to be rewritten and, in our opinion, that cannot be done. Moreover, by not following the law laid down by this Court, the High Court or the subordinate courts would also be violating the provisions of Article 141 of the Constitution of India. 40. Thus the decisions referred ....
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....cular decision, the said decision must be followed by a Subordinate or lower court unless it is distinguished or overruled or set aside. C. Kanhaiyalal V. Dr. D.R. banaji and others [1959 SCR 333 AIR 1958 SC 725], it is settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under Order 40, rule 1 of the Code of Civil Procedure without leave of that court are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entitled to the same. The proposition canvassed are appropriately considered in rendering the findings. "17. The question still remains whether the Tribunal had jurisdiction to recall its earlier award dated 12-6-1987. The High Court was of the view that in the absence of an express provision in the Act conferring upon the Tribunal the power of review the Tribunal could not review its earlier a....
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....ples it is apparent that where a court or quasi-judicial authority having jurisdiction to adjudicate on merit proceeds to do its judgment or order can be reviewed on merit only if the court or the quasi-judicial authority is vested with power of review by express provision or by necessary implication. The procedural review belongs to a different category. In such a review, the court or quasijudicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits (sic ascertains whether it has committed) a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and consequently the order passed therein. Cases where a decision is rendered by the court or quasi-judicial authority without notice to the opposite party or under a mistaken impression that the notice had been served upon the opposite party, or where a matter is taken up for hearing and decision on a date other than the date fixed for its hearing, are some illustrative cases in which the power of procedural review may be invoked. In such a case the party seeking review or recall of the order does not have to substantiate the ground that the order passed suffer....