Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Ranjan Gogoi, CJ and Deepak Gupta and Sanjiv Khanna, JJ has held that the power of a police officer under Section 102 of the Criminal Procedure Code, 1973 to seize any property, which may be found under circumstances that create suspicion of the commission of any offence, would not include the power to attach, seize and seal an immovable property. Khanna, J, writing the judgment for the bench, however, clarified,

“This, however, would not bar or prohibit the police officer from seizing documents/ papers of title relating to immovable property, as it is distinct and different from seizure of immovable property.”

The verdict came in a reference made by a Division Bench of Jagdish Singh Khehar and Arun Mishra, JJ vide order dated November 18, 2014, noticing that the issues that arise have far reaching and serious consequences.

Interpreting Section 102, the bench said that the language of Section 102 of the Code does not support the interpretation that the police officer has the power to dispossess a person in occupation and take possession of an immovable property in order to seize it. Section 102 is not, per se, an enabling provision by which the police officer acts to seize the property to do justice and to hand over the property to a person whom the police officer feels is the rightful and true owner.

It further explained that the expression ‘circumstances which create suspicion of the commission of any offence’ in Section 102 does not refer to a firm opinion or an adjudication/finding by a police officer to ascertain whether or not ‘any property’ is required to be seized. The word ‘suspicion’ is a weaker and a broader expression than ‘reasonable belief’ or ‘satisfaction’. The police officer is an investigator and not an adjudicator or a decision maker. This is the reason why the Ordinance was enacted to deal with attachment of money and immovable properties in cases of scheduled offences.

“In case and if we allow the police officer to ‘seize’ immovable property on a mere ‘suspicion of the commission of any offence’, it would mean and imply giving a drastic and extreme power to dispossess etc. to the police officer on a mere conjecture and surmise, that is, on suspicion, which has hitherto not been exercised.”

It was further held that the disputes relating to title, possession, etc., of immovable property are civil disputes which have to be decided and adjudicated in Civil Courts. The Court said,

“We must discourage and stall any attempt to convert civil disputes into criminal cases to put pressure on the other side.”

Gupta, J wrote a separate concurring verdict where he highlighted that the Code of Criminal Procedure itself the Legislature has in various provisions specifically used the words ‘movable’ and ‘immovable’ property as opposed to the words ‘any property’ under in Section 102, hence, the phrase ‘any property’ in Section 102 will only cover moveable property and not immovable property.

[Nevada Properties Pvt. Ltd. State of Maharashtra, 2019 SCC OnLine SC 1247, decided on 24.09.2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for PMLA Act: The Coram of Ananya Ray (Member) directed to keep an appeal filed against an order directing attachment of properties bought from proceeds of money laundering, till final disposal of the matter by Special Court.

The present appeal was filed against order vide which attachment of 14 immovable properties and 2 movable properties, which were alleged as having been acquired from the proceeds of scheduled offences under Prevention of Money Laundering Act, 2002, was confirmed.

Appellant’s main plea was that he had already been tried by the Sessions Court and been acquitted by it. Hence, once there was no scheduled offence, there could not be proceeds of crime, and therefore attachment of the properties was liable to be set aside.

The Tribunal noted that Section 43(1) of the PMLA empowers the Central Government to designate one or more Courts of Session as Special Court for the trial of offence punishable under Section 4 PMLA. Further, Section 43(2) of the Act prescribes that the Special Court shall also try an offence (other than the offence of money laundering) with which the accused may have been charged under the Code of Criminal Procedure, 1973. A joint reading of these provisions indicated that the Special Court has must try the offence of money laundering as well as the scheduled offence.

It was opined that the Session Courts had not examined Section 4 of PMLA along with the schedule offence as mandated under Section 44 of PMLA. Hence, it could not be said that appellant’s acquittal had attained finality. Since the appellant’s case had already been taken cognizance of by the Special Court, therefore the instant appeal was directed to be kept in abeyance until final disposal of the case by the Special Court.[Bharat Yadav v. Deputy Director, Directorate of Enforcement, Patna, 2019 SCC OnLine ATPMLA 2, decided on 03-04-2019]

Case BriefsSupreme Court

Supreme Court: Explaining the scope of the power of the State of Tamil Nadu to attach the immovable property of Financial Establishments under Section 3 of the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997, the Court said that the Act was enacted in order to curb the malady of financial swindlers and to protect the interest of innocent investors. Therefore, as per the procedure envisaged under Section 3 and 4 of the Act unequivocally the power to set the process into motion vests with the State Government by passing an ad-interim attachment order and thereafter act mandates appointment of competent authority under Sub-section (1) of Section 4 of the Act, to take further recourse as per the procedures laid down under Section 4 of the Act.

The Court was hearing the appeal against the order of Madras High Court setting aside the ad-interim order attaching the immovable properties of the partners of Financial Establishment, Global Capital Trading Services. Rejecting the contention of the Financial Establishment that before passing an order under section 3 of the act government has to take steps under section 4 of the act by identifying the properties, the bench of N.V. Ramana and P.C. Pant, JJ said that the High Court erred in accepting the said contention as the language employed under section 3 and 4 of the act is plain, unambiguous and it does not call for any interpretation as sort to be placed the respondents.

It was explained that while enacting the provisions the legislature has consciously given the discretion for passing an ad-interim order. it is evident from the language used in the section by inserting “Government may”. In the case on hand even before the other provisions are complied with the High Court erroneously interfered with the ad-interim order which defeats the very purpose of the provision which is incorporated to safeguard the interest of the investors. Hence, the order passed by the State Government under Section 3 of the Act attaching the immovable properties standing in the name of respondents, basing on the complaint of investors and directing the competent authority to take recourse as per the procedures contemplated under Sub-section (3) and (4) of Section 4 of the Act is valid and is very much in consonance with the provisions of the Act. [State v. K.S. Palanichamy, 2017 SCC OnLine SC 586, decided on 09.05.2017]

Case BriefsSupreme Court

Supreme Court: Allowing SEBI to attach the properties belonging to Sahara Group, the Court directed Sahara to file a list of properties that can be put to public auction by 27.02.2017.

The 3-judge bench of Dipak Misra, Ranjan Gogoi and A.K. Sikri, JJ said that the properties suggested for public auction shall be free from any encumbrance which means that the properties should not be encumbered in any manner whatsoever.

Pratap Venugopal, appearing for SEBI had submitted that the property of the contemnors, situated at Aamby Valley City, Pune, Maharashtra, would be sufficient for realization of the whole amount. He insisted that the property should be attached so that the contemnors shall make all endeavour to deposit the amount with SEBI. Accepting the aforementioned submission, the Court directed for attachment of the Aamby Valley property. The matter is listed to be heard on 27.02.2017. [Sahara India Real Estate Corpn.Ltd v. SEBI, CONMT.PET.(C) Nos.412 & 413/2012, order dated 06.02.2017]