TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 1703
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....ava, 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) No. 3085 of 2013. 3. In this batch of appeals, by....
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....rcise 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. Section 2(f) provides that words and expressions used herein an....
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....he 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 offence and further it makes the confiscation subject to the o....
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....fuses 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 anything contained in any of the law, no suit or any other legal proceed....
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.... 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 course deal with the said challenge but the five questions posed by the High Court are enumerated herein: &....
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....st 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, 2002 provide that in case of specified offence under the Indian Penal Code (Indian Penal Code), Narcotic Drugs and Psychotropic Substances Act, ....
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.... 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. Rule 13 deals with the application of Code of Criminal Procedure and it stipulates that the provisions of the Code shall apply to the proceedings....
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....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 effective; that it neither offends Article 20(1) nor Article 20(3) of the Constitution, for the plea that accused persons would be exposed to harsher punis....
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....rusted 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 definite pointer that the legislature has only indicated its preference that the appeal should be disposed of within a period of six months but it also perm....
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....e 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 properties is justified. That apart, the Court held that once the relevant purpose is to confiscate all the ill-gotten money or property, even if such property....
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....s, 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, Mr. Gopal Singh, Mr. Shibashish Misra and Mr. Nishant Ramakantrao Katneshwarkar, learned Counsel for the Respondents. 26. At the outset, we think it appropriate to mention....
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....r 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 governance. A democratic republic polity hopes and aspires to be governed by a government which is run by the elected representatives who do not have any involvement in serious criminal offences o....
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....ers. 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 provisions and not for all the provisions of the Orissa Act and, therefore, it suffers from substantial illegality which has made the Act unconstitutional. (D) The provisions contained in the Orissa Act cover many a ran....
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....on 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 consequence of which they have to face a pre-trial confiscation which was not there in the 1988 Act and that clearly violates the basic tenet of Article 20(1) of the Constitution, for the provisions of the Act cannot be allowed to operate retrospectively when it imposes a different kind of punishm....
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.... 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 categories of offences as the offence Under Section 13(1)(e) relates to amassing of wealth disproportionate to the income of the person. (VI) The stand that the Act does not define "high political office" and "high public office" and hence, confers unfettered discretion on the executive is sans substance, for the said words are well understood ....
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....assification 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 opportunity to the delinquent officer. Therefore, it is not hit by Article 14 of the Constitution. (XIII) The criticism that the provision for order of stay passed by the appellate court, that is, the High Court, shall remain in force for a period of three months may be treated as a directory provision so as to require the court to dispose of the appeal within three months; and the order of ....
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....rocedure 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 scrutiny is prohibited if the complaint against the procedure is not more than that the procedure was irregular. Thus, the said authority has made a distinction between illegality of procedure and irregularity of procedure. 36. Our attention has also been drawn to certain paragraphs from the Constitution Bench decision in Raja Ram Pal v. Hon'ble Speaker, Lok Sabha and Ors. (2007) 3 SCC 184. In the said case, in pa....
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....e 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 irregularity or unconstitutionality are not protected from judicial scrutiny. Eventually, the Court repelled the challenge. 38. In our considered opinion, the authorities cited by the learned Counsel for the Appellants do not render much assistance, for the introduction of a bill, as has been held in Mohd. Saeed Siddiqui (supra), comes within the concept of "irregularity" and it does come with the realm of substantiality. What has been held in the S....
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....ressly 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 therein was that the appellate power of the High Court in respect of substantial question of law could not have been taken away by the Parliament. Defending the legislation, the Respondents apart from other grounds, had also laid emphasis on Article 247 and we have reproduced the paragraph from the judgment. It has to be borne in mind that this Court was dealing with the abolition of the appellate jurisdiction enshrined Under Article 260A of the Income Tax Act, 1961 by....
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....e 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 jurisdiction is covered under the topic "administration of justice". After 3-1-1977 a part of Entry 3 namely "administration of justice" is shifted to List III under Entry 11-A. This only shows that the topic "administration of justice" can now be legislated both by the Union as well as the State Legislatures. As long as there is no Union legislation touching the same topic, and there is no inconsistency between the Central legislation and State legislation on this topic, it....
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....; 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 concerned, the power can be exercised by the Union and the State legislature. The purpose of Article 247, which commences with a non-obstante clause, is to confer power on the Parliament to create additional courts for the better administration of a particular Union law, but it cannot be said that the State cannot make laws for adjudication and administration of justice in respect of a parliamentary legislation more so, when initially power was conferred Under Section 3 of the 1988 Act and assent has been accorded for establishme....
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....r 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-obstante clause in Article 246(1) read with the opening words "subject to" in Article 246(3). In such a case, the State law will fail not because of repugnance to the Union law but due to want of legislative competence. It is no doubt true that the expression "a law made by Parliament which Parliament is competent to enact" in Article 254(1) is susceptible of a construction that repugnance between a State law and a law made by Parliament may take place outside the concurrent sphere because Parliament is competent to enact law with respect to s....
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....nconsistency 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 consideration of the President and has received his assent, prevail in that State. The question of repugnancy can arise only with reference to a legislation made by Parliament falling under the Concurrent List or an existing law with reference to one of the matters enumerated in the Concurrent List. If a law made by the State Legislature covered by an entry in the State List incidentally touches any of the entries in the Concurrent List, Article 254 is not attracted. But where a law covered by an entry in the State List (or an amendment to a law ....
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....ficulty 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 principle of repugnancy would be attracted and the legislation can be saved or not saved, it is necessary to focus on Clause (2) of Article 254. In Hindustan Times v. State of U.P. (2003) 1 SCC 591, after referring to the earlier judgments, it has been held that Clause 254(2) carves out an exception and, that is, if the Presidential assent to a State law which has been reserved for his consideration is obtained Under Article 200, it will prevail notwithstanding the repugnancy to an earlier law of the Union. The relevant passage of the said authority is extra....
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.... 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 the earlier law made by Parliament and the necessity of having such a law, in the facts and circumstances of the matter, which is repugnant to a law enacted by Parliament prevailing in a State. The word "consideration" would manifest that after careful thinking over and due application of mind regarding the necessity of having State law which is repugnant to the law made by Parliament, the President may grant assent. This aspect is further reaffirmed by use of the word "assent" in Clause (2), which implies knowledge of the President to the repugnancy between the S....
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....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 regard to the repugnancy between the State law and specified Central law or laws. 62. In this regard, we may extract a passage from P.N. Krishna Lal (supra) wherein the Court, after referring to the decision in Gram Panchayat, Jamalpur v. Malwinder Singh (1985) 3 SCC 661 ruled that: ...it is clear that this Court did not intend to hold that it is necessary that in every case the assent of the President in specific terms had to be sought and given for special reasons in respect of each enactment or provision or provisions. On the other hand, the observation clearly indicates that if the as....
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....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 states that it is not examining the issue whether such an assent can be taken as an assent. 65. Such an interpretation would also open the judgment to a charge of being, with respect, per incuriam as even though while noting the Jamalpur case (supra), it overlooks the extracts in Jamalpur case (supra) dealing with the aspect of general assent: (SCC p. 669, para 12) 12....The assent of the President Under Article 254(2) of the Constitution is not a matter of idle formality. The President has, at least, to be apprised of the reason why his assent is sought if, there is any special reason for doing so. If ....
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.... 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 stated that the aforesaid Bill is similar to the Orissa Special Courts Act, 1990 earlier assented to by the President of India Under Article 254(2) of the Constitution, But it was subsequently repealed by the Orissa Special Courts (Repent and Special Provision) Act, 1995. 5. The Governor of Orissa has been pleased to reserve the Bill for consideration and assent of the President of India Under Article 254(2) of the Constitution. 6. Three authenticated copies of the Governor of Orissa alongwith another six copies of such Bill as introduced and passed by the Orissa Legislative Assembly are forwarded herewith, which may kindly be placed before the President of India for favour of his kind consideration and assent. 7. The ....
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.... 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 occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statute continue to operate in the same field. 68. In J.B. Educational Society (supra) the Court, after referring to M. Karunanidhi (supra), laid down the following principle: Parliament has exclusive power to legislate with respect to any of the matters enumerated in List I, notwithstanding anything contained in Clauses (2) and (3) of Article 246. The non obstante clause Under Article 246(1) indicates the predominance or supremacy of the law made by the Union Legislature in the event of an overlap of the law made by Parliament with respect to a matter enumerated in List I and a law made by the State Legislature with respect to a matter enumerated in List II of the S....
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....ng 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 authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country; provided further that, notwithstanding anything contained in first proviso, any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing) on the basis of, material in his possession, that if such property involved in money-laundering is not attached immediately under Chapter III, the non-attachment of the property is likely to frustrate any proceeding under this Act. Su....
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....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 property involved in the Prevention of Money-Laundering Act, confirmation of attachment of property or retention or freezing of the property, taking over of the possession by the competent authority, the order to be passed by the Special Court after conclusion of the trial of the offence, the resultant effect where the Special Court finds the offence of money laundering has not taken place, the circumstances in which the property would vest in the Central Government free from all encumbrances, the management of confiscated properties during the interregnum period, the role of the Administrator, the power of Central Government to dispose of the property, the role attributed to various authorities to conduct search and seizure at various places, the action to be taken in a situation while it is not practical to seize a frozen prop....
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....ing 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 Narcotic Drugs and Psychotropic Substances Act, 1985, etc. Part B (Containing Para 1 to Para 25) was omitted by Act 2 of 2013, Section 30(ii) (w.e.f. 15-2-2013, vide S.O. 343(E), dated 8-2-2013) and earlier Part B was amended by Act 21 of 2009, Section 13(ii) (w.e.f. 1-6-2009). Part C deals with an offence which is the offence of cross border implications and is specified in Part A or the offences against property under Chapter XVII of the Indian Penal Code. 76. At this juncture, it is appropriate to note that in 2009, the Prevention of Money-Laundering Act, 2002 was amended whereby the offences Under Section 13 of the 1988 Act was incorporated in Part B of the Schedule. It may be mentioned that same has been deleted in 2013 inasmuch as the entire Part B has been deleted. The High Court in the impugned judgment has referred to Entries 93 ....
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.... 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 learned Counsel for the Appellants that there is repugnancy between the two Acts and the Orissa Act is invalid as no assent was obtained in respect of the Prevention of Money-Laundering Act, 2002. We may hasten to clarify that we have not addressed the issue on the impact of the deletion of Part B of the Schedule in 2013 as the legislature may have deleted it in its own wisdom. 79. Next, we shall advert to the assail made in respect of certain provisions of the Orissa Act. Attack on two provisions, namely, Section 5 and 6, is basically on Article 14 and Article 20(1) of the Constitution. We shall first address to the challenge made Under Article 14 and thereafter deal with the assail Under Article 20(1) while we will be addressing the constitutional validity of other provisions, for it has been contended before us by the learned Counsel for the A....
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.... 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 in respect of the offence shall be instituted only in a Special Court. (2) Where any declaration made Under Section 5 relates to an offence in respect of which a prosecution has already been instituted and the proceedings in relation thereto are pending in a Court other than Special Court, such proceedings shall, notwithstanding anything contained in any other law for the time being in force, stand transferred to Special Court for trial of the offence in accordance with this Act. 83. The stand of the learned Counsel for the Appellants is that Section 5 of the Orissa Act confers uncanalised and unfettered discretion on the State Government to make a declaration as a consequence of which the delinquent officer will have to face the prosecution in the Special Court. No guidance has been provided and in the absence of any guidance, the exercise of power would be arbitrary a....
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....ond 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 statements. They do not speak for the Parliament. No one may speak for the Parliament and Parliament is never before the court. After Parliament has said what it intends to say, only the court may say what the Parliament meant to say. None else. Once a statute leaves Parliament House, the Court is the only authentic voice which may echo (interpret) the Parliament. This the court will do with reference to the language of the statute and other permissible aids. The executive Government may place before the court their understanding of what Parliament has said or intended to say or what they think was Parliament's object and all the facts and circumstances which in their view led to the legislation. When they do so, they do not speak for Parliament. No Act of Parliament may be struck down because of the understanding or misunderstanding of parliamentary intention by the executive Government or because ....
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....nd 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 read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statutemaker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place.... 87. In Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama 1990 AIR 981 the Court has held that: The paramount object in statutory interpret....
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....0. 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 without reference to some context". According to SUTHERLAND there is a "basic fallacy" in saying "that words have meaning in and of themselves", and "reference to the abstract meaning of words", states CRAIES, "if there be any such thing, is of little value in interpreting statures". In the words of JUSTICE HOLMES: "A word is not a crystal transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used." Shorn of the context, the words by themselves are "slippery customers". Therefore, in determining the meaning of any word or phrase in a statute the first question to be asked is "what is the natural or ordinary meaning of that word or phrase in its context in the statute? It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intention of the legislature that it is proper to look for....
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....he 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 incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitution. The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible to gather the intentions of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made.... 95. In Suresh Kumar Koushal v. Naz Foundation (2014) 1 SCC 1, the Court held that: Another significant 8 canon of determination of constitutionality is that the courts would be reluctant to declare a law invalid or ultra vires on account of unconstitutionality. The courts would accept an interpretation, which would be in favour of constitutionality rather than the one which would render the law unconstitutional. Declaring the law unconstitutional is one of the last resorts taken by the courts. The courts would preferably put into service the principle of "reading do....
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....re, 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 would uphold the constitutional validity, but on the base of above interpretation. The argument and challenge would fail, once on interpretation it is held that there is no element of discretion and only prima facie satisfaction is required as laid down hereinabove. 99. Having said that, we shall dwell upon the argument which is raised with regard to classification part, that is, that the persons holding "high public or political office" are being put in a different class 'to face a trial in a different court under a different procedure facing different consequences, is arbitrary and further the provision suffers from serious vagueness. The other aspect which has been seriously pyramided by the learned Counsel for the Appellants pertains to transfer of cases to the Special Court once declaration is made. 100. Learned Counsel for the State has also referred to the rules to show that to avoid any kind of confusion a definition has been introduced in the rules. It is obligatory to m....
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....he 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 said provision is not akin to what has been referred to in the case in Hotel Balaji (supra). True it is, the said decision was rendered in the case of legislative competence but it has been cited to highlight that unless the condition as mentioned therein is satisfied, rules cannot be treated as a part of the Act. Thus analysed, the submission of the learned Counsel for the State that the Rules have clarified the position and that dispels the apprehension of exercise of arbitrary power, does not deserve acceptance. 103. Having not accepted the aforesaid submission, we shall proceed to deal with the real thrust of the submission on this score. It is urged by Mr. Padhi, learned senior Counsel for the State of Odisha, that the principles stated in the decision in V.C. Shukla (supra) will apply on all fours. 104. In the Special Courts Bill, 1978 (supra), may it be noted, the President of India had made a reference to this Court Under Article 143(1) of the Constitution for consideration of the question wh....
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....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 Court. 106. Thereafter, the Court referred to certain periods as mentioned in the preamble and in that context, opined that: ...But persons possessing widely differing characteristic, in the context of their situation in relation to the period of their activities, cannot by any reasonable criterion be herded in the same class. The antedating of the emergency, as it were, from June 25 to February 27, 1975 is wholly unscientific and proceeds from irrational considerations arising out of a supposed discovery in the matter of screening of offenders. The inclusion of offences and offenders in relation to the period from February 27 to June 25, 1975 in the same class as those whose alleged unlawful activities covered the period of emergency is too artificial to be sustained. 107. The Court recorded its conclusion in paragraph 120 as follows: The Objects and Reasons are informative material guiding the court about the purpose of a legislation and the nexus of the differentia, if any, to the end in view.....
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....ned nor the offence being delineated so as to make the prosecution of such offenders a practical reality. Dealing with the said contention, the Court held: 24. As regards the definition of "high public or political office" the expression is of well-known significance and bears a clear connotation which admits of no vagueness or ambiguity. Even during the debate in Parliament, it was not suggested that the expression suffered from any vagueness. Apart from that even in the Reference case Krishna Iyer, J. referred to holders of such offices thus: (SCC pp. 440, 441, paras 107, 111) ...heavy-weight criminaloids who often mislead the people by public moral weight-lifting and multi point manifestoes... such super-offenders in top positions.... 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. 25. It is manifest from the observations of Krishna Iyer, J., that persons holding high public or political offices mean persons holding top positions wielding large powers. 109. Thereafter, the three-Jud....
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....actions are tainted by breach of trust, corruption or other extraneous considerations, they would damage the interests of the country. It is, therefore, not only proper but essential to bring such offenders to book at the earliest possible opportunity. 110. After so stating, the Court referred to Clause 4 of the preamble and opined thus: 31. The words "powers being a trust" clearly indicate that any act which amounts to a breach of the trust or of the powers conferred on the person concerned would be an offence triable under the Act. Clause (4) is wide enough to include any offence committed by holders of high public or political offices which amounts to breach of trust or for which they are accountable in law and does not leave any room for doubt. Mr. Bhatia, however, submitted that even if the person concerned commits a petty offence like violation of municipal bye-laws or traffic rules he would have to be prosecuted under the Act which will be seriously prejudicial to him. In our opinion, this argument is purely illusory and based on a misconception of the provisions of the Act. Section 5 which confers powers on the Central Government to make a declaration clearly refer....
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....ublic or high political office' though there can be cases where holders of low public office can amass assets by illegal means but they would not be liable to face confiscation proceedings as provided under the Orissa Act. It has been argued that the classification is not to be done on the basis of post which a public servant holds. 113. We have already referred to the term "offence". The Orissa Act defines the offence to make it come within the compartment of Clause (e) of Sub-Section 1 of Section 13 of the 1988 Act. The submission on behalf of the learned Counsel for the Appellants is that the classification is arbitrary, unwarranted and unjustified as there is no rationale behind it. Learned Counsel have referred to the offences Under Sections 7, 8, 9 and 12 of the 1988 Act. The said offences relate to different situations, whereas Section 13 deals with criminal misconduct by a public servant. The said provision reads as follows: Section 13. Criminal misconduct by a public servant. - (1) A public servant is said to commit the offence of criminal misconduct,- (a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for....
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....rently, it is a classification qua a singular class. It is to be noted that Section 13(1)(e) has its own significance in the context of the range of offences provided under the 1988 Act. Section 13(1)(e) covers a period which is called check period. It pertains to amassing of disproportionate assets. The condition precedent is that accused is prima facie found in possession of disproportionate properties or possessing resources not known to his sources of income. It is obligatory on the part of the accused in that case to explain his sources, which has been the basis for accumulating the assets which are alleged to be disproportionate. The offences Under Section 13(1) (a) to (d) in a broad way can be called incident specific or situation specific whereas the offence Under Section 13(1)(e) is period specific and it is not incident specific. There can be different check periods. A person holding high public office or political office has opportunities to accumulate disproportionate assets other than his known sources of income. It has been submitted by the learned Counsel for the Appellants that disproportionate assets can be accumulated by the persons working in the lesser rank or n....
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....e test of permissible classification two conditions must be fulfilled namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases, namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure. 116. Recently, in Satyawati Sharma (Dead) by L.Rs. v. Union of India and Anr. (2008) 5 SCC 287, the Court, after reproducing the principles stated in Shri Ram Krishna Dalmai (supra), has referred to the various principles that have been enunciated in that case by Chief Justice S.R. Das. We may profitably reproduce the same: (a) that a law may be constitutional even though it relates to a sin....
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....he Dalmia case the Ordinance cannot be said to be discriminatory and, therefore, violative of Article 14 of the Constitution. 118. In C.I. Emden v. State of Uttar Pradesh AIR 1960 SC 548, the Constitution Bench, while considering the presumption raised Under Section 4(1) of the Prevention of Corruption Act, 1947 has ruled that: Legislature presumably realised that experience in courts showed how difficult it is to bring home to the accused persons the charge of bribery; evidence which is and can be generally adduced in such cases in support of the charge is apt to be treated as tainted, and so it is not very easy to establish the charge of bribery beyond a reasonable doubt. Legislature felt that the evil of corruption amongst public servants posed a serious problem and had to be effectively rooted out in the interest of clean and efficient administration. That is why the legislature decided to enact Section 4(1) with a view to require the raising of the statutory presumption as soon as the condition precedent prescribed by it in that behalf is satisfied. The object which the legislature thus wanted to achieve is the eradication of corruption from amongst public servants, a....
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....hanted. So it is time, if peaceful transformation is the constitutional scheme, to begin by pre-emptive steps of quick and conclusive exposure and conviction of criminals in towers of power--a special class of economic offenders with abettors from the Bureaucracy and Big Business, as recent Commission Reports trendily portray and portent. Such is the simple, sociological substance of the classificatory discrimen which satisfies the egalitarian conscience of Article 14. (Emphasis supplied) 120. From the above stated ratiocination, it is quite evincible that there is a difference, a demonstrable one, between the offence Under Section 13(1)(e) and the rest of the offences enumerated in Section 13. Section 13(1)(e) targets the persons who have disproportionate assets to their known sources of income. This conceptually is a period offence, for it is not incident specific as such. It does not require proof of corruption in specific acts, but has reference to assets accumulated and known sources of income in a particular period. The test applicable and proof required is different. That apart, in the context of the present Orissa Act it is associated with high public office or with politi....
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....pecial procedure regard being had to the gravity of the particular crime, the advantage to be derived by the State by recoupment of its loss, and other like considerations may have to be weighed before allotting a case to the special court which is required to impose a compensatory sentence of fine on every offence tried and convicted by it. 122. In J. Jaya Lalitha v. Union of India (1999) 5 SCC 138 the validity of Section 3 of the 1988 Act insofar as it empowers the State Government "to appoint, as many special judges as may be necessary for such or group of cases" as may be specified in the notification and the consequential exercise of power in appointing special judges to try exclusively on day to day basis the criminal cases filed against the writ Petitioner therein, was called in question. Dealing with the said facet, the two-Judge Bench opined that the said provision is not arbitrary inasmuch as the provisions sufficiently indicated the intention of the legislature and also the object of the Act that the cases of corruption are required to be tried speedily and completed as early as possible. Be it stated, the Court referred to the authorities in the Special Courts Bill, 19....
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....e legislation, it might be open to the Court to disregard the form and treat them as one law and strike it down, if in their conjunction they result in discrimination. But such a course is not open where, as here, the two laws sought to be read in conjunction are by different Governments and by different legislatures. Article 14 does not authorise the striking down of a law of one State on the ground that in contrast with a law of another State on the same subject its provisions are discriminatory. Nor does it contemplate a law of the Centre or of the State dealing with similar subjects being held to be unconstitutional by a process of comparative study of the provisions of the two enactments. The sources of authority for the two statutes being different, Article 14 can have no application. 125. Similar view was reiterated in Prabhakaran Nair v. State of Tamil Nadu and Ors. AIR 1987 SC 2117. Therefore, the question of bringing in the concept of equality qua persons who function in the other States is an unacceptable preponement and it is impossible to accept the same. 126. Now, we shall advert to the challenge relating to the grievance which is fundamentally twin in nature. First....
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....income, earnings or assets, out of which or by means of which he has acquired such money or property, the evidence on which he relies and other relevant information and particulars, and to show cause as to why all or any of 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. (2) Where a notice Under Sub-section (1) to any person specifies any money or property or both as being held on behalf of such person by any other person, a copy of the notice shall also be served upon such other person. (3) Notwithstanding anything contained in Sub-section (1), the evidence, information and particulars brought on record before the authorised officer, by the person affected, shall not be used against him in the trial before the Special Court. Section 15. Confiscation of property in certain cases - (1) The authorised officer may, after considering the explanation, if any, to the show cause notice issued Under Section 14 and the materials available before it, and after giving to the person affected (and in case where the person affected holds any money or property specified....
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....id. 127. The said provisions, as has been stated earlier, have been attacked from two angles. The first one, these provisions violate Articles 14, 20(2), 20(3) and 21 of the Constitution. The second limb of submission is with regard to the accused persons who had been facing trial under the 1988 Act prior to coming into force of the Orissa Act as a result of the transfer of case, are compelled to face harsher penalty than what was provided at the time of commission of the alleged offence. Structuring the first submission, it is contended that reasonableness of pre-trial confiscation of a person's property before he has been found guilty makes the provision unjust, unfair and arbitrary. That apart, it being a punishment, the accused cannot be allowed to face double jeopardy. Additionally, it is contended that Section 13 confers the power on the State Government to authorise the Public Prosecutor for making the application to the authorised officer for confiscation of money and other property under the Orissa Act, if the State Government believes that the said person to have been procured by means of the offence. The criticism advanced as regards the said provision is that unbri....
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....ng in respect of the other, it has to be construed that the said word relates to the purpose, that is, the application to be filed for the purpose of confiscation. This is in consonance with the legislative policy, the scheme of the Act and also the objects and reasons of the Act. The legislative policy, as declared, clearly indicates that there should not be any kind of discretion with the Government in these kinds of matters. The fulcrum of the policy, as is discernible, is that delinquent officers having disproportionate assets coming within the purview of Section 13(1)(e) have to face the confiscation proceedings subject to judicial scrutiny as the rest of the provisions do unveil. Learned Counsel for the Appellants would contend that the legislature has delegated such power on the authority which can act in an indiscriminate manner. The said submission in the context of this Act, is sans substance as we have already opined that there is no discretion to pick and choose but to see the minimum requirement, that is, the offence and the status. Nothing beyond that. 129. Sections 14 and 15 have been criticized on the ground that they introduce concept of pre-trial confiscation. As....
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....earned Counsel for the Appellants that it is "forfeiture" of property and it cannot be imposed without a trial. In this context, reference has been made to Section 53 of the Indian Penal Code which provides forfeiture of property as a punishment. It is also canvassed that the nomenclature would not make any difference when the impact tantamounts to a punishment. Emphasis is laid on the words "vest free from all encumbrances" to highlight that in its normal connotation, it would only mean that it shall stand transferred to the State. 131. Regard being had to the aforesaid submissions, it is absolutely essential to understand the concept of confiscation. In Maqbool Hussain v. State of Bombay: AIR 1953 SC 325 the Constitution Bench was dealing with the issue whether the confiscation by the customs authorities is a punishment. Dealing with the said issue, the larger Bench ruled: 17. We are of the opinion that the Sea Customs authorities are not a judicial tribunal and the adjudging of confiscation, increased rate of duty or penalty under the provisions of the Sea Customs Act do not constitute a judgment or order of a court or judicial tribunal necessary for the purpose of supp....
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....tion 10 of the 1943 Ordinance as amended in 1945 prescribing minimum limit of fine. The Respondent had approached this Court in appeal which was dismissed on the ground that it was clear that Rs. 30 lakhs have been misappropriated by the Respondent as a result of the conspiracy. On January 9, 1957, an application was made to the District Judge Under Section 13 of the 1944 Ordinance for confiscation of the property. The property stood attached Under Section 3 of the 1944 Ordinance. The learned District Judge held on a construction of Section 12 and Section 13(3) of the 1944 Ordinance that the amount of Rs. 30 lakhs together with the cost of attachment had first to be forfeited to the Union of India from the properties attached and thereafter the fine of Rs. 45 lakhs was to be recovered from the residue of the said attached property. However, as it was not possible to forfeit the properties to the value of Rs. 30 lakhs without valuation, the District Judge directed the receiver to report as to the cost of attachment including the cost of management of the property attached. He also directed the parties to submit their estimates as to the value of the property attached. The said order....
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....at: ...The Sub-section lays down that before the judgment is pronounced by the court trying the offender and it is represented to the court that an order of attachment of property had been passed Under Section 3 in connection with such offence, the court shall, if it is convicting the accused, record a finding as to the amount of money or value of other property procured by the accused by means of the offence. Clearly all that Section 12(1) requires is that the court trying the offender should be asked to record a finding as to the amount of money or value of other property procured by the accused before it by means of the offence for which he is being tried. There is no procedure provided for making the representation to the court to record a finding as to the amount of money or value of other property procured by the offence. In our view, all that Section 12(1) requires is that at the request of the prosecution the court should give a finding as to the amount of money or value of other property procured by the accused. Representation may be by application or even oral and so long as the court gives a finding as to the amount of money or value of other property procured by....
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.... Principal Court of Civil Jurisdiction can have no jurisdiction to try an offence under the Indian Penal Code. The order of forfeiture therefore by the District Judge Under Section 13(3) cannot be equated to the infliction of a penalty within the meaning of Article 20(1). Article 20(1) deals with conviction of persons for offences and for subjection of them to penalties. It provides firstly that "no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence". Secondly, it provides that no person shall be "subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence". Clearly, therefore Article 20 is dealing with punishment for offences and provides two safeguards, namely, (i) that no one shall be punished for an act which was not an offence under the law in force when it was committed, and (ii) that no one shall be subjected to a greater penalty for an offence than what was provided under the law in force when the offence was committed. The provision for forfeiture Under Section 13(3) has nothing to do with the inflictio....
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....e fact whether the accused is facing a trial before a Magistrate for the commission of a forest offence Under Section 20 or 29 of the Act. 135. In Director of Enforcement v. M.C.T.M. Corporation Put. Ltd. and Ors.: (1996) 2 SCC 471 a two-Judge Bench was addressing the issue with regard to mens rea or criminal intent for establish contravention of Section 10 punishable Under Section 23 of Foreign Exchange Regulation Act, 1947. The other issue that arose for consideration was whether Section 10(1) of FERA, 1947 was an independent provision making its contravention by itself punishable Under Section 23(1)(a) of FERA, 1947 or whether its contravention could arise only if there is a breach of some directions issued by the Reserve Bank of India Under Section 10(2) of FERA, 1947. In the said case, the High Court had opined that Section 23 was a penal provision and the proceedings Under Section 23(1)(a) were quasi criminal in nature and therefore existence of mens rea was a necessary ingredient for the commission of an offence Under Section 10 of the Act. Dealing with the said facet the Court expressed: The proceedings Under Section 23(1)(a) of FERA, 1947 are 'adjudicatory'....
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....d Act was not a penalty within the meaning of that expression occurring in Article 20, but only a deprivation of property to a legislatively identified class of persons-in the event of their inability to explain to the satisfaction of the State that they had legitimate sources of funds for the acquisition of such property. The two-Judge Bench, while explaining the stand of the Union of India, took note of the fact that the Act is made applicable to five classes of persons specified Under Section 2 of the said Act. It also observed that the conviction or the preventive detention contemplated under the Act is not the basis or cause of confiscation, but the factual basis for a rebuttable presumption to enable the State to initiate proceedings to examine whether the properties held by such persons are illegally acquired properties. In the ultimate eventuate, the Court ruled that the forfeiture provided in the said enactment was not violative of Article 20 of the Constitution. It also proceeded to state: If a subject acquires property by means which are not legally approved, the sovereign would be perfectly justified to deprive such persons of the enjoyment of such ill-gotten wealth. T....
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..... Section 2 refers to "interpretation" and in Sub-section (1) it is stipulated that "Schedule offence" in the Ordinance means an offence specified in the Schedule to the Ordinance; Section 3 deals with the application for attachment of property; Section 4 provides for ad interim attachment; Section 5 deals with investigation of objections to attachment; Section 6 provides for attachment of property of mala fide transferees; Section 7 stipulates how execution of orders of attachment shall take place; Section 8 provides for security in lieu of attachment and Section 9 deals with administration of attached property. Section 10 deals with duration of attachment and Section 11 provides for appeals. Section 13 deals with disposal of attached property upon termination of criminal proceedings. Section 13(3) reads as follows: (3) Where the final judgment or order of the Criminal Courts is one of conviction, the District Judge shall order that from the property of the convicted person attached under this Ordinance or out of the security given in lieu of such attachment, there shall be forfeited to Government such amount or value as is found in the final judgment or order of the Crimin....
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....ed rule amounted to imposition of two major penalties which was not there in the old rule. Dealing with the issue the Court referred to the rule that dealt with major penalties and the rule making power. Reference was made to the decision in Pyare Lal Sharma v. Managing Director and Ors. (1989) 3 SCC 448 wherein it has been stated that no one can be penalised on the ground of a conduct which was not penal on the date it was committed. Thereafter, the two-Judge Bench referred to the authority K. Satwant Singh v. State of Punjab: AIR 1960 SC 266 wherein it has been held thus: ...In the present case a sentence of imprisonment was, in fact, imposed and the total of fines imposed, whether described as 'ordinary' or 'compulsory', was not less than the amount of money procured by the Appellant by means of his offence. Under Section 420 of the Penal Code an unlimited amount of fine could be imposed. Article 20(1) of the Constitution is in two parts. The first part prohibits a conviction of any person for any offence except for violation of law in force at the time of the commission of the act charged as an offence. The latter part of the article prohibited the impos....
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....on that confiscation being not a punishment does not come in either of the categories. Thus viewed, the property of an accused facing trial under the 1988 Act could be attached and there can be administration by third party of the said property and eventual forfeiture after conviction. The term "attachment" has been understood by this Court in Kerala State Financial Enterprises Ltd. v. Official Liquidator, High Court of Kerala (2006) 10 SCC 709 in the following manner: The word "attachment" would only mean "taking into the custody of the law the person or property of one already before the court, or of one whom it is sought to bring before it". It is used for two purposes: (i) to compel the appearance of a Defendant; and (ii) to seize and hold his property for the payment of the debt. It may also mean prohibition of transfer, conversion, disposition or movement of property by an order issued by the court. 143. The legislature has thought it proper to change the nature and character of the interim measure. The property obtained by ill-gotten gains, ii prima facie found to be such by the authorised officer, is to be confiscated. An accused has no vested right as regards the i....
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....nce. 145. Learned Counsel for the Appellants have laid emphasis on the phraseology used in Section 15(3) of the Orissa Act. The said provision stipulates that where the authorised officer records a finding under the Section that any money or property or both have been acquired, by means of the offence, he shall make a declaration subject to the provisions of the Act, then they stand confiscated to the State Government "free from all encumbrances". It is submitted that once the property stands confiscated to the State Government free from all encumbrances, the right, title and interest of the person concerned is extinguished. The said submission, in our consideration, is on a very broad canvass. As the scheme of the Orissa Act would show, the confiscation is interim in nature. It does not assume the character of finality. Same is the position in Bihar Act. The accused is entitled to get return of the property or money in case he succeeds in appeal before the High Court against the order passed by the authorised officer or in the ultimate eventuality when the order of acquittal is recorded. The words "free from all encumbrances", in the context, are to be given restricted meaning. I....
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...., the society and a fair chance to prove to the prosecution; and then alone can law and order be maintained. 149. In Rattiram v. State of M.P. (2012) 4 SCC 516 it has been held: 39...Fundamentally, a fair and impartial trial has a sacrosanct purpose. It has a demonstrable object that the accused should not be prejudiced. A fair trial is required to be conducted in such a manner which would totally ostracise injustice, prejudice, dishonesty and favouritism. XXX 62...Decidedly, there has to be a fair trial and no miscarriage of justice and under no circumstances, prejudice should be caused to the accused but, a pregnant one, every procedural lapse or every interdict that has been acceded to and not objected at the appropriate stage would not get the trial dented or make it unfair. Treating it to be unfair would amount to an undesirable state of pink of perfection in procedure. An absolute apple-pie order in carrying out the adjective law, would only be sound and fury signifying nothing. 150. In the instant case, it is urged that when the concerned person/accused discloses his stand before the authorised officer serious prejudice is likely to be caused to him....
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....e 20(3) is "to be a witness" and not to "appear as a witness". It follows that the protection afforded to an accused in so far as it is related, to the phrase "to be a witness" is not merely in respect of testimonial compulsion in the court room but may well extend to compelled testimony previously obtained from him. It is available therefore to a person against whom a formal accusation relating to the commission of an offence has been levelled which in the normal course may result in prosecution. Whether it is available to other persons in other situations does not call for decision in this case. 152. Tested on the aforesaid enunciation of law, it can be stated with certitude that the right conferred on an accused Under Article 20(3) is not violated. We reiterate that whatever is produced before the authorised officer is not to be looked into by the trial court and neither the prosecution nor the defence can refer to the same. That is the statutory command. Therefore, the submission astutely canvassed by the learned Counsel for the Appellants is sans substance. 153. The next aspect which needs to be addressed is the validity of Section 17 of the Orissa Act which deals with appea....
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....y will lose its force during the pendency of the appeal. The High Court has laid emphasis on the word "preferably" to interpret that the intention of the legislature is that the appeal should be disposed of within six months but it does not mean that the appeal has to be disposed of within six months. The High Court has further observed that it would not be proper to construe that the prescribed period of disposal of appeal is only six months and, therefore, the stay order passed by the High Court will lose its force automatically on expiry of any particular period. It has placed the said interpretation to save the constitutionality of the provision. We have referred to the Bihar Act at this juncture as the provisions are similar to the Orissa Act except the word "preferably" used in Section 17(3) of the Bihar Act. There can be no doubt that no statutory provision can postulate that an order of stay shall not remain in force beyond the period meant for disposal of the appeal. The High Court of Patna has construed the provision by laying down stress on the word "preferably". We are disposed to think that the interpretation placed on the similar provision of the Orissa Act in Kishore....
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....iticizing the said provision, it is urged by them that by virtue of the provision pertaining to confiscation the delinquent officer/accused is compelled to face a situation where he will be disposed from his dwelling house, the so called protection given under the proviso is an illusory one. It is argued that when the money is confiscated, it is well-nigh impossible on his part to deposit the market rent to occupy even for a limited period. The argument, if we permit ourselves to say so, suffers from a fundamental fallacy. Under the scheme of the Orissa Act, the confiscation does not take place immediately on lodging of an FIR. A detailed procedure has been stipulated which is contain adequate safeguards and thereafter the order is given effect to. The proviso appended to Section 18(1) of the Orissa Act is an exception to give protection to the concerned officer to remain in possession of the house where he resides for a certain period. The person concerned is given protection subject to certain terms. It is to be borne in mind that the confiscation is associated with the property accumulated from the ill-gotten gain. It is urged that though proviso gives protection, it actually mo....
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.... being returned for a reason which is beyond the control of the State Government, then the said provision will come into play. The High Court of Patna while dealing with the similar provision contained in Section 19 of the Bihar Act in order to save its constitutionality has held that in case the confiscated property is not returned by showing good reasons that it is not possible to do so, the interest payable must be at the usual bank rate prevailing during the relevant period for a loan to purchase or acquire similar property. It has further observed that said direction is necessary in order to save the vires of Section 19 of the Bihar Act and otherwise the relevant provision would fall foul of provisions of the Constitution. The view expressed by the High Court of Patna is not correct. The provision has to be construed in a seemly manner. The language used is "in case it is not possible for any reason to return the property". Mr. Ranjit Kumar, learned senior Counsel appearing for the State of Bihar would submit that in case this Court read down the said provision, and, if it is not inclined to do so, it may apply doctrine of severability. Mr. A. Saran, learned senior Counsel for....
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....le reason and hence, it is not possible not to return the money or property or both. Such an interpretation shall save the provision from the vice of unconstitutionality. We think so as there may be situations where it may not be possible on the part of the State to return the property. No illustration need be given because it would depend upon facts of each case. The argument by the Appellants is that in such a situation the payment of value determined and the rate of interest provided in the provision is absolutely irrational and the State can appropriate the property. The aforesaid submission, though on a first blush, may look quite attractive, but on a deeper scrutiny, is bound to melt into insignificance. It is to be remembered that the proceeding is initiated for confiscation in respect of the property acquired by the offence as described under the Act. It is done on the basis of certain material brought on record. Ultimately the proceedings may not be successful but if it is not possible to return the property the State cannot be asked to compensate more than what the legislature has thought to be appropriate. It cannot be equated with acquisition. The entire proceeding is i....