Research › Search › Judgment

Calcutta High Court · body

2008 DIGILAW 249 (CAL)

Lipi Cinema Pvt Ltd v. UNION OF INDIA

2008-02-29

DIPANKAR DATTA

body2008
Judgment :- (1.) THE second petitioner and his family members had purchased Lipi cinema Hail (hereinafter the said Hall) from one Rashmoni Devi (hereafter rashmoni) in the year 1995 upon payment of the consideration amount. The vendor Rashmoni had allegedly indulged in illegal dealing in contrabands and had been apprehended along with one other for possessing Ganja. Case n-38/94 under the Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter the said Act) was registered against them and after trial the accused persons were found guilty of offence under Section 8 of the said Act. Accordingly, they were sentenced to suffer imprisonment for 3 years and to pay a fine of Rs. 50,000/- each, in default to suffer further period of six months rigorous imprisonment. (2.) AFTER Rashmoni and the other accused person were convicted, the respondent authorities started an investigation under Section 68e of the said act in respect of properties allegedly acquired by her from dealing in contrabands and having come to learn that the second petitioner and his family members had purchased the said Hall, in exercise of power conferred by sections 68e and 68f of the said Act read with Section 53 thereof, restrained the present owners of the said Hall by an order dated 14. 2. 01 from parting with, transferring, selling, gifting or otherwise dealing with it without the permission of the competent authority. Grounds were also assigned by the concerned officer in support of freezing the said Hall. The order was thereafter confirmed on 12. 3. 01 under Section 68f (2) of the said Act. (3.) CHALLENGING the conviction, Rashmoni preferred an appeal before this Court and by judgment dated 20. 7. 2004, the conviction was set aside and she was directed to be released, if not wanted in any other case. (4.) THE judgment of this Court dated 20. 7. 2004 was brought to the notice of the respondents in February, 2005 but the order of freezing was not revoked. Challenging such inaction of the respondent authorities, a writ petition was filed before this Court. Upon a contesting hearing, the writ petition was disposed of on 23. 2. 07 holding that Section 68z of the said Act would be applicable in the case and that it was the duty of the authority to give effect to it. Challenging such inaction of the respondent authorities, a writ petition was filed before this Court. Upon a contesting hearing, the writ petition was disposed of on 23. 2. 07 holding that Section 68z of the said Act would be applicable in the case and that it was the duty of the authority to give effect to it. The Court proceeded to pass the following order:-This writ petition therefore is disposed of with the direction upon the concerned respondents to take an appropriate decision on the claim raised by the petitioners with regard to withdrawal of the order of freezing and release of the cinema hall in the light of the observations made hereinabove within a period of four weeks from date of communication of this order. It is, however, made clear that if the concerned respondents for some valid reason are not inclined to accede to the claim of the petitioners, in that event before a final order is passed, they shall be offered an opportunity of hearing. In the notice of hearing, they shall indicate the tentative reasons for not being able to accede to the prayers of the petitioners to enable them meet the same at the hearing. A reasoned order must be passed after hearing the petitioners. " (5.) BY notice dated 27.3.2007, the second petitioner was called upon to produce certain documents listed therein on 9.4.07 when the Competent authority would reconsider the issue. It is to be noted that in the notice of hearing, the respondent authorities did not indicate the tentative reasons for not being able to accede to the prayer of the petitioners, as was required by the order dated 23.2.07. (6.) NOTICING that tentative reasons had not been assigned in the show-cause notice, the second petitioner vide his letter dated 9. 4. 07 brought it to the notice of the respondent authorities and contended that in the absence of the tentative reasons they were having the impression that their prayers would be allowed. (7.) DESPITE receipt of the said letter, the respondent authorities did not care to communicate the tentative reasons. (8.) BE that as it may, the Competent Authority heard the second petitioner and passed an order on 13. 4. 07 rejecting the prayers of the petitioners. This order is the subject matter of challenge in the present petition. (9.) THIS Court has heard Mr. (8.) BE that as it may, the Competent Authority heard the second petitioner and passed an order on 13. 4. 07 rejecting the prayers of the petitioners. This order is the subject matter of challenge in the present petition. (9.) THIS Court has heard Mr. Roy, learned Counsel for the petitioners and Mr. Dey, learned senior Counsel for the respondent authorities. (10.) THE respondents not having furnished tentative reasons as directed by the Court by its order dated 23. 2. 07, the impugned order rejecting the petitioners prayers appear to be not in conformity therewith. It is settled law that any order/action in violation of a Courts order is a nullity. Having regard thereto, the order impugned is non-est. (11.) HOWEVER, the order impugned being unsustainable on merits too, this Court is not inclined to set it aside on technical grounds only. (12.) IN course of hearing it was conceded by Mr. Dey that apart from case N-38/94 which was initiated against Rashmoni, which has since resulted in her acquittal by reason of judgment dated 20. 7. 04 of this Honble Court, she was not involved in any other proceeding for dealing in contrabands. This court having acquitted Rashmoni, the finding of the respondent authorities that she had acquired property illegally is not established. If it has not been established that Rashmoni had ever involved herself in dealing in contrabands, invoking power under the said Act by the respondents has to be declared unauthorized. It appears from the impugned order that the Competent Authority has embarked on an investigation as to how and under what circumstances the second petitioner and his other family members could purchase the said hall for a consideration amount which was not the adequate consideration. This Court is afraid, such an investigation was beyond the scope of inquiry which was directed by this Court on the earlier occasion. If it is not established that Rashmoni had acquired property out of illegal dealing in contrabands, irrespective of the price which the said Hall fetched, the Competent Authority had no jurisdiction whatsoever to pronounce that the sale was tainted and rely on it to refuse the prayers of the petitioners. If it is not established that Rashmoni had acquired property out of illegal dealing in contrabands, irrespective of the price which the said Hall fetched, the Competent Authority had no jurisdiction whatsoever to pronounce that the sale was tainted and rely on it to refuse the prayers of the petitioners. (13.) THE further finding of the Competent Authority that the petitioners not being persons referred to in clause (f) of Section 68a (2) of the said Act and hence on the date the said Hall was freezed, the 3,500 shares did not belong to Rashmoni but belonged to the second petitioner and 5 others who were not accused in terms of clauses (a), (b) or (cc) of Section 68a (2) thereof and, thus, the property cannot be released in their favour since Section 68z would not be applicable, is equally unmeritorious. It is not in dispute that the order of freezing was made at a time when Rashmoni was not the owner of the said Hall; instead it was the second petitioner and his family members who were the owners. Order of freezing having been made admittedly after conviction was recorded against Rashmoni and at a time when the second petitioner and his family members were the owners, and the respondent authorities having not questioned the order of acquittal of Rashmoni by preferring an appeal before a superior Court, no one could contend with any degree of conviction that Rashmoni indulged in dealing in contrabands and out of its proceeds acquired shares of the said Hall. The second petitioner and his family members being subsequent purchasers had to suffer the order of freezing only because Rashmoni was convicted. Setting aside of the conviction of Rashmoni on 20.7.2004 attained finality and rendered the order of freezing inoperative in the absence of any appeal thereagainst. In such circumstances, the only course open to the respondents was to act in terms of Section 68z of the said Act. By the order dated 23.2.07, this Court granted opportunity to the respondents to act in accordance with taw. Whether or not the property freezed should be released was directed to be considered according to observations made in the order. Exercise of power in terms of the statute by the Competent authority therefore, ought to have been fair and reasonable. By the order dated 23.2.07, this Court granted opportunity to the respondents to act in accordance with taw. Whether or not the property freezed should be released was directed to be considered according to observations made in the order. Exercise of power in terms of the statute by the Competent authority therefore, ought to have been fair and reasonable. (14.) HOWEVER, understanding of Section 68z of the said Act by the competent Authority appears to be flawed. Section 68z of the said Act does not speak of release of the f reezed property belonging to the persons mentioned in clauses (a), (b) or (cc) of Section 68a (2) thereof as mentioned in the impugned order; all that it ordains is that the freezed property shall be released irrespective of the owner thereof, if the person referred to in those clauses has been acquitted or discharged and such order has attained finality. There is no reason as to why persons referred to in clause (b) of Section 68a (2) of the said Act (the present holder) (read: the second petitioner and the other owners) shall not be entitled to derive benefit of acquittal or discharge of the previous holder (read: Rashmoni). (15.) THE Competent Authority by observing that Section 68z of the said act would not be applicable, despite the pretended show of humility, appears to have sat in appeal on this Courts order dated 23. 2. 07. He ought to have borne in mind that being an administrative authority, he has no competence to sit in appeal on a judicial order. This Court, thus, finds that the Competent authority in making the impugned order has not applied the correct test and despite being given an opportunity of exercising power fairly and reasonably, has abused it. (16.) IN the result, the impugned order dated 13. 4. 2007 stands set aside. Since the order dated 14. 2. 2001 passed by the respondent authorities freezing the said Hall, since confirmed, has become inoperative with the conviction of rashmoni being set aside and no action has been taken by the respondents in terms of Section 68z (2) of the said Act, there shall be further orders in terms of prayers (e) and (c) of the petition. The writ petition stands allowed without order for costs.