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2020 DIGILAW 571 (AP)

Gadi Reddy Nithyanand v. State Of Andhra Pradesh

2020-09-07

U.DURGA PRASAD RAO

body2020
JUDGMENT U. Durga Prasad Rao, J. - The petitioners seek a writ of mandamus declaring the notices issued by 4th respondent demanding the petitioners/tenants of the petitioners directing them to deposit damages/rents in respect of the notices mentioned flats even though there is no order of attachment in respect of their flats, as arbitrary, illegal, unconstitutional and to pass suitable orders deemed fit in the circumstances of the case. 2. The petitioners' case briefly is thus. (a) Except the petitioners 2, 3, 12, 14, 19 & 20 the rest of the petitioners purchased different flats from M/s. Welldo Homes India Private Limited for valuable consideration under different Sale Deeds. The petitioners 2, 3, 12, 14, 19 & 20 have purchased the flats from their vendors who in turn purchased from M/s. Welldo Homes India Private Limited. The details of the petitioners, their flats and documents are mentioned below for easy comprehension: S. No. Petitioner No. Flat No. Document No. Document Date 1 1 102 4358 09.05.2014 2 2 103 1045 30.01.2015 3 3 104 1044 30.01.2015 4 4 201 2903 26.03.2014 5 5 202 8993 12.08.2014 6 6 203 3476 10.04.2014 7 7 204 5277 03.06.2014 8 8 301 8804 07.08.2014 9 9 302 8206 30.07.2014 10 10 303 13255 17.11.2014 11 11 304 722 22.01.2015 12 12 401 13252 17.11.2014 13 13 402 10656 18.09.2014 14 14 403 15120 29.12.2014 15 15 404 14225 09.12.2014 16 16 101 1043 30.01.2015 17 17 G1 1006 29.01.2015 18 18 G2 1007 29.01.2015 19 19 G3 261 06.01.2015 20 20 G4 262 06.01.2015 S. No. Petitioner No. Flat No. Document No. Document Date Vendor name 1 3 104 10293 26.10.2015 P Nageswara Rao 2 20 G4 9669 29.08.2018 M Veera Mohana Rao 3 2 103 2736 16.03.2015 A Guunadham 4 14 403 4143 20.04.2015 V Venkata Surya Narayana 5 19 G3 5093 29.04.2019 I Greeshma 6 12 401 5239 02.05.2019 S Bhaskar S Bhaskar (b) All the petitioners have been enjoying their respective flats by paying house tax and electricity consumption charges to the concerned authorities. Some of the petitioners let out their premises to the tenants. (c) While so, the 4th respondent issued notices to the petitioners on different dates demanding them to deposit different amounts towards damages/rents in respect of their flats as shown in the following table. Some of the petitioners let out their premises to the tenants. (c) While so, the 4th respondent issued notices to the petitioners on different dates demanding them to deposit different amounts towards damages/rents in respect of their flats as shown in the following table. S. No. Petitioner No. Flat No. Date of Notice Demand amount 1 1 102 18.06.2020 NIL 2 2 103 NIL NIL 3 3 104 22.06.2020 Rs. 7,000 4 4 201 18.06.2020 NIL 5 5 202 18.06.2020 NIL 6 6 203 18.06.2020 NIL 7 7 204 18.06.2020 NIL 8 8 301 22.06.2020 Rs.7,000/- 9 9 302 18.06.2020 NIL 10 10 303 18.06.2020 NIL 11 11 304 18.06.2020 NIL 12 12 401 22.06.2020 Rs.7,000/- 13 13 402 18.06.2020 NIL 14 14 403 19.06.2020 NIL 15 15 404 22.06.2020 Rs.7,000/- 16 16 101 18.06.2020 Rs.10,000/- 17 17 G1 22.06.2020 Rs.6,000/- 18 18 G2 19.06.2020 NIL 19 19 G3 18.06.2020 NIL 20 20 G4 18.06.2020 NIL (d) The above notices were issued on the main ground that the respective flats of the petitioners were under ad interim attachment of the Government of A.P./ under absolute attachment of the Special Court-cum-District Court, Eluru, West Godavari District. No details were furnished regarding the attachment and Court proceedings. In some of the notices it was mentioned that concerned properties were involved in Cr.No.3/2015 of Pedapadu Police Station and hence, they were attached by the Government under G.O.Ms.No.23, Home (ARMS & SPF) Department, dated 20.02.2015. On enquiry by the petitioners they came to know that number of criminal cases were registered against M/s. Agrigold Farms & Estates India Private Limited and those crimes were transferred to C.I.D. represented by 3rd respondent. (e) On further enquiry, the petitioners came to know that their respective properties have nothing to do with Cr.No.3/2015 and they were not subject matter of attachment under G.O.Ms.No.23 dated 20.02.2015. The aforesaid crime was registered against M/s. Agrigold Farms & Estates India Private Limited, but the subject properties were purchased from M/s. Welldo Homes India Private Limited. Even assuming that the flats were related to M/s. Agrigold Farms & Estates India Private Limited, still G.O.Ms.No.23 excepted the flats which were registered in the respective Sub-Registrar Offices prior to the registration of crime i.e., 01.03.2015. Even assuming that the flats were related to M/s. Agrigold Farms & Estates India Private Limited, still G.O.Ms.No.23 excepted the flats which were registered in the respective Sub-Registrar Offices prior to the registration of crime i.e., 01.03.2015. All the flats of the petitioners were registered prior to 01.03.2015 and hence, even assuming that the flats were related to M/s. Agrigold Farms & Estates India Private Limited they are out of the purview of G.O.Ms.No.23 and consequently they are not attached. Therefore, the 3rd respondent has no authority under law to demand the petitioners and their tenants to deposit the damages/rents in respect of the subject properties. Hence, the writ petition. 3. Learned Government Pleader for Home took notice on behalf of the respondent Nos.1 to 4. No counter is filed. 4. Heard the arguments of learned Senior Counsel Sri Ghanta Rama Rao representing Sri Challa Ajay Kumar, learned counsel for petitioners, and learned Government Pleader for Home representing the respondent Nos.1 to 4. 5. The main plank of argument of the learned Senior counsel for petitioners is that the petitioners purchased the subject flats under different registered Sale Deeds for valuable consideration from M/s. Welldo Homes India Private Limited and few petitioners have purchased the flats from the persons who purchased from the aforesaid M/s. Welldo Homes India Private Limited and all of them are enjoying their respective flats by either occupying personally or letting out to tenants. Learned Senior counsel vehemently argued that the subject flats have nothing to do with Cr.No.3/2015 of Pedapadu Police Station. The G.O.Ms.No.23 dated 20.02.2015 which is relied upon by the 4th respondent to deposit the damages/rents, itself clearly spelt out that the plots that were registered in the respective Sub-Registrar Office before the crime was registered at Pedapadu Police Station i.e. 01.03.2015 were excepted from the attachment. In that view of the matter, the subject flats which were registered much prior to the date of registration of the crime on 01.03.2015, are out of the clout of the attachment. Therefore, the 4th respondent has absolutely no right or authority to issue the impugned notices. In that view of the matter, the subject flats which were registered much prior to the date of registration of the crime on 01.03.2015, are out of the clout of the attachment. Therefore, the 4th respondent has absolutely no right or authority to issue the impugned notices. (a) He alternatively argued that even assuming that the subject flats are also liable for attachment, still in view of the scheme of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 (for short, "APPDFE Act, 1999" ) and its provisions, the 4th respondent has no right to seek for deposit of rents from the tenant. He would submit that in similar circumstances, this Court in W.P.Nos.11795/2020 & batch has held that the Criminal Investigation Department was incompetent to issue notice demanding the tenants to deposit the rents to the account of the CID. He thus, prayed to allow the writ petition and set aside the impugned notice. 6. Learned Government Pleader for Home while supporting the impugned notices, however fairly admitted about the order passed by this Court in W.P.Nos.11795/2020 & batch. 7. The point for consideration is whether the impugned notices issued by the 4th respondent are factually and legally sustainable? 8. Point: Section 3 of the APPDFE Act, 1999 confers power on the Government to issue an ad-interim order of attachment of money or other property alleged to have been procured either in the name of the financial establishment or in the name of any other person from and out of the deposits collected by financial establishment. Such an order could be passed where complaints have been received from a depositor or depositors that any financial establishment defaulted or is likely to default in the matter of return of deposits on maturity or where the Government have reason to believe that any financial establishment is acting in a manner prejudicial to the interests of the depositors with an intention to defraud the depositors. The Government upon issuing the ad-interim order of attachment, may transfer the control of such attached money or property to the Competent Authority. It is to be noted that Section 4 confers the power on the Government to appoint by notification an authority called the 'Competent Authority' to exercise control over the properties attached by the Government under Section 3. The Government upon issuing the ad-interim order of attachment, may transfer the control of such attached money or property to the Competent Authority. It is to be noted that Section 4 confers the power on the Government to appoint by notification an authority called the 'Competent Authority' to exercise control over the properties attached by the Government under Section 3. As per Section 4(3) of APPDFE Act, 1999, the Competent Authority within 15 days upon receiving the orders of the Government under Section 3, shall apply to the Special Court constituted under this Act for making ad-interim order of attachment absolute. Then Section 7 lays down that upon receiving the application under Section 4, the Special Court shall issue notice to the financial establishment or to any other person whose property is attached by the Government, calling upon to show cause as to why the order of attachment should not be made absolute. Such persons and any other persons claiming an interest in the property attached but did not receive notice, may appear and put forth their objections. The Special Court shall, subject to the provisions of the APPDFE Act, 1999, follow the procedure and exercise all the powers of a Court hearing a suit under the Code of Civil Procedure, 1908, conduct investigation and pass an order making ad-interim order of attachment either absolute or vary or cancel. The above are the provisions of the APPDFE Act, 1999 relating to the ad-interim order of attachment made by the Government and the enquiry required to be conducted by the Special Court for making the said order either absolute or vary or cancel. (a) Be that it may, it is also pertinent to note that under Section 6(4), the Special Court shall, on the application of the Competent Authority pass an order or issue direction as may be necessary for the equitable distribution among the depositors of the money realized from out of the property attached. The aforesaid order, it can be understood, will be passed by the Special Court after disposal of the main case. 9. While so, the impugned notices show that they were issued by the 4th respondent directing the petitioners/tenants to deposit the damages/rents into the bank account of the Competent Authority on the ground that the subject property was attached by the Government as per G.O.Ms.No.23, Home (ARMS & SPF) Department, dated 20.02.2015. 9. While so, the impugned notices show that they were issued by the 4th respondent directing the petitioners/tenants to deposit the damages/rents into the bank account of the Competent Authority on the ground that the subject property was attached by the Government as per G.O.Ms.No.23, Home (ARMS & SPF) Department, dated 20.02.2015. There can be no demur that in view of Section 3 of the Act mentioned supra, the Government have power to issue ad-interim order of attachment of a property in the interests of the depositors upon fulfilment of the conditions mentioned in the said section. The petitioners are not questioning the statutory power of the Government. However, their concern is that even the said G.O.Ms.No.23 itself has exempted from attachment of those properties which were registered prior to the registration of the crime on 01.03.2015 by the Police of Pedapadu Police Station and the subject properties being registered on the dates prior to 01.03.2015, the same will not fall within the purview of the said G.O. I find force in the said contention. In the Annexrue-I of the G.O.Ms.No.23, it was mentioned thus. "Except the plots that were registered in the respective Sub-Registrar Offices before the Criminal cases were registered i.e. 01.03.2015 at Pedapadu, West Godavari District, the rest of the land shall cover under the above G.O". The aforementioned stipulation shows that the plots which were belonging to Agrigold company and which were sold under registered documents prior to 01.03.2015 were excepted from the purview of the G.O.Ms.No.23. It goes without saying that any constructions made on those plots and sold prior to 01.03.2015 will also be exempted from G.O.Ms.No.23. The copies of the Sale Deeds executed in favour of the petitioners/their vendors by M/s. Welldo Homes India Private Limited show that they were registered prior to 01.03.2015. Therefore, in view of the above stipulation in the G.O.Ms.No.23, the subject properties can be said to have been exempted from attachment even assuming that they were acquired with the funds collected from the depositors. Therefore, in view of the above stipulation in the G.O.Ms.No.23, the subject properties can be said to have been exempted from attachment even assuming that they were acquired with the funds collected from the depositors. Further, it should be noted that it is the fundamental contention of the petitioners that they purchased the flats from M/s. Welldo Homes India Private Limited and not from M/s. Agrigold Farms & Estates India Private Limited and both the concerns have nothing to do with each other and consequently the subject properties cannot be linked up with Cr.No.3/2015 which was registered against M/s. Agrigold Farms & Esates India Private Limited. This contention needs to be considered and decided by the Special Court during the enquiry concerning to interim attachment for making it either absolute or cancelling the same. However, this Court cannot delve into that aspect in the writ petition. However, since the respondents have not produced any material showing the nexus between the subject properties and M/s. Agrigold Farms & Estates India Private Limited, prima facie the contention of the petitioners can be accepted for the time being, however, subject to the decision of the Special Court regarding the origin of the subject properties. In that view, the impugned notices are not sustainable under law. (a) For another reason also, the impugned notices are not maintainable. In W.P.No.11795/2020 & batch, a learned Single Judge of this Court happened to deal with the following question: "Whether the officials of Criminal Investigation Department (C.I.D) are vested with any power to issue notices shown in Column No.VI, calling upon the tenants in occupation of various property shown in Column No.IV to pay rent to the credit of Criminal Investigation Department Account by exercising power under Section 10 of the Act. If not, whether the notices impugned in the writ petitions shown in Column No.VI are liable to be set-aside?" Learned Judge having observed that the petitioners therein challenged the attachment before the Special Court and prayed to set aside the attachment and their petitions were pending ultimately held thus. "As discussed above, the control of the property was not given to Criminal Investigation Department (C.I.D) and it is still continuing under the control of the petitioners and they are collecting rents till date of issue of notices. "As discussed above, the control of the property was not given to Criminal Investigation Department (C.I.D) and it is still continuing under the control of the petitioners and they are collecting rents till date of issue of notices. When the petitioners are continuing to have control over the property, they are entitled to collect rents from the tenants in occupation and the Criminal Investigation Department (C.I.D) is incompetent to issue the impugned notices referred in Column No.VI, demanding the tenants to deposit the rent to the account of C.I.D, so also owners of flats (petitioner in W.P.No.11515 of 2020), though no such power is vested with the competent authority/Criminal Investigation Department (C.I.D) to collect rents. Even Section 10 of the Act also did not authorize the competent authority/Criminal Investigation Department (C.I.D) to issue such notices, administration of property attached is only for limited purpose specified in Clauses (a) & (b) of Section 10 of the Act. Hence, I find that the impugned notices mentioned in Column No.VI of the table referred above, demanding the unofficial respondents/tenants in occupation to deposit rents to the credit of Criminal Investigation Department (C.I.D) is illegal and without any authority under the Act or Rules framed thereunder. Hence, issuing such notices is contrary to the provisions of the Act and it is violative of Articles 14 and 300-A of the Constitution of India, consequently the notices mentioned in Column No.VI of the table referred above are liable to be set-aside." 10. The batch of Writ Petitions were ultimately allowed setting aside the impugned notices. It should be noted that as a matter of caution learned Judge observed that the observations recorded in those Writ Petitions are not binding in any other proceedings and the Competent Authority can take appropriate steps and appropriate action in accordance with law. 11. Coming to the case on hand, in the instant case also though attachment is said to be made, no record is produced by either party to show that the said attachment was made absolute by the Special Court in terms of Section 7 of the APPDFE Act, 1999. Further, the petitioners are challenging the attachment itself on the ground that the G.O.Ms.No.23 has specifically exempted those properties which were registered prior to 01.03.2015 and the subject properties are such properties. Further, the petitioners are challenging the attachment itself on the ground that the G.O.Ms.No.23 has specifically exempted those properties which were registered prior to 01.03.2015 and the subject properties are such properties. Therefore, as the matter stands, in terms of the above judgment also the impugned notices are unsustainable under law. 12. In the result, the Writ Petition is allowed and the impugned notices dated 18.06.2020, NIL, 22.06.2020, 18.06.2020, 18.06.2020, 18.06.2020, 18.06.2020, 22.06.2020, 18.06.2020, 18.06.2020, 18.06.2020, 22.06.2020, 18.06.2020, 19.06.2020, 22.06.2020, 18.06.2020, 22.06.2020, 19.06.2020, 18.06.2020 & 18.06.2020 issued by the 4th respondent directing the petitioners/tenants to deposit the damages/rents relating to the writ petition mentioned flats are hereby set aside. No costs. As a sequel, interlocutory applications, if any pending, shall stand closed.