TaxTMI 
TaxTMI 
2015 (12) TMI 1703
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....he Respondent: Manish Kumar, Rashmi Srivastava, Advs. for Gopal Singh, Adv., Santosh Mishra, Param Mishra, Nishant Ramakantrao Katneshwarkar, Shibashish Misra, Sakshi Kakkar and C.D. Singh, Advs. JUDGMENT Dipak Misra, J. 1. Corruption, a 'noun' when assumes all the characteristics of a Verb', becomes self-infective and also develops resistance to antibiotics. In such a situation the disguised protagonist never puts a Hamletian question-"to be or not to be"-but marches ahead with perverted proclivity-sans concern, sans care for collective interest, and irrefragably without conscience. In a way, corruption becomes a national economic terror. This social calamity warrants a different control and hence, the legislature comes up with special legislation with stringent provisions. The law having been enacted, there is a challenge to the constitutionality of the provisions. That is the subject matter of these appeals, for the judgments rendered by the High Courts of Orissa and Patna are under assail herein. 2. Leave granted in Special Leave Petition (Criminal) No. 4558 of 2012, Special Leave Petition (Criminal) No. 3084 of 2013 and Special Leave Petition (Criminal)....
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....nt of the President of India. The State Government in exercise of its power conferred Under Section 27 of the Orissa Act framed a set of Rules, namely, the Orissa Special Courts Rules, 2007 (for short "2007 Rules"). 6. Before we dwell upon the submissions that were raised before the High Court and how the High Court has dealt with them, we think it appropriate to understand the scheme of the Orissa Act. Section 2(a) of the Orissa Act defines "authorised officer" which means any serving officer belonging to Orissa Superior Judicial Service (Senior Branch) and who is or has been an Additional Sessions Judge, nominated by the State Government with the concurrence of the High Court for the purpose of Section 13. Section 2(c) defines "declaration" in relation to an offence and it means a declaration made Under Section 5 in respect of such offences. The term "offence" has been defined Under Section 2(d) which means an offence of criminal misconduct within the meaning of Clause (e) of Sub-section (1) of Section 13 of the 1988 Act. As per dictionary clause, Section 2(e) specifies "Special Court" which means a Special Court would be one as provided Under Section 3 of the Orissa Act. Sect....
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.... Prosecutor to make an application and also stipulates what the application shall accompany. 8. Section 14 provides for issuance of show cause notice by the Authorised Officer to the person concerned to explain his source of income and other assets and why such money or property or both should not be declared to have been acquired by means of the offence and be confiscated to the State Government. Sub-section (2) provides that where a notice Under Sub-section (1) to any person specifies any money or property or both has been held on behalf of such person by any other person, a copy of the notice shall also be served upon such other person. Sub-section (3) lays down that the evidence, information or particulars brought on record before the authorised officer shall not be used against the accused in the trial before the special court. Section 15 deals with the confiscation of property in certain cases. It provides a detailed procedure and obliges the authorised officer to follow the principles of natural justice. It prescribes a time limit for disposal of the proceeding and gives immense stress on identification of property or money or both which have been acquired by means of the....
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....of the property. Sub-section (2) provides that if any person refuses or fails to comply with an order made Under Sub-section (1), the authorised officer may take possession of the property and may, for that purpose, use such force as may be necessary. Sub-section (3) confers powers on the authorised officer to requisition service of any police officer to assist and mandates the concerned police officer to comply with such requisition. 9. Chapter IV of the Orissa Act deals with the miscellaneous provisions. Section 20 stipulates that no notice issued or served, no declaration made and no order passed under the Act shall be deemed to be invalid by reason of any error in the description of the property or person mentioned therein, if such property or person is identifiable from the description so mentioned. Section 21 provides that the provisions of the Orissa Act shall be in addition, and not in derogation of, any other law for the time being in force. It also lays down that nothing contained in the Act shall exempt any public servant from a proceeding, apart from this Act, be instituted against him. Section 22 says save as provided in Sections 9 and 17 and notwithstanding anythin....
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....stitutional validity of the Act. 12. Be it stated after judgment was delivered by the High Court on 16.9.2010, the State Government, Department of Home brought out a notification on 27.11.2010 amending certain rules. The relevant rule which has been amended is as follows: 2. In the Orissa Special Courts Rules, 2007 (hereinafter referred to as the said Rules), in Rule 2, in Sub-rule (1), in Clause (e), after the words and the figures "Indian Penal Code, 1860" and before the words "belonging to Group 'A' Service", the words "including Officers of All India Services working under Government of Orissa" shall be inserted. 13. The constitutional validity of the Act as well as the Rules (prior to the amendment of the Rule) was assailed before the High Court in many a writ petition. The High Court noted the rivalised contentions and basically posed six questions. The sixth question related to a writ Petitioner who was an IAS officer and it was asserted that he belonged to a category other than the officer of Group A service and hence, the declaration bringing him under the Act was illegal. Thus, the said issue stands on a different footing and we shall in due c....
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....n affidavit filed on 23.7.2010 and on that basis ruled that the apprehension that certain cases would be selectively picked and chosen from amongst the offenders charged Under Section 13(1)(e) of the 1988 Act for the purposes of invoking the provision of Chapter III was untenable in law. After making reference to the authority in Delhi Administration v. V.C. Shukla (1980) Supp. SCC 249, the Court opined that the attack based on discrimination was unfounded and accordingly answered the question Nos. 1 and 4 against the writ Petitioners. While dealing with the question No. 3 which pertained to the repugnancy of the Orissa Act to the provisions of the Prevention of Money Laundering Act, 2002 as amended by Amendment Act 2009, it has been opined that there was no repugnancy between the two statutes, for the procedure under both the statutes relating to confiscation of monies and properties of the accused are different and further the Prevention of Money Laundering Act, 2002 does not efface the prosecution against the persons facing prosecutions under the 1988 Act. That apart, the Division Bench also opined that Part A and Part B of the Schedule to the Prevention of Money Laundering Act,....
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....s with refund of confiscated money or property. Chapter IV of the Bihar Act enumerates the miscellaneous provisions and Section 26, like the Orissa Act states as regards the overriding effect. The competent authority has framed a set of rules, namely, Bihar Special Courts Rules 2010, for short, "2010 Rules". Rule 2(f) of the 2010 Rules defines "public servant" to mean a public servant as defined within the meaning of Clause (c) of Section 2 of the 1988 Act or Under Section 21 of the Indian Penal Code, 1860 and including Group-A service of the Central or State Government or officers of equivalent rank in any organization specified in the explanation below Clause (b) of Section 2 of the said Act who was serving under or in connection with the affairs of the State Government. Rule 6 deals with cognizance and trial by the Special Court. Rule 9 states that the State Government, in consultation with the High Court shall nominate an officer belonging to the cadre of the Bihar Superior Judicial Service, Senior Branch, who is or has been a Sessions Judge or Additional Sessions Judge to act as the authorized officer for the purposes of the Act and requires him to follow the summary procedure....
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.... to the rampant corruption and disproportionate assets amassed by the public servants through illegal means; that it is the obligation of the State to prosecute such persons and confiscate their ill-gotten assets; that Section 5(1) does not suffer from vice of discrimination and it withstands the test of discernible differentia and there has been no abdication of legislative function or conferment of unguided delegation of power; that making a provision for speedy trial is a facet of Article 21 of the Constitution and in the obtaining scenario to eradicate the maladies and the menace, the legislature had enacted the legislation to deal with it frontally; that the power vested Under Section 5 has enough guidance and it cannot be said that it falls foul of Article 14 of the Constitution; that from the very definition of the term "offence" it is clear that it is in a different category or compartment altogether; that the non-assail of the declaration before any court would not include the High Court or the Supreme Court of India which exercises power of judicial review; that the challenge to Section 6(2) of the Act takes in its sweep the pending cases whereby making the provision effe....
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.... suffer from prejudice and the legislature has cautiously entrusted the confiscation proceeding to an "Authorized Officer" whereas the trial has been entrusted to the "Special Court", and that is why the words i.e. "Authorized Officer" and "Special Court" have been separately defined and the distinction is evident and it is quite clear that confiscation proceeding and criminal trial against accused of an offence are not conducted by the same judicial officer; and, therefore, the likelihood of bias is not allowed to have any room. 19. The High Court of Patna while dealing with the vice of Section 17(3) proceeded to interpret Sub-section (3) of Section 17 and opined that legislature has not given a definite and fixed period of six months as the time for disposal of appeal regard being had to the phraseology used in the provision, for it has been stipulated that an appeal preferred Under Sub-section (1) shall be disposed of preferably within a period of six months from the date it is preferred, and stay order, if any, passed in an appeal shall not remain in force beyond the prescribed period of disposal of appeal. The High Court has observed that the use of word "preferably" is a d....
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....th the grievance relating to forceful eviction from dwelling house ordinarily occupied by the delinquent/accused prior to final determination of guilt in course of trial for the offence, as contemplated Under Section 18 of the Act, the Division Bench observed that the said provision makes no distinction between the properties found fit for confiscation, for all the properties subjected to confiscation proceeding whether they are dwelling house or other kinds of property have been treated alike. Addressing to the submission that an exception should have been made in respect of a dwelling house or unit where the delinquent/accused ordinarily resides himself with or without his family, because the dwelling house meets one of the basic needs of a person and it would be arbitrary to deprive a delinquent of such basic requirement when the trial is still pending and taking note of the argument on behalf of the State that the entire confiscated property has to be treated similarly and not making of an exception for a dwelling house or unit from the provisions of Section 18 does not violate any constitutional provision, the High Court opined that no distinction made between the two sets of ....
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....ave given the liberty aforesaid but sometimes it is useful to observe certain facts in order to avoid unnecessary litigation. In respect of Bihar Special Court's Rules, 2010 a grievance was raised that Rule 12(f) envisages a procedure which is contrary to procedure prescribed for trial of warrant cases before a Magistrate which has been prescribed by Section 18(1) of the Act. It goes without saying that in case of conflict between Act of Legislature and Rules framed under the Act, the provisions of the Act will prevail. The State of Bihar is expected to take note of the aforesaid submission in its own interest and amend the relevant Rule if there is any need felt for the same. 24. Thus, the High Court interpreted certain provisions to sustain the constitutional validity of the Act and as far as the Rule is concerned observed as above, and thereafter dismissed the writ petitions. 25. We have heard Mr. A. Saran, Mr. Vinoo Bhagat, Mr. P.S. Narasimha, Mr. R.K. Dash, Mr. Rakhruddin, Mr. S.B. Upadhyaya, Mr. Neeraj Shekhar, Mr. Gaurav Agrawal, Mr. Anirudh Sanganeria, and Mr. M.P. Jha, learned Counsel for the Appellants and Mr. Ranjit Kumar, Mr. S.K. Padhi, learned senior Counsel....
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....s to be presided over by the persons who are or have been Sessions Judge and it is also expedient to make some procedural changes whereby avoidable delay in the final determination of the guilt or innocence, of the persons to be tried, is eliminated without interfering with the right to a fair trial. 27. The objects and reasons and various provisions of the Act which we have referred to in course of our narration would show that there is immense emphasis on corruption by the people holding high political and public offices. The stress is on accumulation of wealth disproportionate to the known sources of their income by resorting to corrupt practices. Corruption at high levels has been taken note of by this Court in many a judgment. This Court has also on the basis of reports of certain Commissions/Committees, from time to time, has painfully addressed to the burning issue of corruption. In Manoj Narula v. Union of India (2014) 9 SCC 1, the Constitution Bench harping on the concept of systemic corruption, has been constrained to state that systemic corruption and sponsored criminalisation can corrode the fundamental core of elective democracy and, consequently, the constitutional....
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....ngs a new law into existence despite an earlier law, that is, the 1988 Act, the special legislation has to withstand close scrutiny and satisfy the test that is warranted under the constitutional parameters. To elaborate, highlighting on the existing scene of corruption the State legislature or any legislature cannot be allowed to introduce a law which is not constitutionally permissible. 31. The learned Counsel appearing for the Appellants have raised many a submission and their arguments can be summarised as follows: (A) The Orissa Act has been introduced in the assembly as a money bill whereas it does not remotely have any characteristics of a money bill and hence, it violates the mandate of Article 199 of the Constitution. (B) The State legislature does not have the authority to make provisions for establishment of Special Courts for the offences provided under the Central Act regard being had to the language employed in Article 247 of the Constitution and hence, it suffers from the vice of the said constitutional provision. (C) The assent obtained from the President of India, the same being imperative, is only in respect of few p....
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....y arbitrary and unreasonable. That apart, the confiscation of the properties including the dwelling house disrobes a person from living with dignity having basic requirement of life and hence, it offends Article 21 of the Constitution. The proviso which carves out an exception to enable a delinquent officer to retain the dwelling house on payment of the market price is in a way deceptive inasmuch as all the properties and bank accounts are seized it is well-nigh impossible to offer the market price and the legislature has not kept in view that the law does not envisage an impossible act to be done. In essence, the criticism is that the proviso does not save the provisions from being offensive of Article 21 of the Constitution. (K) In the proceedings for confiscation, the accused is bound to disclose all his defence at the pre-trial stage and that ultimately plays foul of Article 20(3) of the Constitution and also Article 21 which encompasses a fair trial and does not tolerate any violation of the same. (L) The accused persons against whom cases have been registered under the 1988 Act are compelled to be tried under the present Orissa Act as a consequen....
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....he assent from the President and, therefore, the provision for establishing the Special Courts by the State Government in consultation with the High Court does not become unconstitutional. (III) The submission that the assent has not been obtained in respect of all the provisions of the Orissa Act and, therefore, the Orissa Act is invalid and cannot withstand scrutiny, is absolutely unsustainable, for the entire enactment with notes were sent for the assent of the President and the same has been given due assent by the President as required under the Constitution. (IV) The submission that the provisions of the Orissa Act are repugnant to other enactment as the provisions encroach upon the offences under the Acts, namely, the Prevention of Money Laundering Act, 2002, as amended in 2009, is totally untenable as the sphere of operation is altogether different. (V) The submission that there is no rationale to differently try the offence punishable Under Section 13(1)(e) separating it from other offences Under Section 13 in the backdrop of Article 14, is absolutely unacceptable inasmuch as there is a gulf of difference between the two categor....
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.... Article 21 of the Constitution is based on erroneous premises. (X) The argument that the accused persons being tried in respect of other offences under the 1988 Act do not face the situation of interim confiscation, whereas the accused persons facing trial under the Orissa Act face the confiscation proceedings which is arbitrary has no legs to stand upon if the classification as regards offences and the forum is valid, for that, as a natural corollary, would structurally protect the interim confiscation. (XI) The assailment as regards the retrospective applicability is concerned, may, on a first blush, look quite attractive but on a keener scrutiny it has to pale into insignificance. The plea that it plays foul of Article 20(1) of the Constitution is absolutely unsound. (XII) The provisions relating to confiscation are absolutely guided and, in fact, a judicial officer of the rank of Sessions Judge or Additional Sessions Judge is nominated as the authorised officer and there is an appeal provided from his order which would show that the confiscation is not done at the whim and caprice of the executive but after affording adequate opport....
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....hall not be called in question on the ground of any alleged irregularity of procedure. 35. Learned Counsel for the Appellants has drawn inspiration from a passage from Special Reference No. 1 of 1964 AIR 1965 SC 745, wherein it has been held that Article 212(1) lays down that the validity of any proceedings in the legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure and Article 212(2) confers immunity on the officers and members of the legislature in whom powers are vested by or under the Constitution for regulating procedure or the conduct of business, or for maintaining order, in the legislature from being subject to the jurisdiction of any court in respect of the exercise by him of those powers. The Court opined that Article 212(1) seems to make it possible for a citizen to call in question in the appropriate Court of law the validity of any proceedings inside the Legislative Chamber if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinised in a Court of law, though such sc....
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....hich scheme of things, this Court is entrusted with the duty to be watchdog of and guarantor of the Constitution. 37. In this regard, we may profitably refer to the authority in Mohd. Saeed Siddiqui v. State of Uttar Pradesh and Anr. (2014) 11 SCC 415, wherein a three-Judge Bench while dealing with such a challenge, held that Article 212 precludes the courts from interfering with the presentation of a Bill for assent to the Governor on the ground of non-compliance with the procedure for passing Bills, or from otherwise questioning the Bills passed by the House, for proceedings inside the legislature cannot be called into question on the ground that they have not been carried on in accordance with the Rules of Business. Thereafter, the Court referring to Article 199(3) ruled that the decision of the Speaker of the Legislative Assembly that the Bill in question was a Money Bill is final and the said decision cannot be disputed nor can the procedure of the State Legislature be questioned by virtue of Article 212. The Court took note of the decision in Raja Ram Pal (supra) wherein it has been held that the proceedings which may be tainted on account of substantive or gross irregular....
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....ced by the Union of India, Respondent therein, that Article 247 empowers Parliament to establish additional courts for better administration in respect of laws passed under List I of the Seventh Schedule of the Constitution. After reproducing Article 247, the Constitution Bench noted the following submissions which throw some light: Referring to the above provision, it was the assertion of the learned Counsel for the Respondents, that power was expressly vested with Parliament to establish additional courts for better administration of laws. It was submitted that this was exactly what Parliament had chosen to do while enacting the NTT Act. Referring to the objects and reasons, indicating the basis of the enactment of the NTT Act, it was the categorical assertion at the hands of the learned Counsel, that the impugned enactment was promulgated with the clear understanding that NTT would provide better adjudication of legal issues arising out of direct/indirect tax laws. 42. Be it noted, in the said case, the constitutional validity of the National Tax Tribunal Act, 2005 was called in question on many a ground. One of the grounds that was urged by the Petitioner ther....
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....t was opined in O.N. Mohindroo v. The Bar Council of Delhi and Ors. AIR 1968 SC 888 that it was within the exclusive power of the State. After the amendment both Parliament and the State legislature are empowered under the Constitution to give the High Court general power including territorial jurisdiction and also take away jurisdiction and powers from the High Court which have been conferred by the statutory law by enacting appropriate legislation which is referable to administration of justice. But, it cannot take away the power specifically conferred on the High Courts under the Constitution. This principle has been stated in the following terms in Jamshed N. Guzdar v. State of Maharashtra (2005) 2 SCC 591: In the light of the various decisions referred to above, the position is clear that the expression "administration of justice" has wide amplitude covering conferment of general jurisdiction on all courts including High Court except the Supreme Court under Entry 11-A of List III. It may be also noticed that some of the decisions rendered dealing with Entry 3 of List II prior to 3-1-1977 touching "administration of justice" support the view that conferment of general jurisd....
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....ration of justice but the same is subject to Entry 77 and Entry 78 of List I. Entry 77 and Entry 78 of List I read as follows: Entry 77. Constitution, organisation, jurisdiction and powers of the Supreme Court (including contempt of such Court), and the fees taken therein; persons entitled to practise before the Supreme Court. Entry 78. Constitution and organisation (including vacations) of the High Courts except provisions as to officers and servants of High Courts; persons entitled to practise before the High Courts. 47. Entry 46 of List III in this context needs to be reproduced: Entry 46. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List. Entry 65 of List II is worth referring to: Entry 65. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List. 48. The aforesaid entries make it clear that as regards jurisdiction and powers of the Supreme Court, the Parliament has exclusive legislative competency and as far as the jurisdiction other than Supreme Court and the High Courts is conce....
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.... be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive Code; and (iii) even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject-matter. The Court had placed reliance upon Ch. Tika Ramji and Ors. v. The State of Uttar Pradesh and Ors. (1956) SCR 393. 51. Thereafter, the Court proceeded to state that: The question of repugnancy Under Article 254(1) between a law made by Parliament and a law made by the State Legislature arises only in case both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent List, and there is direct conflict between the two laws. It is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy become void. Article 254(1) has no application to cases of repugnancy due to overlapping found between List II on the one hand and List I and List III on the other. If such overlapping exists in any particular case, the State law will be ultra vires because of the non-obstan....
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....ything to be done and the other enactment may say the contrary and that even both the laws cannot co-exist together. In such cases, as has been ruled in M.P. A.I.T. Permit Owners Association and Anr. v. State of M.P. (2004) 1 SCC 320, the law made by Parliament shall prevail over the State law. Same principle has been reiterated in Govt. of A.P. and Anr. v. J.B. Educational Society and Anr. (2005) 3 SCC 212. 54. Thus viewed, repugnancy arises when there is a clear and direct inconsistency between the central law and the State law and such inconsistency is irreconcilable. It is because in such a situation there is a direct collision with the Central Act or brings about a situation where obeying one would lead to disobeying the other. In Dharappa v. Bijapur Coop. Milk Producers Societies Union Ltd. (2007) 9 SCC 109 it has been spelt out that Clause (2) of Article 254, however, provides that where a law made by the legislature of a State with respect to one of the matters enumerated in the Concurrent List, contains any provision repugnant to an existing law with respect to that matter, then, the law so made by the legislature of such State shall, if it has been reserved for the con....
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....rrent List contains any provision repugnant to the provisions of an earlier law made by Parliament, then the law so made by the legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in the State. 57. Another aspect with regard to repugnancy and the validity of the State legislation may be stated. If there is a parliamentary legislation and the law enacted by the State legislation can co-exist and operate where one Act or the other is not available, then there is no difficulty in making the State law on the fact situation available. It has been so held in EID Parry (I) Ltd. v. G. Omkar Murthy and Ors: (2001) 4 SCC 68 and Saurashtra Oil Mills Assn. v. State of Gujarat (2002) 3 SCC 202. When a situation crops up before the court pertaining to applicability of a parliamentary legislation and any enactment or law enacted by the State legislature for consideration, the effort of the court should be to see that the provisions of both the Acts are made applicable, as has ruled in Imagic Creative (P) Ltd. v. CCT (2008) 2 SCC 614. 58. Having stated the proposition where and in which circumstances the princip....
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....d that it can be stated that for the State law to prevail, the requirements that are to be satisfied are; (a) law made by the legislature of a State should be with respect to one of the matters enumerated in the Concurrent List; (b) it contains any provision repugnant to the provision of an earlier law made by Parliament or an existing law with respect to that matter; (c) the law so made by the legislature of the State has been reserved for the consideration of the President; and (d) it has received "his assent". 60. After so stating, the Court proceeded to lay down as follows: 14. In view of the aforesaid requirements, before obtaining the assent of the President, the State Government has to point out that the law made by the State Legislature is in respect of one of the matters enumerated in the Concurrent List by mentioning entry/entries of the Concurrent List and that it contains provision or provisions repugnant to the law made by Parliament or existing law. Further, the words "reserved for consideration" would definitely indicate that there should be active application of mind by the President to the repugnancy pointed out between the proposed State law and ....
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....y the President is restricted or unrestricted, the letter written or the proposal made by the State Government for obtaining "assent" is required to be looked into. 61. Proceeding further, the Court placed reliance on P.N. Krishna Lal v. Govt. of Kerala 1995 Supp. (2) SCC 187 and Hoechst Pharmaceuticals Ltd. (supra) and ruled that it cannot be said that the High Court committed any error in looking at the file of the correspondence Ext. F collectively for finding out--for what purpose "assent" of the President to the extension of Acts extending the duration of the Bombay Rent Act was sought for and given. After so stating, the Court observed: 29. We further make it clear that granting of assent Under Article 254(2) is not exercise of legislative power of the President such as contemplated Under Article 123 but is part of the legislative procedure. Whether procedure prescribed by the Constitution before enacting the law is followed or not can always be looked into by the Court. 30. Finally, we would observe that the challenge of this nature could be avoided if at the commencement of the Act, it is stated that the Act has received the assent with rega....
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....has raised the presumption. We do not think that it was necessary to do so. In any case as discussed above, the essential ingredients of Article 254(2) are: (1) mentioning of the entry/entries with respect to one of the matters enumerated in the Concurrent List; (2) stating repugnancy to the provisions of an earlier law made by Parliament and the State law and reasons for having such law; (3) thereafter it is required to be reserved for consideration of the President; and (4) receipt of the assent of the President. 64. Thereafter, the Constitution Bench referred to paragraph 65 of the authority in Kaiser-I-Hind (P) Ltd., (supra) wherein it has been stated that "pointed attention" of the President is required to be drawn to the repugnancy and the reasons for having such a law, despite the enactment by Parliament, has to be understood. After reproducing paragraph 65 in entirety, the larger Bench in Rajiv Sarin (supra) observed: 64. If it is to be contended that Kaiser (supra) lays down the proposition that there can be no general Presidential assent, then such an interpretation would be clearly contrary to the observation of the Bench in para 27 itself where it stat....
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....ho are or have been Session Judge in the State for trial of offences committed under Clause (e) of Sub-section (1) of Section 13 of the Prevention of Corruption Act, 1988. To eradicate corruption from high public and political offices properties alleged to have been acquired out of such alleged corruption need to be confiscated. So for confiscation of property of the alleged offender, provision has been made for appointment of authorized officer who is or has been an Additional Session Judge. 3. The sub matter of Legislation is relatable to Entry 11-A read with Entries 1 and 2 of List III (Concurrent List) of the Seventh Schedule to the Constitution. Accordingly, the State Legislature has enacted the said law. But the provisions contained in Clauses 6, 7, 22 and 26 of the Bill are repugnant to the existing provisions of certain laws, namely, the prevention of Corruption Act, 1988, the Code of Criminal Procedure, 1973 and the Criminal Law Amendment Ordinance, 1944, therefore, the Bill as passed by the State Legislature is required to be reserved for the consideration and assent of the President of India Under Article 254(2) of the Constitution. 4. It is further sta....
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....Orissa Act are definitely not repugnant to the 1988 Act, the Code of Criminal Procedure, 1973 and the Criminal Law Amendment Ordinance, 1944. 67. It is submitted that there is repugnancy between Orissa Act and the Prevention of Money-Laundering Act, 2002. It is urged by the learned Counsel for the Appellants that whatever has been mentioned in the letter or other provisions may not be repugnant but definitely the Act is repugnant to other enactment like the Prevention of Money-Laundering Act, 2002, as amended in 2009. It has been stated by the Constitution Bench in M. Karunanidhi (supra) that in order to decide the question of repugnancy it must be shown (i) that the two enactments contain inconsistent and irreconcilable provision so that they cannot stand together or operate in the same field; (ii) that there can be no repeal by implication unless the inconsistency appears on the face of the two statutes; (iii) that where the two statues occupy a particular field, but there is room or possibility of both the statutes operating in the same filed without coming into collusion with each other, no repugnancy results; (iv) that where there is no inconsistency but the statute occupyi....
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.... of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted." 71. Section 5, which provides for attachment of property involved in the money laundering, stipulates that where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe, on the basis of material in his possession, that (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under Chapter III, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed, provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate Under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person author....
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.... serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached Under Sub-section (1) of Section 5, or, seized 2 or frozen Under Section 17 or Section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government. There are certain provisions appended to the said Section. Sub-Section 2 stipulates that the Adjudicating Authority shall, after considering the reply, if any, to the notice issued under Sub-section (1) and hearing the aggrieved person and the Director or any other officer authorised by him in this behalf, and taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issued Under Sub-section (1) are involved in money-laundering. Thereafter, the provisions of the said Act deal with the adjudication by the Adjudicating Authority as regards the....
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....l Courts. Chapter IX of the Prevention of Money-Laundering Act, 2002 deals with reciprocal arrangement for assistance in certain matters and procedure for attachment and confiscation of property. Section 55 occurring in this Chapter is a dictionary clause which defines the terms "contracting State", "identifying" and "tracing". Section 56 mentions about the agreement with the foreign countries. Sections 57 to 61 deal with range of topics where concepts of reciprocal arrangement and letter of request are involved. Chapter X which is miscellaneous chapter provides for punishment of vexatious search. Section 70 deals with offences by companies and Section 71 occurring in this Chapter captioned as "Miscellaneous" is with regard to the overriding effect and it clearly lays down that "The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force." 75. Be it stated that the Prevention of Money-Laundering Act, 2002 contains Schedules which originally contained three Parts, namely, Part A, Part B and Part C. Part A which contains various paragraphs enumerates offences under the Indian Penal Code, The Na....
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....and Psychotropic Substances Act, 1985; The Explosive Substances Act, 1908; The Unlawful Activities (Prevention) Act, 1967; The Arms Act, 1959; The Wildlife (Protection) Act, 1972; etc. There was a purpose behind the same. There could be offences under the Prevention of Money-Laundering Act, 2002 arising from the offences under the other Acts. Unless an offence under the Money Laundering Act, 2002 is committed and taken cognizance of by the authorities, the offences under the other Acts can continue as that is the law in the field. Once there is money laundering, the accused may be tried by the Special Courts as provided under the said Act. Part A enumerates offences under the Central legislation and certain offences under the Indian Penal Code. The first condition precedent is that the offence committed must pertain to money laundering. If a person is tried Under Section 13(1)(e) satisfies the ingredients of money laundering, the matter would be different and hence, both the Acts can harmoniously co-exist. 78. In view of the aforesaid analysis and keeping in view the law pertaining to repugnancy we have hereinbefore referred to, we are unable to accept the submission of the lear....
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....and the purpose it intends to serve, there is enough guidance not to allow any kind of arbitrariness. To appreciate the said contention, we are obligated to refer to Section 2(d) of the Orissa Act which defines the term 'offence' which reads as follows: Section 2(d). "Offence" means an offence of criminal misconduct within the meaning of Clause (e) of Sub-section (1) of Section 13 of the Prevention of Corruption Act, 1988. 82. Section 5 and Section 6 of the Orissa Act read as follows: Section 5. Declaration of cases to be dealt with under this Act -(1) If the State Government is of the opinion that there is prima facie evidence of the commission of an offence alleged to have been committed by a person, who held high public or political office in the State of Orissa, the State Government shall make a declaration to the effect in every case in which it is of the aforesaid opinion. (2) Such declaration shall not be called in question in any Court. Section 6. Effect of declaration - (1) On such declaration being made, notwithstanding anything in the Code or any other law for the time being in force, any prosecution ....
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.... 2015 (11) SCALE 1, while dealing with the term "fit" expressed Under Section 5(1) of the National Judicial Appointments Commission Act, 2014, the Court noted the submissions of the learned Attorney General that the said word would only mean mental and physical fitness, and nothing else. Commenting on the said submission, Khehar, J. stated as follows: ...The present wisdom, cannot bind future generations. And, it was exactly for this reason, that the Respondents could resile from the statement made by the then Attorney General, before the Bench hearing the Third Judges case, that the Union of India was not seeking a review or reconsideration of the judgment in the Second Judges case (that, it had accepted to treat as binding, the decision in the Second Judges case). And yet, during the course of hearing of the present case, the Union of India did seek a reconsideration of the Second Judges case. 84. In this regard, a passage from Sanjeev Coke Manufacturing Co. v. M/s. Bharat Coking Coal Limited and Anr. (1983)1 SCC 147 would be apt to quote: The deponents of the affidavits filed into court may speak for the parties on whose behalf they swear to the ....
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....reated the rest of it as valid. The legislature, as is perceptible, has rightly deleted the said words. Interpretation of the stipulations in Section 5 are to be appreciated in the context of the scheme of the Orissa Act. Section 2(d) defines the term "offence" which means an "offence" of criminal misconduct within the meaning of Clause (e) of Sub-section (1) of Section 13 of the 1988 Act. Section 5(1) confers power on the State to form an opinion that there is prima facie evidence of commission of an offence alleged to have been committed by a person who has held high public or political office in the State of Orissa and then proceed to make the declaration to that effect. The key words, as we find, are "prima facie evidence of the commission of the offence alleged". In Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. AIR 1987 SC 1023 it has been ruled that interpretation must depend on the text and the context and they must form the basis of interpretation. The two-Judge Bench speaking through Chinnappa Reddy, J. has expressed that: ...A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be re....
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....atute. The Court further ruled that it is permissible to control the wide language used in a statute if that is possible by the setting in which the words are used and the intention of the law-making body which may be apparent from the circumstances in which the particular provision came to be made, and therefore, a literal and mechanical interpretation is not the only interpretation which courts are bound to give to the words of a statute; and it may be possible to control the wide 'language in which a provision is made by taking into account what is implicit in it in view of the setting in which the provision appears and the circumstances in which it might have been enacted. 89. In TATA Engineering and Locomotive Co. Ltd. v. State of Bihar and Anr. (2000) 5 SCC 346 emphasis was laid as regards the purposes which lie behind the words and to be too literal in the meaning of words is to see the skin and miss the soul. 90. In this regard, a passage from the Statutory Interpretation by Justice G.P. Singh, 9th Edn. 2004, at p. 86, would throw immense insight: "No word", says PROFESSOR H.A. SMITH "has an absolute meaning, for no words can be defined in vacuo, or....
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.... Act, 2000 subject to Section 79(3)(b) by stating as follows: Section 79 is valid subject to Section 79(3)(b) being read down to mean that an intermediary upon receiving actual knowledge from a court order or on being notified by the appropriate government or its agency that unlawful acts relatable to Article 19(2) are going to be committed then fails to expeditiously remove or disable access to such material. Similarly, the Information Technology "Intermediary Guidelines" Rules, 2011 are valid subject to Rule 3 Sub-rule (4) being read down in the same manner as indicated in the judgment. 94. A passage from DTC v. Mazdoor Congress AIR 1999 SC 101 : 1991 Supp (1) SCC 600 is also fruitful to extract: ...The doctrine of reading down or of recasting the statute can be applied in limited situations. It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionality. It is an extension of the principle that when two interpretations are possible--one rendering it constitutional and the other making it unconstitutional, the former should be preferred. The unconstitutionality may spring from either the incompet....
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....e) and the accused has held high public or political office in the State. Textually understanding, the legislation has not clothed the State Government with the authority to scrutinize the material for any other purpose. The State Government has no discretion except to see whether the offence comes Under Section 13(1)(e) or not. Such an interpretation flows when it is understood that in the entire texture provision turns around the words "offence alleged" and "prima facie". It can safely be held that the State Government before making a declaration is only required to see whether the person as understood in the context of the provision is involved in an offence Under Section 13(1)(e) of the Orissa Act and once that is seen, the concerned authority has no other option but to make a declaration. That is the command of the legislature and once the declaration is made, the prosecution has to be instituted in a Special Court and that is the mandate of Section 6(1) of the Orissa Act. Therefore, while holding that the reference to the affidavit filed by the State Government was absolutely unwarranted, for that cannot make a provision constitutional if it is otherwise unconstitutional, we ....
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....view: ...Shri Mehta points out further that Section 86 which confers the rule-making power upon the Government does not say that the rules when made shall be treated as if enacted in the Act. Being a rule made by the Government, he says, Rule 42-E can be deleted, amended or modified at any time. In such a situation, the legislative competence of a legislature to enact a particular provision in the Act cannot be made to depend upon the rule or rules, as the case may be, obtaining at a given point of time, he submits. We are inclined to agree with the learned Counsel. His submission appears to represent the correct principle in matters where the legislative competence of a legislature to enact a particular provision arises. If so, the very foundation of the Appellants' argument collapses. 101. From the aforesaid, it is crystal clear that unless the Act provides that the rules if deemed as enacted in the Act, a provision of the rule cannot be read as a part of the Act. 102. In the instant case, Section 24 lays down that the State Government may, by notification, make such rules, if any, as it may deem necessary for carrying out the purposes of this Act. The sa....
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.... it is of the opinion that there is prima facie evidence of the commission of an offence, during the period mentioned in the preamble, by a person who held a high public or political office in India and that, in accordance with the guidelines contained in the Preamble to the Bill, the said offence ought to be dealt with under the Act. The classification which Section 4(1) thus makes is both of offences and offenders, the former in relation to the period mentioned in the preamble that is to say, from February 27, 1975 until the expiry of the proclamation of emergency dated June 25, 1975 and in relation to the objective mentioned in the sixth para of the preamble that it is imperative for the functioning of parliamentary democracy and the institutions created by or under the Constitution of India that the commission of such offences should be judicially determined with the utmost dispatch; and the latter in relation to their status, that is to say, in relation to the high public or political office held by them in India. It is only if both of these factors co-exist that the prosecution in respect of the offences committed by the particular offenders can be instituted in the Special C....
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....isions fail to pass the test of valid classification Under Article 14, for the classification which distinguishes persons who are placed in a group from others who are left out of the group is not based on intelligible differentia; that there was no nexus between the differentiation which was the basis of the classification and the object of the Act; and that such differentiation did not have any rational relation to the object sought to be achieved by the Act. The Court reading the opinion in the Special Courts Bill, 1978 (supra) did not agree with the submissions of the learned Counsel for the Appellants that this Court had held that unless emergency offenders could be punished under the Special Courts Act and that no Act seeking to punish the offences of a special type not related to the emergency would be hit by Article 14. The Court addressed to the validity of Sections 5, 6, 7 and 11 of the Special Courts Act, 1979. One of the arguments advanced was that neither the words 'high public or political office' had been defined nor the offence being delineated so as to make the prosecution of such offenders a practical reality. Dealing with the said contention, the Court he....
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....(3) persons occupying a very elevated status in whose hands lies the destiny of the nation. 29. The rationale behind the classification of persons possessing the aforesaid characteristics is that they wield wide powers which, if exercised improperly by reason of corruption, nepotism or breach of trust, may mar or adversely mould the future of the country and tarnish its image. It cannot be said, therefore, with any conviction that persons who possess special attributes could be equated with ordinary criminals who have neither the power nor the resources to commit offences of the type described above. We are, therefore, satisfied that the term "persons holding high public or political offices" is self-explanatory and admits of no difficulty and that mere absence of definition of the expression would not vitiate the classification made by the Act. Such persons are in a position to take major decisions regarding social, economic, financial aspect of the life of the community and other far-reaching decisions on the home front as also regarding external affairs and if their actions are tainted by breach of trust, corruption or other extraneous considerations, they would d....
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....) to (d), he will be tried by the Special Courts under the 1988 Act, but when Section 13(1)(e) is combined along with other offences, namely, Section 7 to 11 of the 1988 Act, he will be facing the trial under the Orissa Act or two trials. Mr. P.S. Narasimha, learned senior Counsel, would contend that the bifurcation of offences defeats the concept of classification, for it pertains to a "stand alone offence", though no discernable principle is perceptible. learned senior Counsel would contend that there is no difference between Section 13(1) (a) to (d) and Section 13(1)(e) of the 1988 Act, but the legislature has made a special classification which the law does not countenance. It is also canvassed that a person not holding high public or political office would be tried by the Special Judge under the 1988 Act, whereas the differentiated category will be tried by the Orissa Act as a consequence of which an unacceptable discrimination takes place. It is contended that the only basis of classification for choosing a different forum with a different procedure is that the accused persons held 'high public or high political office' though there can be cases where holders of low p....
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....dvantage; or (iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or (e) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income. Explanation. - For the purposes of this section, "known sources of income" means income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant. (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine. 114. The submission of Mr. Narasimha, learned senior Counsel and others as we have referred to earlier, is that it is a micro-mini classification and classification is on the base of a stand alone offence or to put it differen....
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....f his income. He has drawn inspiration from P. Nallamal v. Inspector of Police (1999) 6 SCC 559, wherein it has been held that the words "known sources of income" have to be understood as "any lawful source". That apart, the explanation to Section 13(1)(e) further enjoins that receipt of such income should have been intimated by the public servant in accordance with the provisions of any law applicable to such public servant at the relevant time. Such a public servant cannot escape from Section 13(1)(e) of the 1988 Act by showing other legally forbidden sources, albeit such sources are outside the purview of Clauses (a) to (d) of the Sub-section. 115. Having so stated, we proceed to dwell upon the concept of classification as envisaged Under Article 14 of the Constitution. In this regard, we may usefully refer to the authority in Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors. AIR 1958 SC 538 wherein this Court while dwelling upon the concept of permissible classification opined thus: It is now well established that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to p....
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....owledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. 117. Having noted the aforesaid authorities, it is instructive to refer to the authority in Rehman Shagoo v. State of Jammu and Kashmir AIR 1960 SC 1, which dealt with a single offence legislation and treated it to be valid by observing thus: The offence created by Section 3 of the Ordinance is not found as such in the Penal Code but is a new offence of an aggravated kind which may in the circumstances prevailing in the State mentioned above be treated as different from the ordinary offences and may well be dealt with by a drastic procedure without encountering the charge of violation of the equal protection clause. We are, therefore, of opinion that on the principles laid down....
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....is a "consummation devoutly to be wished", although naive optimism cannot obfuscate the obnoxious experience that laws made in terrorem against those who belong to the top power bloc prove in action to be paper tigers. The pathology of our public law, with its class slant, is that an unmincing ombudsman or sentinel on the qui vive, with power to act against those in power, now or before, and offering legal access to the informed citizen to complain with immunity does not exist, despite all the bruited umbrage of political performers against peculations and perversions by higher echelons. Law is what law does, not what law says and the moral gap between word and deed menaces peopled faith in life and law. And then, the tragedy--democracy becomes a casualty. 111. No erudite pedantry can stand in the way of pragmatic grouping of high-placed office-holders separately, for purposes of high-speed criminal action invested with early conclusiveness and inquired into by high-level courts. This differentia of the Bill rings irresistibly sound. And failure to press forward such clean-up undertaking may be a blow to the rule of law and the Rule of life and may deepen the crisis of dem....
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....v. Anwar Ali Sarkar (1952) SCR 284. The Court referred to the Act which was brought into existence to provide for the more speedy trial and more effective punishment of certain offences. The Court while dealing with the equal protection of law guaranteed by Article 14 of the Constitution observed that there is a system which is brought into by introducing Special Courts dealing with special types of offences under a shortened and simplified procedure. The legislation is based on perfect intelligible principles of differentia having a clear and reasonable relation with the object sought to be achieved. The Court further observed that whether an enactment providing for a special procedure for trial of certain offences is or is not discriminatory and violative of Article 14 must be determined in each case as it arises, for, no general rule applicable to all cases can safely be laid down. It has been further ruled that practical assessment of operation of the law in the particular circumstances is necessary. We may state that the Court took note of the fact that in Kathi Raning Rawat v. The State of Saurashtra (1952) SCR 435 the decision in Anwar Ali Sarkar (supra) was distinguished an....
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....een obtained and the assent is valid in law, the State law will operate. Article 14 comes into play where equals are treated as unequals. The persons holding high public or political office in the State of Odisha are governed by the Orissa Act. The State legislature has passed the Orissa Act having regard to the obtaining situation in the State as the objects and reasons of the said Act do reflect. The legislature in its wisdom has enacted the law. The persons who are functioning in certain other States may be required to face trial under the 1988 Act, but on that score there can be no violation of Article 14 of the Constitution. The scale suggested, cannot be the scale to judge. A legislation passed by one State legislature cannot be equated with the legislation passed by another State legislature. Nor can its validity be tested on that foundation. The Constitution bench judgment in The State of Madhya Pradesh v. G.C. Mandawar AIR 1954 SC 493 long back had succinctly clarified the position in this regard laying down thus: The power of the Court to declare a law void Under Article 13 has to be exercised with reference to the specific legislation which is impugned. It is co....
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.... State Government may, whether or not the Special Court has taken cognizance of the offence, authorise the Public Prosecutor for making an application to the authorised officer for confiscation under this Act of the money and other property, which the State Government believe the said person to have procured by means of the offence. 2. An application Under Sub-section (1)- (a) shall be accompanied by one or more affidavits, stating the grounds on which the belief, that the said person has committed the offence, is founded and the amount of money and estimated value of other property believed to have been procured by means of the offence; and (b) shall also contain any information available as to the location for the time being of any such money and other property, and shall, if necessary, give other particulars considered relevant to the context. Section 14. Notice for confiscation. - (1) Upon receipt of an application made Under Section 13 of this Act, the authorised officer shall serve a notice upon the person in respect of whom the application is made (hereafter referred to as the person affected) calling upon him withi....
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.... Provided that if the market price of the property confiscated is deposited with the authorised officer, the property shall not be confiscated. (4) Where any share in a Company stands confiscated to the State Government under this Act, then, the Company shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or the Articles of Association of the Company, forthwith register the State Government as the transferee of such share. (5) Every proceeding for confiscation of money or property or both under this Chapter shall be disposed of within a period of six months from the date of service of the notice Under Sub-section (1) of Section 14. (6) The order of confiscation passed under this section shall, subject to the order passed in appeal, if any, Under Section 17, be final and shall not be called in question in any Court of law. Section 16. Transfer to be null and void. - Where, after the issue of a notice Under Section 14 any money or property or both referred to in the said notice are transferred by any mode whatsoever, such transfer shall, for the purposes of the proceedings under this A....
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....avit stating the grounds on which the belief as regards the commission of the offence and the amount of money and many other aspects. An application has to be filed by the Public Prosecutor. The Public Prosecutor before he files an application Under Sub-section (1) of Section 13, is required to be first satisfied with regard to the aspects enumerated in Sub-section (2). Sub-section (2) obliges the Public Prosecutor that requirements are satisfied for filing the application. In view of the said position, it cannot be said that there is lack of guidance. It is not that the authority has the discretion to get an application filed through the Public Prosecutor or not. It is not that a mere discretion is left to the Public Prosecutor. The authority has only been authorised to scrutinize the offence and authorise the Public Prosecutor and thereafter the Public Prosecutor has been conferred the responsibility which is manifestly detailed, and definitely guided, to file the application. Thus scrutinized, the said provision does not offend Article 14 of the Constitution. 128. Having said about the guidance, we would like to make it clear that the word "may" used in Section 13 has to be u....
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....d proceed to record a finding whether all or any other money or properties in question have been acquired illegally. He is statutorily required to afford reasonable opportunity of being heard to the affected person. He is obliged under the law to declare that such money or property or both shall stand confiscated free from all encumbrances. Sub-Section 5 of Section 15 stipulates that the proceeding for confiscation shall be disposed of within a period of six months from the date of notice issued Under Sub-section (1) of Section 14. The order of confiscation as envisaged Under Section 15(6) is subject to appeal. Mr. R.K. Dash, learned senior Counsel appearing for some of the Appellants would contend that it is a draconian law taking the society back to the dark days. The provisions are criticized that once a confiscation takes place free from all encumbrances, the right, title and interest to the property or the money gets extinguished. It is urged that same cannot be done without a proper trial. Learned Counsel for the State would lay emphasis on the ill-gotten wealth. He has referred to an extract of the 160th Law Commission Report. We have been commended to certain judgments of t....
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....efugee Administrator of Burma Refugee Organisation and he was believed to have embezzled large sums of money belonging to Government which were at his disposal. The prosecution was initiated Under Sections 120-B and 409 of the Indian Penal Code before coming into force the Second Special Tribunal constituted under the Criminal Law Amendment Ordinance, No. 29 of 1943. During the pendency of the case, the Criminal Law Amendment Ordinance 30 of 1944 was passed. The Court took note of the fact that the object of the Ordinance was to prevent disposal or concealment of money or other property procured by means of certain scheduled offences punishable under the Indian Penal Code and one of the offences to which the Ordinance applied was 409 Indian Penal Code apart from other offences. The Respondent was convicted by the Special Tribunal on August 31, 1949 by which Criminal Law (1943) Amendment amending Ordinance No. 12 of 1945 had come into force. Relying on the said Ordinance, the Special Tribunal apart from imposing a substantial sentence of rigorous imprisonment for five years, directed a fine of Rs. 45 lakhs to be paid on the charge of conspiracy. The Respondent preferred an appeal be....
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.... Ordinance. This Court referred to Section 13 of the 1944 Ordinance which deals with the disposal of attached property upon termination of criminal proceeding. The court referred to Section 5 that provides for investigation of objection to attachment and the authority of the District Judge Under Sub-Section 3 of Section 5 to pass an order making the attachment absolute or varying it by releasing a portion of the property from attachment or withdrawing the order. In the said case, the District Judge had made the order absolute and the properties had continued under attachment. The Court referred to Section 3 to opine that there are two kinds of properties which are to be attached. The first property which has been procured by the commission of the offence, whether it be in the form of money or in the form of movable or immovable property, and second properties are other than the above. The Respondent in the said case had been charged with embezzlement of money and that was why an application for attachment Under Section 3 was made that he had used the money procured by commission of offence in purchasing certain properties. The Court referred to Section 13 and ruled that the Distric....
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....) of the 1944 Ordinance. The result of the two findings in our opinion is exactly the same, the only difference being that Under Section 10 of the 1943 Ordinance, as amended in 1945, the court may do this suo moto while Under Section 12(1) of the 1944 Ordinance it has to be done on the representation made by the prosecution. 133. Thereafter the Court noted the reasoning of the other learned Judge and opined that it was not necessary in the said appeal to decide whether the case would come within the ambit of Articles 20(1). This opinion was expressed principally on the ground that the forfeiture provided Under Section 13(3) is not a penalty at all within the meaning of Article 20(1). In that context, the Court analyzed the provisions of the 1944 Ordinance and came to hold that: ...The forfeiture by the District Judge Under Section 13(3) cannot in our opinion be equated to forfeiture of property which is provided in Section 53 of the Indian Penal Code. The forfeiture provided in Section 53 is undoubtedly a penalty or punishment within the meaning of Article 20(1); but that order of forfeiture has to be passed by the court trying the offence, where there is a provis....
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....ings for confiscation to the Government of such timber or forest produce and the implements, etc., if the Authorized Officer Under Section 44(2A) of the Act is satisfied that a forest offence has been committed, along with a criminal case instituted on a complaint by the Forest Officer before a Magistrate of the commission of a forest offence Under Section 20 of the Act. Answering the said issue, the Court scrutinized the amended provisions that were brought into force by Act of 1976 and came to hold that: The conferral of power of confiscation of seized timber or forest produce and the implements, etc., on the Authorized Officer Under Sub-section (2A) of Section 44 of the Act on his being satisfied that a forest offence had been committed in respect thereof, is not dependent upon whether a criminal prosecution for commission of a forest offence has been launched against the offender or not. It is a separate and distinct proceeding from that of a trial before the Court for commission of an offence. Under Sub-section (2A) of Section 44 of the Act, where a Forest Officer makes report of seizure of any timber or forest produce and produces the seized timber before the A....
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.... under the Act and not impose any 'sentence' for the commission of an offence. The expression 'penalty' is a word of wide significance. Sometimes, it means recovery of an amount as a penal measure even in civil proceedings. An exaction which is not compensatory in character is also termed as a 'penalty'. When penalty is imposed by an adjudicating officer, it is done so in "adjudicatory proceedings" and not by way of fine as a result of 'prosecution' of an 'accused' for commission of an 'offence' in a criminal court. Therefore, merely because 'penalty' clause exists in Section 23(1)(a), the nature of the proceedings under that section is not changed from 'adjudicatory' to 'criminal' prosecution. An order made by an adjudicating authority under the Act is not that of conviction but of determination of the breach of the civil obligation by the offender. 136. In this regard, reference to a recent two-Judge Bench decision in Biswanath Bhattacharya v. Union of India and Ors. (2014) 4 SCC 392 would be apt. In the said case the Court was dealing with forfeiture under the Smugglers and Foreign Exchange Manipulators (....
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...., it is provided Under Section 19 where an order of confiscation made Under Section 15 is modified or annulled by the High Court in appeal or the where the person affected is acquitted by the special court, the money or property or both shall be returned to the person affected. Thus, it is basically a confiscation which is interim in nature. Therefore, it is not a punishment as envisaged in law and hence, it is difficult to accept the submission that it is a pre-trial punishment and, accordingly, we repel the said submission. 138. The next facet of the said submission pertains to retrospective applicability. The submission has been put forth on the ground that by transfer of cases to the Special Courts under the Orissa Act in respect of the accused persons who are arrayed as accused under the 1988 Act, have been compelled to face harsher punishment which is constitutionally not permissible. It is contended that there was no interim confiscation under the 1988 Act but under the Orissa Act they have to face confiscation. We have already opined that confiscation is not a punishment and, therefore, Article 20(1) is not attracted. Thus, the real grievance pertains to going through th....
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....tachment during trial and forfeiture after conviction but by virtue of the Orissa Act they are compelled to face confiscation as a consequence of which they are deprived of the possession and the property goes to the State Government. Learned Counsel for the State would submit that the forfeiture is provided after the conviction as the property has to be forfeited and embezzled amount requires to be realized but it does not debar the legislature to provide confiscation of property as an interim measure by providing an adequate adjudicatory process. It is also submitted that the offence Under Section 13(1)(e) has its gravity and, therefore, the stringent interim measure is the requisite. Alternatively, it is argued that when forfeiture was prescribed, and attachment of property was provided as an interim measure, different arrangement, may be a stringent one, can always be provided by the legislature. 140. We have already held that confiscation is not a punishment and hence, Article 20(1) is not violated. Learned Counsel for the State would lay stress on the decision in State of Andhra Pradesh and Ors. v. CH. Gandhi (2013) 5 SCC 111. In that case, the issue that arose for conside....
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....tirement is a lesser punishment than dismissal or removal as the pension of a compulsorily retired employee, if eligible to get pension under the Pension Rules, is not affected. Rule 9(vii) was only dealing with reduction or reversion but issuance of any other direction was not a part of it. It has come by way of amendment. The same being a lesser punishment than the maximum, in our considered opinion, is imposable and the disciplinary authority has not committed any error by imposing the said punishment, regard being had to the nature of charges. It can be looked from another angle. The rule-making authority has split Rule 9(vii) into two parts--one is harsher than the other, but, both are less severe than the other punishments, namely, compulsory retirement, removal from service or dismissal. The reason behind it, as we perceive, is not to let off one with simple reduction but to give a direction about the condition of pay on restoration and also not to impose a harsher punishment which may not be proportionate. In our view, the same really does not affect any vested or accrued right. It also does not violate any constitutional protection. 142. We are absolutely conscious that....
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....he basis of which the State Government believes that the delinquent officer has procured the property by means of the offence. Thus, reasons have to be stated in the application and it has to be clearly averred that the property has been acquired by means of the offence as defined under the Orissa Act. The authorised officer is a judicial officer and is required to afford reasonable opportunity of hearing to the accused or any other person operating the property on his behalf. Discretion is also conferred on the authorised officer to record a finding whether all or any other money or property in question have been acquired illegally. The said authority can drop the proceedings or direct confiscation of all or some properties. Affording of a reasonable opportunity of hearing is not confined only to file affidavits. We are inclined to think that when the delinquent is entitled to furnish an explanation and also put forth his stand, he certainly can bring on record such material to sustain his explanation. Confiscation proceeding as provided Under Sub-section (3) of Section 15 is subject to appeal. In view of the scheme of the Orissa Act, there can be no shadow of doubt that there is ....
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....dealing with the word "encumbrance", the Court has expressed thus: "Encumbrance" actually means the burden caused by an act or omission of man and not that created by nature. It means a burden or charge upon property or a claim or lien on the land. It means a legal liability on property. Thus, it constitutes a burden on the title which diminishes the value of the land. It may be a mortgage or a deed of trust or a lien of an easement. An encumbrance, thus, must be a charge on the property. It must run with the property. (Vide Collector of Bombay v. Nusserwanji Rattanji Mistri AIR 1955 SC 298, H.P. SEB v. Shiv K. Sharma (2005) 2 SCC 164 and AI Champdany Industries Ltd. v. Official Liquidator (2009) 4 SCC 486) In view of the aforesaid enunciation of law, the words "free from all encumbrances" in the provision under assail has to be conferred constricted meaning, for it is interim confiscation and definitely it is not equivalent to vesting. Hence, the contention on the said score founders. 148. The next plank of submission relates to creation of a dent in the basic concept of fair trial, which is an integral part of Article 21 of the Constitution. In Dayal Singh v. State....
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....ial is to proceed in accordance with the Code of Criminal Procedure and subject to the provisions of the 1988 act as long as there is no inconsistency. The trial Judge is a senior judicial officer and has a trained judicial mind. If something is not to be looked into, it shall by no means be looked into. The constitutional protection Under Article 20(3) is in no way affected. That apart, Article 20(3) of the Constitution speaks about the guarantee against "testimonial compulsion". In the case of M.P. Sharma v. Satish Chandra AIR 1954 SC 300 the court has observed thus: Broadly stated the guarantee in Article 20(3) is against "testimonial compulsion". It is suggested that this is confined to the oral evidence of a person standing his trial for an offence when called to the witness-stand. We can see no reason to confine the content of the constitutional guarantee to this barely literal import. So to limit it would be to rob the guarantee of its substantial purpose and to miss the substance for the sound as stated in certain American decisions. The phrase used in Article 20(3) is "to be a witness". A person can "be a witness" not merely by giving oral evidence but also by pro....
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.... on the ground that the said provision interferes with the judicial proceeding by laying down that the said order shall not remain in force beyond the prescribed period of disposal of appeal. It appears that such a contention was not raised before the High Court, for the High Court has not dealt with the same. However, Mr. S.K. Padhi, learned senior Counsel for the Respondent-State, would submit that in the Orissa Special Courts Act, 1990 (Orissa Act 22 of 1992) contained a similar provision and the Division Bench in Kishore Chandra Patel (supra) construed the said provision by opining that the provision in Section 18(3) limiting the operation of stay order, if any, passed in appeal for a period of three months does not prohibit passing of a fresh stay order beyond that period, if a case for the same were to be made out to the satisfaction of the Court. At this stage, we may note with profit that the High Court of Patna has dealt with Section 17(3) of the Bihar Act which provides that an appeal shall be disposed of preferably within a period of six months from the date it is preferred, and stay order, if any, passed in an appeal shall not remain in force beyond the prescribed perio....
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....ay, has to be read in this manner to save it from the vice of unconstitutionality. However, we may clearly state that the High Court being a superior court having the power of judicial review shall see to it that the real purpose of the legislation is not defeated. It will be advisable and that the Chief Justice should demarcate a Bench for one day to hear these appeals. And accordingly, we so request. Needless to say, the learned Judge will endeavour to dispose of the appeal within the time frame. 155. Learned Counsel for the Appellants have seriously criticized the proviso appended to Section 18(1) of the Orissa Act. To appreciate the assail, Section 18(1) is reproduced in entirety: Section 18(1). Where any money or property or both have been confiscated to the State Government under this Act, the concerned authorised officer shall order the person affected, as well as any other person, who may be in possession of the money or property or both to surrender or deliver possession thereof to the concerned authorised officer or to any person duly authorised by him in this behalf, within thirty days of the service of the order: Provided that the authorised o....
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....sfy the authorised officer or in appeal that the dwelling house where he is residing is acquired from his known sources of income. In such a situation, we are afraid that we cannot accept the submission advanced by the learned Counsel for the Appellants and, accordingly, the same stands rejected. 156. The next provision which is challenged is Section 19 of the Orissa Act that deals with refund of confiscated money or property in the event of the order of confiscation being modified or annulled by the High Court in appeal. The said provision is necessary to be reproduced: 19. Refund of confiscated money or property. - Where an order of confiscation made Under Section 15 is modified or annulled by the High Court in appeal or where the person affected is acquitted by the Special Court, the money or property or both shall be returned to the person affected and in case it is not possible for any reason to return the property, such person shall be paid the price thereof including the money so confiscated with the interest at the rate of five per cent per annum thereon calculated from the date of confiscation. (underlining is ours) 157. The challenge of the Appellants....
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.... any manner. Confiscation, we have already opined, is done as an interim measure. The words "free from all encumbrances" have been given a restricted meaning by us as it follows from the language used in the Orissa Act. Section 19 clearly lays down return of the confiscated money or property or both. It conceives of three situations, namely, modification of the order of confiscation, or annulment of confiscation, or the eventual acquittal. In these conditions, the money or property or both are required to be returned. The words, which we have underlined in Section 19, seem to us, cannot be conferred a wide meaning. They cannot be allowed to convey that the State will not return the property. The key words are "in case it is not possible" and "for any reason". It will be an assumption to think that "for any reason" would mean any kind of subjective reason. In certain statutes or enactments the words "for any reason" can be attributed a wide meaning to subserve the legislative purpose. The term "possible", in our considered opinion, may not be given the stature or status of "impossible", which is absolute in its connotation, but the word "possible", as we perceive, in itself contains....
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....s regards the Orissa Act will apply to the Bihar Act. 160. It is significant to note here that before the High Court of Patna the validity of a Rule was assailed but the application was not pressed and the High Court has made certain observations. We intend to put the controversy to rest. Rule 12 of the 2010 Rules provides for Special Courts to follow summary procedure. Rule 12(a) and (f) read as under: (a) On institution of a case or transfer of pending proceeding to the Special Courts, trial shall be held in summary manner. (f) The delinquent public servant shall be put on trial and shall be afforded opportunity to lead evidence in support of his defence. If the special court, on the evidence of delinquent public servant is, prima facie, satisfied that he has been able to discharge his onus, the prosecution shall be called upon to lead its evidence to prove the charges against the delinquent public servant. 161. When the Bihar Act provides to follow the warrant procedure prescribed by the Code for trial of cases before a Magistrate, the 2010 Rules could not have prescribed for summary procedure. The rules have to be in accord with the Act. The ....