IN THE HIGH COURT OF ANDHRA PRADESH : AMARAVATI
HON'BLE MR. JUSTICE PRASHANT KUMAR MISHRA, CHIEF JUSTICE
AND
HON'BLE MR. JUSTICE M. SATYANARAYANA MURTHY
W.A.No.749 of 2021
(Proceedings through virtual mode)
M/s. HRT Builders,
A Partnership Firm,
Rep. by its Managing Partner,
Mr.Thondepu Ratna Srinivas,
S/o. T.Venkata Hanumantha Rao,
Aged about 56 years,
R/o D.No.27-33-6, Alibaig street,
Governorpet, Vijayawada,
Krishna District, A.P.
.. Appellant/Petitioner
Versus
The State of Andhra Pradesh
Rep. by it's Principal Secretary,
Home Department, Secretariat,
Velagapudi, Amaravathi and another.
.. Respondents
Counsel for the Appellant : Challa Gunaranjan
Counsel for respondents : Special Government Pleader.
ORAL JUDGMENT Dt.01.02.2022 (Per M.Satyanarayana Murthy, J)
This appeal under Clause 15 of Letters Patent is filed
challenging the order dated 28.04.2020 passed in W.P.No.11176 of
2019 by the learned single Judge, whereby the petition filed by the
petitioner for issue of Writ of Mandamus declaring Ad-interim orders
issued by respondent No.1 vide G.O.Ms.No.21 Home (General.A)
Department dated 28.01.2019 to the extent of attaching the
properties belonging to the petitioner at Sl.No.4 and 5 of Annexure to
the impugned G.O. as illegal, arbitrary, unjust, without jurisdiction, CJ and MSM,J WA_749_2021 2
contrary to provisions of the Andhra Pradesh Protection of
Depositories of Financial Establishments Act, 1999 and violative of
principles of Natural Justice, besides being violative of Article 21 and
300A of Constitution of India and set aside the same, was dismissed
holding that the petitioner is entitled to avail effective, efficacious
alternative remedy available before the Special Court, which is
competent to take evidence and deal with the objections.
The parties to the appeal will hereinafter be referred as arrayed
before the learned single Judge for the sake of convenience and to
avoid confusion.
The claim of the petitioner is that item Nos.4 and 5 of
G.O.Ms.No.21 dated 28.01.2019 was purchased by the petitioner
under registered sale deeds bearing Nos.459 of 2014 and 460 of 2014
dated 20.01.2014 from the vendor company - Agri Gold. Since then
the petitioner claims to be in possession and enjoyment of the
property. The petitioner after securing necessary statutory approvals
has commenced the construction of residential apartment complexes
called ―HRT Sanjana‖ and ―HRT Manasvi‖. One flat in HRT Manasvi,
in the second floor, was sold to third party on 23.07.2018. Later,
when the petitioner attempted to sell another property viz., a flat in
first floor of the HRT Manasvi, the Sub-Registrar did not permit the
registration. On enquiry, the petitioner came to know that the
property could not be registered as the State already issued
G.O.Ms.No.21 dated 28.01.2019, attaching the immovable property
under Section 3 of ―the Andhra Pradesh Protection of Depositories
of Financial Establishments Act, 1999‖ (for short ―Act 17 of 1999‖)
attaching the immovable property of the vendor's company, which
sold the property to the petitioner under two registered sale deeds CJ and MSM,J WA_749_2021 3
mentioned above. The said company is accused of many crimes
throughout the States of Andhra Pradesh and Telangana more
particularly, defrauding hundreds of small depositors. Since the
petitioner purchased property on 20.01.2014 i.e. much prior to
registration of FIR against the vendor of the petitioner, the property is
not liable for attachment and as the property is already alienated,
Section 3 of the Act No.17 of 1999 has no application and to invoke
Section 8 of the Act No.17 of 1999, the respondents have to follow
certain procedure, but without following procedure under Section 8 of
the Act No.17 of 1999, ad interim attachment was effected against the
property of the petitioner, which are item Nos.4 and 5 of
G.O.Ms.No.21 dated 28.01.2019 and to declare the same as void,
illegal, arbitrary and Article 21 and 300-A of the Constitution of India.
The respondents did not file counter.
Upon hearing argument of learned counsel for the petitioner
and learned Advocate General representing State, learned single
Judge passed the order under challenge.
Sri Challa Gunaranjan, learned counsel for the petitioner,
mainly concentrated on two issues. First issue is that, since the
property was already sold prior to registration of crime against the
vendor of the petitioner, Section 3 of the Act No.17 of 1999 cannot be
invoked, at the same time even to attach the property of the third
parties believed to be the property of Agri Gold, the accused, certain
procedure is prescribed which is required to be followed while passing
order of attachment. But, no such procedure was followed. Therefore,
interim attachment under Section 3 of the Act No.17 of 1999
attaching the property of the petitioner would not attract either
Section 3 or 8 of the Act No.17 of 1999, but the learned single Judge CJ and MSM,J WA_749_2021 4
did not consider the distinction between Section 3 and 8 for interim
attachment of property exercising power under Section 3 by the Crime
Investigation Department and dismissed the petition erroneously on
the ground that efficacious, alternative remedy is available under
Section 7 of the Act No.17 of 1999, consequently requested to set
aside the impugned order and declare G.O.Ms.No.21 dated
28.01.2019 to the extent of property of the petitioner as illegal,
arbitrary and violative of Article 21 and 300-A of the Constitution of
India.
Learned Special Government Pleader appearing on behalf of
learned Additional Advocate General supported the order, more
particularly on the ground that when the effective, efficacious and
alternative remedy is available before the competent Special Court,
which can conduct necessary enquiry including recording of evidence,
more particularly about the disputed question of fact, this Court
would not, normally, entertain writ petition to exercise extraordinary
discretionary power of judicial review, requested to dismiss the appeal
confirming the order passed by the learned single Judge.
It is an admitted fact that the property purchased by the
petitioner under registered document Nos.459 and 460 of 2014 dated
20.01.2014 was shown as item No.4 and 5 of G.O.Ms.No.21 dated
28.01.2019 issued by the Government exercising power under Section
3 of the Act No.17 of 1999. It is not known whether any application is
filed by the State to make the attachment absolute in exercise of
power under Section 4 (1) of the Act No.17 of 1999.
It is an undisputed fact that the alleged property of the
petitioner was attached by way of interim attachment under Section 3
of the Act No.17 of 1999 and the respondents might have filed an CJ and MSM,J WA_749_2021 5
application under Section 4 of the Act No.17 of 1999 to make the
interim attachment absolute. As per Section 6 (4) of the Act No.17 of
1999 the Special Court shall, on an application by the competent
authority, pass such order or issue such direction as may be
necessary for equitable distribution among the depositors of the
money realised from out of the property attached.
Learned counsel for the petitioner made an attempt to
demonstrate that Section 3 and 8 of the Act No.17 of 1999 have no
application since the property belonging to the petitioner is not the
property belonging to Agri Gold and it is not the case of the state that
it attracts Section 8 of the Act No.17 of 1999.
The Andhra Pradesh Protection of Depositors of Financial
Establishment Act, 1999, is a self contained Code, prescribed certain
procedures and framed Rules thereunder. When such procedure is
prescribed, the procedure laid down in the Act has to be scrupulously
followed. On the other hand, arrangement of sections in the Act itself
is clear as to the step by step procedure to be followed by the persons
connected with those cases under the Act.
Section 3 of the Act deals with attachment of properties on
default in respect of deposits:- Notwithstanding anything contained in
any other law for the time in force--
1) Where, upon complaints received from a depositor or
depositors, that any financial establishment defaulted or is
likely to default in the return of deposits in cash or kind after
maturity, or in any manner agreed upon; or
2) 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;
CJ and MSM,J WA_749_2021 6
and if the Government is satisfied that such financial establishment is
not likely to return the deposits in cash or kind after maturity, or in
any manner agreed upon, the Government may, in order to protect
the interests of the depositors of such financial establishment, pass
an ad-interim order attaching the 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 the financial establishment, or if it transpires that such
money or other property is not available for attachment or not
sufficient for repayment of the deposits, such other property of the
said financial establishment, or the promoter, manager or member of
the said financial establishment, as the Government may think fit,
and transfer the control over the said money or property to the
competent authority.
Here, in the present case, the property allegedly purchased by
the petitioner under two documents i.e. document Nos.459 and 460 of
2014 dated 20.01.2014 was attached, since, Section 3 permits
passing ad interim order attaching the 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
the financial establishment. The petitioner is third party and the
G.O.Ms.No.21 dated 28.01.2019 did not state that the property was
acquired with the money from and out of the deposits collected by the
financial establishment. In paragraph No.6 of G.O.Ms.No.21 Home
(General.A) Department dated 28.01.2019 it is clear that the Crime
Investigation Department, Andhra Pradesh has also reported that
some more immovable properties located at Kondaveedu Village,
Phirangipuram Mandal of Guntur District, Kedareeswaripet, CJ and MSM,J WA_749_2021 7
Vijayawada City, Durgi and Obulesunipalli Villages of Durgi Mandal of
Guntur District, Payakapuram, Satyanarayanapuram, Ayodhyanagar
of Vijayawada City, Ambapuram of Vijayawada Rural are identified in
the name of M/s Agri Gold Projects Pvt., Ltd., represented by its Vice-
Chairman Avva Venkata Seshu Narayana Rao, M/s Agri Gold Farm
Estates India Pvt., Ltd., represented by its Director Avva Venkata
Seshu Narayana Rao; Avva Alivelu Mangatayaru, W/o Avva Venkata
Rama Rao; Avva Sitarama Rao; Avva Venkata Sivarama Krishna
Subba Rao and Avva Venkata Siva Ram; Avva Karunsree, W/o Avva
Venkata Seshu Narayana Rao; Avva Sridevi, W/o Avva Udaya
Bhaskara Rao; Avva Venkata Subramanneswara Sarma; Avva Satya
Venkateswara Rao @ Kotamraju Satya Sairam @ Sairam; Adavikolanu
Venu Gopala Rao; Avva Udaya Bhaskara Rao; Avva Madhavi Latha,
W/o AHSV Prasad; Avva Hema Sundara Vara Prasad. The immovable
property located at Film Nagar, Shaikpet Village, Hyderabad of
Telangana State in the name of M/s Sanctuary Homes Pvt., Ltd.,
represented by its Director Avva Pushapa Latha, W/o Avva Sitarama
Rao purchased in the year 2013 vide Doct.No.2936/2013 and later
sold out the said property to one Thata Ravi of Yusufguda, Hyderabad
after registration of the case.
Therefore, the respondents prima facie concluded that the
properties are in the name of M/s. Agri Gold Farms Estates India
Private Limited and M/s Agri Gold Projects Pvt. Ltd. represented by its
Managing Directors. In fact, the property in the present case already
registered in the name of the petitioner on 20.01.2014, whereas crime
was registered in the year 2018. Therefore, by the date of registration
of crime for committing default in payment of amount by the financial
establishment, the property was already allegedly alienated, but CJ and MSM,J WA_749_2021 8
whether the petitioner would fall within the definition of ―other
person‖ referred in Section 3 (ii) of the Act No.17 of 1999 is to be by
the competent Special Court recording evidence, if necessary.
Learned counsel for the petitioner also made an attempt to
distinguish Sections 8 and 3 of the Act No.17 of 1999. Section 8 of the
Act No.17 of 1999 permits attachment of property of certain
transferees. According to the petitioner, the petitioner is a transferee
of property referred to in Section 3 of the Act No.17 of 1999. But,
certain other procedure is prescribed saving certain transactions took
place in ‗good faith' and for valuable consideration and for any of the
property otherwise than in good faith and for valuable consideration,
the Special Court may, by notice, require any transferee of such
property, whether or not he received the property directly from the
said final establishment, to appear on a date to be specified in the
notice and show cause why so much of the transferee's property as is
equivalent to the value of the property transferred should not be
attached. Thus, notice is required to be issued to attach the property
of the transferee under Section 8 of the Act No.17 of 1999 before
making the ad interim attachment absolute. These, two Section Nos.3
and 8 of the Act No.17 of 1999 have to be read conjointly. However,
the question of purchase of property in ‗good faith' for valuable
consideration is a clear question of fact. While exercising jurisdiction
under Article 226 of the Constitution of India, this Court cannot
undertake process of conducting enquiry to find out whether the
transfer is in ―good faith‖ or not.
In any view of the matter, when special procedure is prescribed
under the Act No.17 of 1999, the petitioner can invoke the jurisdiction
of Special Court for redressal of his grievance. Instead of redressing CJ and MSM,J WA_749_2021 9
his grievance by availing effective efficacious remedy, the petitioner
approached this Court by filing writ petition under Article 226 of the
Constitution of India, which will not undertake conduct of enquiry by
recording evidence to decide the issue of fact. Therefore, learned
single Judge rightly directed the petitioner to approach the Special
Court by availing effective, efficacious statutory remedy.
It is settled law that when a statutory remedy is available, the
Courts would not normally entertain writ petition.
In ―Genpact India Private Limited v. Deputy
Commissioner of Income Tax and another1" the Division Bench of
the Apex Court held that, when a statutory remedy is available under
the statute, the Court would not normally entertain the writ petition
against assessment order. The Apex Court finally concluded that, if
the submission is accepted, every time the dispute will be required to
be taken up in proceedings such as a petition under Article 226 of the
Constitution, which normally would not be entertained in case of any
disputed questions of fact or concerning factual aspects of the matter.
The assessee may thus, not only lose a remedy of having the matter
considered on factual facets of the matter but would also stand
deprived of regular channels of challenges available to it under the
hierarchy of fora available under the Act.
In ―Commissioner of Income Tax and others v. Chhabil
Dass Agarwal2" the Apex Court held as follows:
―Before discussing the fact proposition, we would notice the principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule
1 (2019) 311 CTR (SC) 737 2 (2014) 1 SCC 603 CJ and MSM,J WA_749_2021 10
of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. (See State of U.P. v. Mohd. Nooh3, Titaghur Paper Mills Co. Ltd. v.
State of Orissa4, Harbanslal Sahnia v. Indian Oil Corpn. Ltd5 and State of H.P. v. Gujarat Ambuja Cement Ltd6)
In view of the law declared by the Apex Court, when a statutory
remedy is available, the Court may not normally entertain petition
under Article 226 of the Constitution of India which is purely
discretionary in nature.
Therefore, we find no error in dismissing the writ petition
granting liberty to the petitioner to avail effective, efficacious and
statutory remedy available under the Act No.17 of 1999.
Consequently, the appeal is liable to be dismissed.
In the result, the writ appeal is dismissed confirming the order
dated 28.04.2020 passed in W.P.No.11176 of 2019 by the learned
single Judge. No costs.
The miscellaneous petitions pending, if any, shall also stand
closed.
PRASHANT KUMAR MISHRA, CJ M. SATYANARAYANA MURTHY,J Ksp
3 AIR 1958 SC 86 4 (1983) 2 SCC 433 5 (2003) 2 SCC 107 6 (2005) 6 SCC 499
