Kerala High Court
Highrich Online Shoppe Private Limited vs The Competent Authority on 21 June, 2024
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR
FRIDAY, THE 21ST DAY OF JUNE 2024 / 31ST JYAISHTA, 1946
CRL.APPEAL NO. 784 OF 2024
AGAINST THE ORDER DATED 27.04.2024 IN CRMP NO.2460 OF
2024 OF THE ADDITIONAL SESSIONS COURT(ADHOC)-III,
THRISSUR
APPELLANTS/RESPONDENTS:
1 HIGHRICH ONLINE SHOPPE PRIVATE LIMITED,
DOOR NO.TC41/1030/14, SECOND FLOOR,
KANIMANGALAM TOWER, VALIYALUKKAL, THRISSUR,
REPRESENTED BY ITS MANAGING DIRECTOR,
PIN - 680027.
2 KOLATT DASAN PRATHAPAN.
AGED 43 YEARS, S/O. DASAN, KOLATT HOUSE,
KARUVAN VALAVU, ERAVU P.O., THRISSUR,
PIN - 680620.
3 SREENA PRATHAPAN,
AGED 35 YEARS,
W/O. KOLATT DASAN PRATHAPAN, KOLATT HOUSE,
KARUVAN VALAVU, ERAVU P.O., THRISSUR,
PIN - 680620.
BY ADVS.
P.A.MOHAMMED SHAH
RENOY VINCENT
SHAHIR SHOWKATH ALI
ABEE SHEJIRIK FASLA N.K
CHELSON CHEMBARATHY
MUHAMED JUNAID V.
ADITH KRISHNAN.U.
FATHIMA AFEEDA P.
SHERIN SHERIYAR
AFEEFA NAFEESA C.C.
2
Crl.Appeal No.784 of 2024
RESPONDENTS/PETITIONER & ADDL.R2:
1 THE COMPETENT AUTHORITY
UNDER THE BANNING OF UNREGULATED DEPOSIT
SCHEMES ACT, 2019, HOME SECRETARY, SECRETARIAT,
THIRUVANANTHAPURAM, REPRESENTED BY PUBLIC
PROSECUTOR, HIGH COURT OF KERALA, KOCHI,
PIN - 695001.
2* DISTRICT COLLECTOR, THRISSUR
DISTRICT COLLECTOR OFFICE, CIVIL STATION,
AYYANTHOLE, THRISSUR - 680003.
*ADDL.R2 IMPLEADED AS PER ORDER DATED
05.06.2024 IN CRL.M.A.2/2024 IN CRL.A.784/2024.
SHRI.P.NARAYANAN, SPL. G.P. TO DGP AND
ADDL.P.P.
SHRI.SAJJU.S., SENIOR G.P.
SMT.SEENA C., PUBLIC PROSECUTOR
THIS CRIMINAL APPEAL HAVING COME UP FOR FINAL
HEARING ON 12.06.2024, THE COURT ON 21.06.2024 DELIVERED
THE FOLLOWING:
3
Crl.Appeal No.784 of 2024
P.G. AJITHKUMAR, J.
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Crl.Appeal No.784 of 2024
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Dated this the 21st day of June, 2024
JUDGMENT
This is an appeal filed under Section 19 of the Banning of
Unregulated Deposit Schemes (BUDS) Act, 2019. The
appellants challenge Annexure A9 order of the Special Court,
Thrissur. As per the impugned order, a petition filed by the
respondent-Competent Authority seeking to confirm the
provisional order of attachment and permission to sell the
attached properties of the 1 st appellant-company was allowed.
The petitions filed by the appellants seeking to release the
properties from attachment and allow them to reopen the
supermarket in question were dismissed. The appellants
challenge the said common orders both on legal and factual
grounds.
2. Heard the learned counsel for the appellants and
the learned Special Government Pleader.
3. The 1st appellant is a private limited company and
appellants No.2 and 3 are its Managing Director and Director
respectively. The 1st appellant was conducting a supermarket
and online business under the name and style Highrich Online
Shoppe Pvt.Ltd. It was conducting a deposit scheme also
under the guise of trading of grocery products, personal care,
etc. Following the allegation that the said scheme was
violative of the provisions of Prize Chits and Money Circulation
Schemes (Banning) Act, 1978 (PCMCS Act), Crime No.1070 of
2023 was registered in Cherpu Police Station. Annexure A2 is
a copy of the F.I.R.
4. The appellants collected a huge sum of money
through the said business. They therefore allegedly had
committed the offences punishable also under Sections 3 r/w
21, 4 r/w 22, 5 and 6 r/w 23 of the BUDS Act. The
respondents allege that the appellants illegally had collected
an amount of more than Rs.3000 crores and they laundered
that money. Following registration of such a crime, the
Competent Authority under the BUDS Act ordered under
Section 7(3) of the BUDS Act provisional attachment of all the
movable and immovable properties of the appellants.
Annexure A3 is the copy of the order.
5. The 2nd respondent District Collector, Thrissur
submitted Crl.M.P.No.2460 of 2024 before the Special Court
under Sections 14(1) and 15 of the BUDS Act seeking
confirmation of the order of attachment and permission to sell
the attached properties. There was a delay of 71 days in filing
that petition. Therefore, the 2 nd respondent, through the
Public Prosecutor filed Crl.M.P.No.2514 of 2024 under Section
5 of the Limitation Act, 1963 to condone the delay. The
appellants filed objections to both the said petitions. It was
contended that Section 5 of the Limitation Act was not
applicable and the delay was not liable to be condoned. The
procedural irregularities and lack of reasons in the order of
attachment were pointed out to defend the plea for
confirmation of the attachment and permission for sale.
6. In the meantime, the appellants filed
Crl.M.P.No.2390 of 2024 with a prayer to lift the attachment
ordered by the Competent Authority in terms of Annexure A3.
They also filed Crl.M.P.No.2392 of 2024 claiming a relief that
they be allowed to reopen the supermarket on the premises
that it was necessary for protecting the interest of the
customer. The respondents filed objections to both those
petitions.
7. The Special Court considered all those petitions
together and passed the impugned common order. Holding
that Section 5 of the Limitation Act is applicable, the delay
was condoned. The Special Court also found that the
appellants collected money from the customers in violation of
the restrictive provisions contained in the BUDS Act and the
appellants siphoned off the money so collected. Accordingly, it
was held that the attachment ordered by the Competent
Authority was for sufficient reasons and permission to sell the
attached properties was liable to be granted. Apropos that
order the petition filed by the appellants for lifting the
attachment and permission to reopen the supermarket were
dismissed.
8. The learned counsel for the appellants would
submit at the outset that no application under Section 14(1)
of the BUDS Act beyond a period of 60 days could be
entertained and the Special Court has no jurisdiction to
condone the delay by applying Section 5 of the Limitation Act.
In support of that contention, the learned counsel for the
appellants places reliance on the decisions of the Apex Court
in Union of India v. Popular Construction Co. [(2001) 4
SCC 160], Commissioner of Customs and Central Excise
v. Hongo India (P) Ltd. and others [JT 2009 (7) SC 83],
M/s Radha Krishnan Industries v. State of Himachal
Pradesh and others [2021 SCC OnLine SC 334], etc. The
learned Public Prosecutor, on the other hand, would submit
that Section 5 of the Limitation Act applies to the case on
hand and in order to buttress that plea he places reliance on
Brahampal @ Sammay and another v. National
Insurance Company [(2021) 6 SCC 512] and G.Ramdoss
v. Competent Authority/District Revenue Officer and
others [2023 SCC OnLine Mad.3770].
9. The learned counsel for the appellants would
further submit that the attachment has a drastic effect and
therefore strict interpretation of the provision enabling the
attachment should have been adopted. It is submitted that
when an act is allowed by the law to be done in a particular
manner, it can be done in that manner alone. Section 7(3) of
the BUDS Act enables the Competent Authority alone to order
attachment and take steps for getting the attachment
absolute and to sell the attached properties. By virtue of
Section 14(1) of the BUDS Act the Competent Authority can
order attachment only if there is sufficient reason, which shall
be reflected in its order.
10. The learned counsel for the appellants would
submit that Annexure A3 does not contain any reason, leave
alone sufficient reason, to arrive at a conclusion that the
properties of the appellants were to be attached. Annexure A2
F.I.R. was registered on the basis of the complaint of a person
having objectionable credentials and the allegations in it alone
are absolutely insufficient to support an order of attachment.
Therefore, it is contended that the attachment as per
Annexure A3 is illegal. Annexures A5 and A6 petitions were
submitted by or on behalf of the District Collector, who is not
the Competent Authority for the purpose of Section 14(1) of
the BUDS Act. It is accordingly submitted that the Special
Court went totally wrong in confirming the attachment and
granting permission to sell the attached properties.
11. The learned Special Government Pleader made a
strenuous attempt to justify the attachment as per Annexure
A3 order and also the order of the Special Court contained in
Annexure A9.
12. The Special Court considered the period of
limitation specified in Section 14(1) of the BUDS Act as 60
days and took the view that there is no express exclusion of
application of Section 5 of the Limitation Act. Holding that the
reason stated in Annexure A6 application sufficient, the delay
was condoned. Section 14(1) of the BUDS Act reads,-
"14. Application for confirmation of attachment and sale
of property.- (1) The Competent Authority shall, within a
period of thirty days, which may extend up to sixty days,
for reasons to be recorded in writing, from the date of
the order of provisional attachment, file an application
with such particulars as may be prescribed, before the
Designated Court for making the provisional attachment
absolute, and for permission to sell the property so
attached by public auction or, if necessary, by private
sale."
13. The period of limitation prescribed is 30 days and
the Special Court is empowered to extend the period upto 60
days for the reasons to be recorded in writing. Applicability of
Section 5 of the Limitation Act has to be considered in the
light of the said provision, which enables the court to extend
the period of limitation upto 60 days.
14. In G.Ramdoss (supra) the Madras High Court held
that Section 5 of the Limitation Act would be applicable to
proceedings before the Special Court under the Tamil Nadu
Protection of Interest of Depositors (In Financial
Establishment) Act, 1997. The period of limitation fixed under
Section 4(3) of that Act is 60 days. No provision is provided in
the said provision for extension of the period. It was held in
that context that Section 5 of the Limitation Act did not get
excluded by the application of Section 29(2) of the Limitation
Act. It was held that even the usage that the competent
authority 'shall' file the application within 60 days would not
exclude application of Section 5 of the Limitation Act.
15. In Brahampal @ Sammay (supra) the question
was concerning applicability of Section 5 of the Limitation Act
to appeals filed beyond the prescribed period of 90 days under
Section 173 of the Motor Vehicles Act, 1988. There the Apex
Court held that the Motor Vehicles Act being a beneficial
legislation and no provision for extension of the period is
provided in the Statute, the Appellate Court can extend the
period of limitation by applying Section 5 of the Motor
Vehicles Act.
16. The said proposition of law is not applicable to the
instant case for, the provisions of Section 14(1) of the BUDS
Act itself provides for extension of the period. Similar question
was considered in a slew of decisions by the Apex Court. In
Union of India v. Popular Construction Co [(2001) 8
SCC 470] the Apex Court considered the question of
applicability of the provisions contained in Section 5 of the
Limitation Act to the proceedings under Section 34(3) of the
Arbitration and Conciliation Act, 1996 (Conciliation Act). The
proviso to Section 34(3) provides three months' period for
making an application. The court, if satisfied on sufficient
cause shown, may entertain the application within a further
period of thirty days, but not thereafter. It was observed that
as far as the language of Section 34 of the Conciliation Act is
concerned, the crucial words are "but not thereafter" used in
the proviso to sub-section (3). Accordingly, it was held that
this phrase would amount to an express exclusion within the
meaning of Section 29(2) of the Limitation Act and would,
therefore, bar the application of Section 5 of that Limitation
Act. Parliament did not need to go further. To hold that the
court could entertain an application to set aside the
award beyond the extended period under the proviso, would
render the phrase "but not thereafter" wholly otiose. It was
held that no principle of interpretation would justify such a
result.
17. The said principle was dilated by a three Judge
Bench of the Apex Court in Consolidated Engineering
Enterprises v. Irrigation Department [(2008) 7 SCC
169]. Following is the relevant discussion:
"53. Sub-section (3) of Section 34 of the AC Act
prescribes the period of limitation for filing an
application for setting aside an award as three months
from the date on which the applicant has received the
arbitral award. The proviso thereto vests in the court
discretion to extend the period of limitation by a
further period not exceeding thirty days if the court is
satisfied that the applicant was prevented by sufficient
cause for not making the application within three
months. The use of the words "but not thereafter" in
the proviso makes it clear that even if a sufficient
cause is made out for a longer extension, the
extension cannot be beyond thirty days. The purpose
of proviso to Section 34(3) of the AC Act is similar to
that of Section 5 of the Limitation Act, which also
relates to extension of the period of limitation
prescribed for any application or appeal. It vests a
discretion in a court to extend the prescribed period of
limitation if the applicant satisfies the court that he
had sufficient cause for not making the application
within the prescribed period. Section 5 of the
Limitation Act does not place any outer limit in regard
to the period of extension, whereas the proviso to sub-
section (3) of Section 34 of the AC Act places a limit on
the period of extension of the period of limitation. Thus
the proviso to Section 34(3) of the AC Act is also a
provision relating to extension of period of limitation,
but differs from Section 5 of the Limitation Act, in
regard to period of extension, and has the effect of
excluding Section 5 alone of the Limitation Act."
(underline supplied)
18. The law thus explained is that when the special
provision enables the court, in a case where the appellant or
applicant was prevented by sufficient cause from presenting
the appeal or application within the prescribed period, to allow
it to be presented within a further period fixed therein, the
appeal or application has to be submitted within that period
and not thereafter. The intention of the legislature in including
such a provision for extension of the period of limitation is to
completely exclude application of Section 5 of the Limitation
Act.
19. In the light of the proposition of law that emerges
from the aforesaid decisions, Section 14(1) of the BUDS Act
can be interpreted only in the way that there is exclusion of
application of Section 5 of the Limitation Act. Therefore, the
view taken by the Special Court that the delay could be
condoned applying Section 5 of the Limitation Act is incorrect.
Crl.M.P.No.2514 of 2024 which was filed seeking to condone
the delay of 71 days therefore was to be dismissed.
20. The delay could not be condoned and therefore
Crl.M.P.No.2460 of 2024, which was filed under Section
14(1) read with Section 15 of the BUDS Act beyond the
period of 60 days, was to be dismissed. When the said
petition is liable to be dismissed on the ground of limitation,
the contentions put forth by either side on the merits are not
liable to be considered. True, when the petition seeking
confirmation of the attachment and permission to sell the
properties is dismissed, the petitions filed by the appellants
seeking to remove the attachment and allow them to reopen
the supermarket need consideration. The Special Court did
not consider those petitions, Crl.M.P.Nos.2390 and 2392 of
2024 on merits. It is therefore quite undesirable for this
Court to consider those petitions on the merits. The
appellants can move the Special Court for that purpose. It is,
however, made clear that dismissal of the petition filed by
the respondents seeking confirmation of the attachment and
permission to sell being on the ground of limitation alone,
there shall not be any bar for initiating a fresh proceedings
by the Competent Authority in the matter in accordance with
law.
This Crl.Appeal is allowed with the aforesaid
observations.
Sd/-
P.G. AJITHKUMAR, JUDGE
dkr
PETITIONER ANNEXURES
ANNEXURE A1 THE TRUE COPY OF THE MEMORANDUM OF
ASSOCIATION OF THE APPELLANT NO.1
COMPANY
ANNEXURE A2 A TRUE COPY OF FIR NO.1070/2023 OF
CHERPU POLICE STATION, THRISSUR RURAL
DATED 18.09.2023
ANNEXURE A3 A TRUE COPY OF THE PROVISIONAL
ATTACHMENT ORDER PASSED BY THE
RESPONDENT DATED 21.11.2023
ANNEXURE A4 THE TRUE COPY OF THE CRL. M.P. NO.
2390/2024 FILED BY THE APPELLANTS
BEFORE THE ADDITIONAL SESSIONS COURT -
III, THRISSUR DATED 11.03.2024
ANNEXURE A5 THE TRUE COPY OF THE CRL. M.P. NO.
2392/2024 FILED BY THE APPELLANTS
BEFORE THE ADDITIONAL SESSIONS COURT -
III, THRISSUR DATED 11.03.2024
ANNEXURE A6 THE TRUE COPY OF THE CRL. M.P.
NO.2460/2024 FILED BY THE RESPONDENT
BEFORE THE ADDITIONAL SESSIONS COURT -
III, THRISSUR DATED 16.03.2024
ANNEXURE A7 THE TRUE COPY OF THE CRL. M.P.
NO.2514/2024 FILED BY THE RESPONDENT
BEFORE THE ADDITIONAL SESSIONS COURT -
III, THRISSUR DATED 16.03.2024
ANNEXURE A8 THE TRUE COPY OF THE OBJECTIONS FILED
BY THE APPELLANTS IN CRL. M.P.
ANNEXURE A9 THE CERTIFIED COPY OF THE ORDER PASSED
BY THE ADDITIONAL SESSIONS COURT -
III, THRISSUR IN CRL. M.P.
NO.2460/2024 DATED 27.04.2024
ANNEXURE A10 THE TRUE COPY OF THE TAX INVOICE
ISSUED TO A MEMBER OF THE 1ST
APPELLANT COMPANY DATED 08.09.2023
ANNEXURE A11 THE TRUE COPY OF THE TAX INVOICE
ISSUED TO A MEMBER OF THE 1ST
APPELLANT COMPANY DATED 12.09.2023
