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2014 DIGILAW 186 (ORI)

Birajini Panda v. State of Orissa

2014-03-21

S.K.MISHRA

body2014
JUDGMENT : S.K. MISHRA, J. The legal question which arises in this appeal for adjudication is whether the confiscation proceeding as envisaged under Chapter III of the Orissa Special Courts Act, 2006 (hereinafter referred to as the "OSC Act" for brevity) shall continue against other persons in whose name property has allegedly been acquired by the accused, after his death and abatement of the criminal trial initiated against him? 2. The Facts of the case are not disputed. Premananda Panda (hereinafter referred to as the deceased person affected) was a public servant holding high public office. A prosecution was lodged against him under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 (hereinafter referred to as the "P.C. Act" for brevity). In this connection, Berhampur Vigilance P.S. Case No. 15/1995 was registered. It is alleged that he was possessing disproportionate assets of Rs. 43, 86, 343.00. Upon completion of investigation, charge sheet was submitted and the case was transferred to the Court of Special Judge, Special Court, Bhubaneswar, which was registered as T.R. Case No. 18/45 of 2008/1999, against Premananda Panda. During pendency of the case, the accused Premananda Panda died on 19.5.2009. Accordingly, as per the order dated 9.9.2009 the trial Court directed that criminal case abates in its entirety and orders were passed to drop the proceeding. 3. In the meantime, after death of the said Premananda Panda, on 7.7.2009, confiscation proceeding under Section 13(1) of the OSC Act was initiated against the said Premananda Panda, his wife and children. It was alleged that wife of Premananda Panda and their children were holding properties which were acquired by commission of the offence by Premananda Panda. The persons affected namely, Birajini Panda, Manoranjan Panda, Chitaranjan Panda, Brajaranjan Panda and Madhusmita Panda filed an application to drop the proceeding of confiscation before the learned Authorized Officer. The learned Authorized Officer as per order dated 21.9.2013 in Confiscation Case No. 4/2009 rejected their application to drop the proceeding. However, on 21.9.2009 the learned Authorised Officer held that because of the death of Premananda Panda opposite party No. 1, the case abates against him. In other words, learned Authorised Officer has ordered that as far as Premananda Panda is concerned confiscation shall abates, but the said proceeding will continue as against other opposite parties, who happens to be the relations of Premananda Panda. 4. In other words, learned Authorised Officer has ordered that as far as Premananda Panda is concerned confiscation shall abates, but the said proceeding will continue as against other opposite parties, who happens to be the relations of Premananda Panda. 4. In order to properly adjudicate the issue in question, it is necessary to take note the scheme of confiscation of property as laid down in Chapter III of the OSC Act. But before that this Court takes note of the fact that the offence has been defined in Section 2 of Clause (d) of O.S.C. Act as the offence of criminal misconduct within the meaning of clause (e) of Sub-section (1) of Section 13 of the P.C. Act. 5. Section 13 of Chapter III of the OSC Act provides for the application of confiscation, which reads as follows: "13. Application for confiscation - (1) Where the State Government on the basis of prima facie evidence, have reasons to believe that any person, who held high public or political office has committed the offence, the State Government may, whether or not the Special Court has taken cognizance of the offence, authorise the Public Prosecutor for making an application to the authorised officer for confiscation under this Act for the money and other property, which the State Government believe the said person to have procured by means of the offence. (2) An application under Sub-section (1)- (a) shall be accompanied by one or more affidavit, stating the grounds on which the belief, that the said person has committed the offence, is founded and the amount of money and estimated value of other property believed to have been procured by means of the offence; and (b) shall also contain any information available as to the location for the time being of any such money and other property, and shall, if necessary, give other particulars considered relevant to the context." (emphasis supplied) In effect Section 13(1) lays down where the State prima facie believes on appreciation of evidence that a person who held high public or political office has committed the offence, whether cognizance has been taken or not for the offence by Special Court, the State Government may authorise public prosecutor for moving application for confiscation of money and other properties which the Government believes the said person procured by means of the offence. Such application is to be accompanied with an affidavit stating the grounds on which such belief is based or founded and the amount of money or estimated value of the properties believed to be procured by means of the offence. So the essential ingredient of the Section is that there must be evidence to the satisfaction of the State Government that the person holding high public or political office have procured money or other properties by means of the offence. 6. Section 14 of the OSC Act provides for notice of confiscation, which reads as follows: "14. Notice for confiscation - (1) Upon receipt of an application made under Section 13, the authorised officer shall serve a notice upon the person in respect of whom the application is made (hereafter referred to as the person affected) calling upon him within such time as may be specified in the notice, which shall not be ordinarily less than thirty days, to indicate the source of his 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. (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." (Emphasis supplied) Section 14 of the OSC Act in essence laid down that upon receipt of an application made under Section 13, the authorized officer shall serve a notice upon the person in respect of whom the application is made, i.e. the person affected, calling upon him within such time as may be specified in the notice to indicate the source of his 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. Here is also the emphasis is on the question why the Court shall not declare that the money, the properties or both have been acquired by means of the offence. Sub-section (2) of Section 14 of the OSC Act provides that 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. Sub-section (3) of the said Section provides that 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. Sub-section (2) lays down that if any other person holds property or money or both on behalf of such effected person than such other person shall also be liable to be noticed. 7. Section 15 of the OSC Act provides for confiscation of property in certain cases. It reads as follows: "15. Sub-section (2) lays down that if any other person holds property or money or both on behalf of such effected person than such other person shall also be liable to be noticed. 7. Section 15 of the OSC Act provides for confiscation of property in certain cases. It reads as follows: "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 in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order, record a finding whether all or any other money or properties in question have been acquired illegally. (2) Where the authorised officer specifies that some of the money or property or both referred to in the show cause notice are acquired by means of the offence, but it is not able to identify specifically such money or property, then it shall be lawful for the authorised officer to specify the money or property or both which, to the best of his judgment, have been acquired by means of the offence and record a finding, accordingly, under Sub-section (1). (3) Where the authorised officer records a finding under this section to the effect that any money or property or both have been acquired by means of the offence, he shall declare that such money or property or both shall subject to the provisions of this Act stand confiscated to the State Government free from all encumbrances. Provided that if the market price of the property confiscated is deposited with the authorised officer, the property shall not be confiscated. (4) Where any, share in a company stands confiscated to the State Government under this Act, then the company shall, notwithstanding any contained in the Companies Act, 1956 or the Articles or Association of the Company, forthwith register the State Government as the transferee of such share. (5) Every proceeding for confiscation of money or property or both under this Chapter shall be disposed of within a period of six months from the date of service of the notice under Sub-section (1) of Section 14. (5) Every proceeding for confiscation of money or property or both under this Chapter shall be disposed of within a period of six months from the date of service of the notice under Sub-section (1) of Section 14. (6) The order of confiscation passed under this section shall, subject to the order passed in appeal, if any, under Section 17, be final and shall not be called in question in any Court of law." Sub-section (1) of Section 15 of the OSC Act provides that the authorised officer may, after considering the explanation, if any, to the show cause notice issued 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 in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order, record and finding whether all or any other money or properties in question have been acquired by means of the offence. Sub-section (2) of Section 15 of the OSC Act provides where the authorised officer specifies that some of the money or property or both referred to in the show cause are acquired by means of the offence, but it is not able to identify specifically such money or property, then it shall be lawful for the authorised officer to specify the money or property or both which, to the best of his judgment, have been acquired by means of the offence and record a finding, accordingly, under Sub-section (1). Sub-section (3) of Section 15 of the OSC Act provides that where the authorised officer records a finding under this section to the effect that any money or property or both have been acquired by means of the offence, he shall declare that such money or property or both shall, subject to the provisions of this Act, stand confiscated to the State Government free from all encumbrances. Provided that if the market price of the property confiscated is deposited with the authorised officer, the property shall not be confiscated. Here is also it is seen that like Sub-section (1) the question is that whether the property or money has been acquired by means of the offence. Provided that if the market price of the property confiscated is deposited with the authorised officer, the property shall not be confiscated. Here is also it is seen that like Sub-section (1) the question is that whether the property or money has been acquired by means of the offence. Sub-section (3) also says that on being satisfied the authorised officer records a finding in these sections that the money or property acquired by means of the offence he shall declare that such money stand confiscated to the State Government. Emphasis is unequivocally clear. It is acquisition of property or money or both by means of the offence as defined in the Act. Sub-sections (4), (5) and (6) are not relevant in this case. 8. Section 16 of the OSC Act provides that transfer of properties pending enquiry shall be null and void. Section 17 of the OSC Act provides for an appeal. Section 18 of the OSC Act provides for the State Government's power to take possession. 9. However, Section 19 of the OSC Act is very relevant. It provides for refund of confiscated money or property. It reads as follows: "19. Refund of confiscated money or property - Where an order of confiscation made under Section 15 is modified or annulled by the High Court in appeal or where the person affected is acquitted by the Special Court, the money or property or both shall be returned to the person affected and in case it is not possible for any reason to return the property, such person shall be paid the price thereof including the money so confiscated with the interest at the rate of five percent per annum thereon calculated from the date of confiscation." So the confiscation made under Section 15 of the OSC Act is : (i) modified or (ii) annulled by the High Court in appeal or (iii) where such person affected is acquitted by the Special Court, then money or property or both shall be returned to the affected person and in case it is not possible for any reason to return the property, such person shall be paid the price thereof including the money so confiscated with the interest at the rate of five percent per annum thereon calculated from the date of confiscation. 10. 10. Thus, a joint reading of all the provisions of the Act, it is clear that the confiscation of property is to be made when it is established by leading evidence before the Authorised Officer that the properties or money or both have been acquired by means of the offence and if the person affected is later on acquitted by the appellate Court then the property or money or both shall be returned to him. Thus, the confiscation proceeding appears to be contingent to result of the criminal case initiated against the person effected under the provisions of Chapter II of the O.S.C. Act. Acquittal of the person effected later on entitles a release of such property in his favour. 11. The Supreme Court in the case of P.P. Abdulla and another v. The Competent Authority and others : AIR 2007 SUPREME COURT 1057 has held that an order of confiscation is a very stringent order and hence a provision of confiscation has to be construed strictly. 12. Having considered the various provisions of the Act, the following scheme as envisaged in the Chapter III of OSC Act emerges: (I) When the State Government, on the basis of prima facie evidence, have reasons to believe that any person, who held high public or political office has committed the offence, whether cognizance has been; taken or not for the offence by Special Court authorise the Public Prosecutor for making an application to the authorised officer for confiscation of the money and other properties, which the State Government believes the said person to have procured by means of the offence. (II) Upon receipt of an application under Section 13 of the O.S.C. Act, the authorised officer is to serve a notice upon the person with respect of whom the application is made, i.e. the affected person, calling upon him to indicate the source of his income, earnings or assets, out of which or by means of which he has acquired such money or property, and to show cause why all such or any 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. (III) Where a notice is served under Sub-section (1) of Section 14 of the O.S.C. Act to any person specifies any money or property or both being held on behalf of such person by any other person, a copy of the notice shall also be served upon such person. (IV) The authorised officer after considering the explanation to the show cause notice issued under Section 14 of the O.S.C. Act and the materials placed before it and after giving to the person affected or such other person a reasonable opportunity of being heard, by order, record a finding whether all or any such money or property has been acquired illegally. (V) Whether the authorised officer specifies upon some of the money or property or both referred to in the show cause notice as acquired by means of the offence, but is not able to identify specifically such money or property, then it shall be lawful for the authorised officer to specify the money or property or both which, to the best of his judgment, have been acquired by means of the offence and record a finding, accordingly, under Sub-section (1). (VI) Where the authorised officer records a finding under Section 15 of the O.S.C. Act to the effect that any money or property or both have been acquired by means of the offence, he shall declare that such money or property or both shall, subject to the provisions of the Act, stand confiscated to the State Government free from all encumbrances. (VII) Provided that if the market price of the property confiscated is deposited with the authorised officer, the property shall not be confiscated. (VIII) Where any confiscation has been made under Section 15 of the O.S.C. Act is modified or annulled by the High Court in appeal or the person affected is acquitted by the Special Court, the money or property or both shall be returned to the person affected and in case it is not possible for any reason to return the property, such person shall be paid the price thereof including the money so confiscated with the interest at the rate of five percent per annum thereon calculated from the date of confiscation. 13. Broadly speaking, from this scheme of the Act, two opinions merges. 13. Broadly speaking, from this scheme of the Act, two opinions merges. Firstly, confiscation to the proceeding shall be done if it is found that the property and the money has been acquired by means of "the offence". Secondly, the confiscation of the property or money or both shall be contingent upon the final outcome of the criminal trial faced by the person affected for the offence under Section 13(1)(e) of the P.C. Act,. Thus, it is clear that the confiscation is being carried out in anticipation of the fact that the prosecution shall in a future date prove the guilt of the accused as far as the offence is concerned. On the contrary, if he is acquitted of the offence then the confiscated property is to be returned to him. So the natural corollary to this provision is that if there is no possibility of recording any conviction as in the case of death of the person, affected and abatement of the criminal trial against him, a confiscation cannot be made as there is no possibility of the person affected being convicted for the offence under the P.C. Act. Therefore, if the person affected or the accused in the criminal trial dies and the case abates against him, then the confiscation proceeding cannot proceed against the other persons in whose name he allegedly held property or money which he amassed by means of the offence. 14. Hence this Court comes to the conclusion that the order dated 21.9.2013 passed by the learned Authorised Officer, Special Court, Bhubaneswar in Confiscation Case No. 4/2009 is not sustainable and the confiscation proceeding has to be dropped. 15. With this observation, the CRLA is allowed and the confiscation proceeding pending before the learned Authorised Officer, Special Court, Bhubaneswar against the appellants be dropped. CRLA allowed.