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2016 DIGILAW 1062 (ORI)

Prasanta Ku. Das v. State of Odisha

2016-11-08

J.P.DAS

body2016
JUDGMENT J.P. DAS, J. - This appeal under Section 13 of the Odisha Protection of Interests of Depositors (In Financial Establishments) Act, 2011, (hereinafter referred to as O.P. I.D. Act) is directed against the order dated 10.02.2016 passed by the learned Presiding Officer of the Designated Court under the O.P.I.D. Act Cuttack rejecting the prayer of the petitioner to drop the proceeding and to release the properties from attachment since the enquiry could not be completed within the prescribed period of one hundred eighty days as provided in Section 9(6) of the O.P.I.D. Act. 2. The backdrop of the case in brief is that the prosecution was lodged against one M/s Seashore Group of Companies with the allegation that the company was collecting deposits from the public unauthorizedly promising high returns, but the money so collected was misappropriated for the own benefit of the Directors and other office bearers of the company without repaying to the depositors and investors. The matter was first investigated into by the CID CB (Economic Offence Wing), Bhubaneswar and subsequently, it was taken over by the Central Bureau of Investigation (in short ‘C.B.I.’) as per direction of the Hon’ble Apex Court. in course of investigation, properties and other assets of the said company were seized along with other properties and accounts having relation with the said company in order to secure that the general public, who had invested their money in the company, would get back their amounts. On promulgation of the O.P.I.D. Act, the Competent Authority was notified and the Designated Court under the said Act was established. The Competent Authority on receipt of the orders of the Government made an application to the Designated Court on 28.12.2013 for making an ad interim order of attachment absolute along with direction to sell the properties so attached by public auction as per Section 4(3) of the O.P.I.D. Act. 3. The present appellant was the Managing Director of the Seashore Group of Companies. The Designated Court issued show-cause notice to all concerned including the appellant and the appellant appearing before the said Court on 09.10.2014 submitted his show-cause. Since the enquiry was not completed within one hundred eighty days from the receipt of application from the Competent Authority, the present appellant filed an application before the Designated Court on 06.01.2016 with a prayer to release the attached properties and to drop the proceeding. Since the enquiry was not completed within one hundred eighty days from the receipt of application from the Competent Authority, the present appellant filed an application before the Designated Court on 06.01.2016 with a prayer to release the attached properties and to drop the proceeding. The learned Designated Court by its order dated 10.02.2016 rejected the prayer of the appellant holding it as not maintainable mainly on the grounds that mere expiry of one hundred eighty days does not vitiate the proceeding automatically and further the applicant himself had consumed several adjournments thereby delaying the proceeding. 4. It has been submitted in the appeal that the impugned order has been passed without proper application of judicial mind which has put the appellant to unnecessary harassment. It is submitted that the prescribed period for disposal of the proceeding having been mandated as one hundred eighty days from the date of receipt of application from the competent authority, the present enquiry before the learned Designed Court, having not been completed even after lapse of a period of three years, was definitely against the provision of law and hence it should be dropped and the properties attached in course of investigation, should be released from such attachment. It was submitted that since the period has been specifically prescribed, the continuation of the proceeding thereafter is obviously illegal and not permissible under law. 5. Per contra, it was submitted by the learned counsel for the State that Section 9 (6) of the O.P.I.D. Act does not mandate for completion of the proceeding within one hundred eighty days and the said period of one hundred eighty days is prescribed for pronouncing the final order after completion of enquiry into different claims and objections raised on behalf of the parties having interest in the properties so attached and hence, since the said enquiry has not been completed, the period of one hundred eighty days is yet to start. It was further contended by the learned counsel for the State that the present appeal is not maintainable in its given forum since the provision of appeal as provided under Section 13 of O.P.I.D. Act relates to any order passed under Section 6 of the O.P.I.D. Act imposing punishment and the present allegation being related to attachment and sale of the properties, the appeal is not maintainable and the appellant if so advised, could have come before this Court in separate forum. It was further contended on behalf of the State that the appellant himself has consumed a lot of time and adjournments in course of the proceeding before the learned Designated Court and he cannot be permitted to take benefit of his own laches by alleging that the proceeding could not be disposed of during the specified period. 6. At the outset, as regards the submissions made on behalf of the State regarding the maintenance of appeal, the contention as raised on behalf of the State is not correct since Section 13 of the O.P.I.D. Act provides- “Any person including the Competent Authority, if aggrieved by an order of the Designated Court, may prefer an appeal to the High Court within thirty days from the date of the order” In view of such clear wordings that the forum of appeal is also available to the competent authority in case of any order passed affecting its interest, the contention that the provision is limited to any order passed only under Section 6 of the O.P.I.D. Act is not correct. That apart there is no other provision in the O.P.I.D. Act for the affected party to assail the order by which it has been aggrieved. 7. That apart there is no other provision in the O.P.I.D. Act for the affected party to assail the order by which it has been aggrieved. 7. Now coming to the other contention raised on behalf of the State that the period of one hundred eighty days for passing the final order is to be calculated after completion of enquiry is also not acceptable in view of the specific words mentioned under Section 9 (6) of the O.P.I.D. Act which is quoted below: “9(6): After investigation under Sub-Section (5), the Designated Court shall pass an order, within a period of one hundred and eighty days from the date of receipt of an application under sub-Section (3) of Section 4, either making the ad-interim order of attachment absolute or varying it by releasing a portion of the property from attachment or cancelling the ad-interim order of attachment and then direct the Competent Authority to sell the property so attached by public auction and realize the sale proceeds: Provided that the Designated Court shall not release from attachment any interest, which it is satisfied that the Financial Establishment or the person referred to in sub-Section (1) has in the property, unless it is also satisfied that there will remain under attachment an amount or property of a value not less than the value that is required for repayment to the depositors of such Financial Establishment.” The aforesaid provision specifies that the Designated Court shall pass an order within a period of one hundred eighty days from the date of receipt of an application under Sub-Section 3 of Section -4 from the competent authority. Thus it is absolutely clear that the period of one hundred eighty days for passing the order is to be calculated from the date of receipt of the application submitted by the competent authority. 8. Thus, remains the question to be decided as to whether such provision for disposal of the proceeding within one hundred eighty days is directory or mandatory in nature so that in case of its non-compliance, the proceeding should be dropped releasing the properties from attachment. 8. Thus, remains the question to be decided as to whether such provision for disposal of the proceeding within one hundred eighty days is directory or mandatory in nature so that in case of its non-compliance, the proceeding should be dropped releasing the properties from attachment. In this respect, it was contended by the learned counsel for the appellant that the wordings of Section 9(6) of the O.P.I.D. Act are unambiguous and clear that the proceeding should be disposed of within one hundred eighty days, and hence, there can be no deviation taking recourse to any plea to justify the delay. The learned counsel for the appellant relied upon certain observations of the Hon’ble Apex Court that if the precise words used are plain and unambiguous, those are bound to be construed in their ordinary sense and the argument of inconvenience or hardship is a dangerous one and is only admissible in construction where the meaning of the statue, is obscure or there are alternative method of construction. It was submitted that there can be no scope for presumption in respect of meaning of a statute and it should be literally interpreted as per its given words. The learned counsel for the appellant mostly relied upon decisions of the Hon’ble Apex Court in the case of M/s Delhi Airtech Services Pvt. Ltd. And another vrs State of U.P. & another in Civil Appeal No. 24 of 2009 reported in (2011) 9 SCC 354 wherein it has been observed that: “Statutes which encroach upon rights, whether as regards person or property, are subject to strict construction in the same way as penal Acts.” It was also observed in the said decision that: “It is well settled cannon of neither statutory interpretation that the Courts would add nor substract from the plain language of the statutory provision.” 9. Certain other case laws were also filed before the Court in respect of the said contention that when the language of the statute is plain and unambiguous, there cannot be a scope for its interpretation in a different manner. The position of law as advanced, is not in dispute. But the peculiarity of the present case for consideration is not in dispute. The position of law as advanced, is not in dispute. But the peculiarity of the present case for consideration is not in dispute. But the peculiarity of the present case for consideration is whether the period of one hundred eighty days prescribed for passing the final order under Section 9(6) of the O.P.I.D. Act is directory or mandatory in nature so as to make the continuation of the proceeding illegal if not completed within the said period. 10. It is not in dispute that the proceeding has not been completed within one hundred eighty days. But, at the same time no penal provision has been provided in the Act as to the contingency if the enquiry is not completed within the prescribed period. The learned counsel for the appellant relied on a decision of the Hon’ble Apex Court in the case of Sharif-ud-din Vs. Abdul Gani Lone, reported in AIR 1980 SC 303 wherein it has been observed that: “Whenever a statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow.” 11. As stated earlier there is no provision prescribed in the O.P.I.D. Act that any consequence would follow, if the enquiry is not completed within one hundred eighty days. It was also observed in the case of M/s Delhi Airtech Services Pvt. Ltd. vrs. State of U.P. & another, reported in (2011) 9 SCC 354 , which has been relied upon on behalf of the appellant that: “The doctrine of strict construction does not per se mandate that its application excludes the simultaneous application of all other principles of interpretation. It is permissible in law to apply the rule of strict construction while leading to the provision of law contextually or even purposively. The golden rule of interpretation is the rule of plain language, while preferring the interpretation which furthers the cause of the Statute rather than that which defeats the objects or purpose of the Act” 12. The learned counsel for the appellant also relied upon the decision of the Hon’ble Apex Court in the case of Yogendra Kumar Jaiswal and others Vrs. The learned counsel for the appellant also relied upon the decision of the Hon’ble Apex Court in the case of Yogendra Kumar Jaiswal and others Vrs. State of Bihar and others in Civil Appeal No. 6448-6452, 6460 of 2011 along with analogous matters reported in (2016) 3 SCC 183 submitting that in a similar circumstances, the Hon’ble Court has observed that such a direction of disposal of a proceeding is not directory. But, it has been observed in the said decision that: “At this stage, we may note with profit that the High Court of Patna has dealt with Section 17(3) of the Bihar Act which provides that an appeal shall be disposed of preferably within a period of six months from the date it is preferred, and stay order, if any, passed in an appeal shall not remain in force beyond the prescribed period of disposal of appeal. It has been held therein that it would not be proper to construe that the prescribed period of disposal of appeal is only six months but it is only desirable that the appeal should be disposed of within six months and the stipulation that the order of stay is not to remain in force beyond the period of disposal of appeal would not mean that the order of stay will lose its force during the pendency of the appeal.” Discussing the aforesaid observations of the Hon’ble High Court of Patna, the Hon’ble Supreme Court further observed that: “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 Chandra Patel Vrs. State of Orissa 1993 (76) CLT 720 is correct and therefore, we are disposed to hold that the order of stay if passed in an appeal would not debar or prohibit the High Court to pass a fresh stay order beyond that period, if a case is made out to the satisfaction of the Court.” 13. The purpose of quoting the aforesaid guiding principles as laid down by the Hon’ble Apex Court is as mentioned earlier that there is no penal provision provided in O.P.I.D. Act prescribing any consequence, if the proceeding before the Designated Court is not completed within one hundred eighty days. The purpose of quoting the aforesaid guiding principles as laid down by the Hon’ble Apex Court is as mentioned earlier that there is no penal provision provided in O.P.I.D. Act prescribing any consequence, if the proceeding before the Designated Court is not completed within one hundred eighty days. The purpose of the proceeding is to verify the claims of different persons in the properties attached in course of investigation and to pass a final order either making the attachment absolute or releasing a portion of the properties so attached or cancelling the order of attachment and thereafter direct the competent authority to sell the properties so attached. It has also been provided in Section 9(6) of the O.P.I.D. Act that the Designated Court shall not release from attachment any interest of owners of such property unless it is also satisfied that there will remain under attachment an amount or property of a value not less than the value that is required for repayment to the depositors of such financial establishment. As observed by the Hon’ble Apex Court, it can be mentioned in the similar line that if the proceeding is not completed within prescribed period of one hundred eighty days and is treated to be closed for the sake of argument, obviously there would be no final order in the proceeding. But, that can never be construed that the properties so attached shall automatically be released from attachment and at the same time there is no bar for the competent authority to make a fresh prayer before the Designated Court on similar line. Learned counsel for the State also relied upon a decision in the case of The Remington Rand of India Ltd. Vrs. The Workmen, reported in AIR 1968 SC 224 , wherein it is held that: “For ascertaining the real intention of the Legislature the Court may consider, inter alia, the nature and the design of the statue, and the consequences which would follow from construing it one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statue provides for a contingency of the non-compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered.” 14. In the aforesaid premises, I am unable to accept the contention on behalf of the appellant that the period of one hundred eighty days prescribed for disposal of proceeding is mandatory and in the event of the failure of compliance thereof, the proceeding will be dropped and the properties so attached, shall be released automatically. It would also be profitable to mention in this regard that the purpose of legislation of the O.P.I.D. Act is to secure the interest of general public who have invested their hard-earned money in a company with the belief and faith of getting high returns, but have been ultimately duped by the said company which is prosecuted for its alleged offences before a separate forum. It is worthwhile to mention that since different companies cropped up in the State of Odisha inviting funds from different depositors giving false promise of high rate of returns, even though they were not authorized for such business, and ultimately the investors found themselves to have been cheated, the matters were reported to the Police and cases were registered at different police stations. The present Seashore Group of Companies of which the appellant was Managing Director was one of such companies. While the investigation was going on and charge sheets were submitted in some cases in P.I.L. filed before the Hon’ble Apex Court vide W.P. (C) No. 413 of 2013, the Hon’ble Apex Court realizing the importance of the cases and the gravity of the offences allegedly committed, directed the C.B.I. to take up the investigation in respect of forty four companies including the present company, even in cases where the charge sheet had already been submitted. It was specifically observed by the Hon’ble Apex Court that “the Economic Offences” having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing a serious threat to the financial health of the country. In the instant case, particularly, the interest of thousands of investors is involved and the allegation of deposit of the investors amounts to more than thousands of crores of rupees. In the instant case, particularly, the interest of thousands of investors is involved and the allegation of deposit of the investors amounts to more than thousands of crores of rupees. In such circumstances, to drop the proceeding and release the properties of the company closing eyes to the hopes and aspirations of thousands of Bonafide investors and depositors merely resorting to literary interpretation of the statutory provision, in my humble opinion, would definitely be uncalled for and failure of justice. 15. It was contended by the learned counsel for the appellant that the learned Designated Court has mentioned in the impugned order that the present appellant consumed several adjournments and hence the delay in disposal as alleged by him, does not lie in his mouth. It was submitted that the appellant had filed his show-cause promptly, but he had taken some adjournments for filing reply to certain intervenor applications. Be that as it may, there has been delay in deciding interlocutory applications filed by different intervenors apart from some adjournments also consumed by other opposite parties. But, at the same time, those could not have been avoided since the purpose of the O.P.I.D. Act is to finally decide after due enquiry as to the interests of third persons in the attached properties of the concerned company. 16. Another contention was raised in course of hearing of the appeal on behalf of the appellant that the O.P.I.D. Act came into force in the year 2013 and the criminal proceeding against the appellant and seizure and attachment of the properties of the concerned company being much prior to that, the provisions of the O.P.I.D. Act could not have been made applicable against the present appellant. In this respect, it was submitted that the provision of O.P.I.D. Act being penal in nature could not have any retrospective effect so as to include the case of the petitioner to be taken cognizance of under its provision. In this respect, it may be mentioned that such contention was raised before this Court for the first time only in course of hearing of the appeal apart from the fact that it was also not taken as a ground in the appeal memo filed on behalf of the appellant. In such circumstances, I am not inclined to pass any order in that respect. 17. In such circumstances, I am not inclined to pass any order in that respect. 17. In view of my aforesaid discussions and findings, I find no merit in the present appeal. Accordingly, it stands dismissed. 18. However, learned Designated Court would do well to dispose of the proceeding as expeditiously as possible and the parties are also directed to co-operate for early disposal of the same. Appeal dismissed.