Madras High Court
Shri.M.Anandaramakrishnan vs State Of Tamil Nadu on 24 July, 2023
CMA No. 378/ 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24.07.2023
CORAM :
THE HONOURABLE MR. JUSTICE SUNDER MOHAN
C.M.A. No. 378 of 2022
and C.M.P.No.2673 of 2022
Shri.M.Anandaramakrishnan ... Appellant/Respondent
Versus
1.State of Tamil Nadu,Rep.by
The Deputy Superintendent of Police
Economic Offences Wing – II
Head Quarters, Anna Nagar
Chennai – 600 040.
2.M/s.Maduvanthi Finance Company Pvt.Ltd.
Having office at
No.7, 6th Cross Street
Dhandeeswaran Nagar
Velecherry, Chennai – 600 042. ...Respondents/Petitioners
PRAYER : Civil Miscellaneous Appeal filed under Order 41 Rule 1 of
Code of Civil Procedure seeking to setaside the order and decreetal order
dated 30.11.2018 passed in Criminal Original Petition No.2 of 2013
before the Hon'ble Chief Judge, Court of Small Causes, Chennai.
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CMA No. 378/ 2022
For Appellant : M/s. Srinath Sridevan
For Respondents : Mr. Edwin Prabhakar
Additional Government Pleader for R1
JUDGMENT
The appeal has been filed challenging the order passed by the
learned Chief Judge, Court of Small Causes, Chennai in Crl.O.P.No.2 of
2013.
2. The facts reading to the filing of the above appeal are as
follows:
(a) A case in Crime Nos.1154 of 1996 and 203 of 1997 were
registered against the appellant and others under Sections 409, 420
and 506(ii) r/w 120 - B of the Indian Penal Code, by the
Deputy Superintendent of Police, Economic Offences Wing II Head
Quarters, Anna Nagar, Chennai – 600 040.
(b) The first respondent/Deputy Superintendent of Police filed an
application in Crl.O.P.No.2 of 2013 under Section 3 (1) of the Criminal
Law Amendment Ordinance 1944, on 30.07.2013 stating that the
appellant was managing the affairs of the Company by name Maduvanthi
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CMA No. 378/ 2022
Finance Company Private Limited; that the said Company had collected
deposits from the general public to the tune of Rs.1.6 Crores and did not
repay the depositors; that the appellant purchased a property from out of
the collected deposits which is a proceeds of crime; that hence, the said
property is liable for attachment and hence, prayed for attachment of the
property belonging to the appellant.
(c) The second respondent in the said Crl.O.P.No.02
of 2013/appellant herein filed a counter stating that he was a Company
Secretary and was a salaried employee of various companies; that the
Company M/s.Madhuvanthi Finance and Investment (P) Ltd., was started
by his brother and his wife in 1991; that his father was made a Director
of the Company in the year 1996; that he was never involved in the
business of the said Company; that he had purchased the property sought
to be attached in the year 2001, for a sale consideration of Rs.14,00,000/-
(Rupees Fourteen Lakhs only) in instalments and through a loan obtained
from State Bank of India; that the property was not purchased from any
deposit collected and that he had nothing to do with the alleged offence
committed by the Company.
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CMA No. 378/ 2022
(d) The learned Chief Judge, Small Causes Court, Chennai passed
an order in Crl.O.P.No.2 of 2013 observing that the final reports have
been filed on the basis of investigation before the concerned
learned Chief Metropolitan Magistrate, Chennai in C.C.Nos.9503 and
9504 of 2022; that though the appellant is not a Director of the Company,
since he is a Company Secretary, the question whether he was involved
in the affairs of the company or not is for the Criminal Court to decide;
that though the appellant produced Xerox copies of certain documents,
he had not produced copy of the sale deed to show whether it was
purchased by means of an housing loan; that in any case, those facts can
be decided by the Criminal Court; that if the attachment of the property is
raised, the investors' interest would be prejudiced and therefore, the
attachment has to be made absolute and it is for the appellant to establish
before the Criminal Court, the source of the funds for the property
acquired by him.
3. Mr.Srinath Sridevan, the learned Senior Counsel for the appellant/
submitted that the impugned order passed by the learned Chief Judge,
Court of Small Causes, Chennai is liable to be set aside on two grounds:
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CMA No. 378/ 2022
(i) The learned Chief Judge, Court of Small Causes, Chennai has
not decided the objections and had observed that the appellant has to
establish his innocence before the Criminal Court. Under Section 5 of the
Criminal Law Amendment Ordinance, 1944, the District Judge while
investigating the objections raised by the property owners should follow
the procedure and exercise all the powers of the Court in hearing the Suit
under Civil Procedure Code. However, in the instant case, the learned
Chief Judge, Court of Small Causes, Chennai had disposed of the
application on the basis of a petition and counter and no opportunity was
given to the appellant to adduce evidence. The learned senior counsel
relied up on the Judgment of the Hon’ble Bombay High Court in State of
Maharashtra and another Vs. Laxman Ramji Bade reported in 1980
SCC Online Bom 73.
(ii) The offence is alleged to have taken place prior to 1997.
Therefore, the provision of Criminal Law Amendment Ordinance, 1944
would not be applicable since the offences said to have been committed
by the appellant was not a scheduled offence, at the time of its alleged
commission.
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CMA No. 378/ 2022
4. Mr.Edwin Prabhakar, the learned Additional Government Pleader
for the first respondent, per contra, submitted that though the learned
Chief Judge, Court of Small Causes, Chennai in his impugned order had
stated that the appellant should establish his innocence before the
Criminal Court, no evidence was produced on behalf of the appellant to
show that the property sought to be attached had nothing to do with the
alleged offence. The order would further show that no witnesses were
examined either on the side of the appellant or the first respondent. Since
the appellant had opportunity to adduce the evidence, it cannot be said
that the order passed by the learned Chief Judge is erroneous. The
learned Additional Government Pleader further submitted that the
appellant had not raised the point with regard to applicability of the
Provisions of the Criminal Law Amendment Ordinance, 1944 before the
learned Chief Judge, Court of Small Causes, Chennai. Hence, the order
cannot be assailed on that ground.
5. The question before this Court is whether the order passed by the
District Judge making the interim order of attachment absolute is in
accordance with law.
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CMA No. 378/ 2022
6. This Court on a reading of the order finds that the learned Chief
Judge has not considered the question whether the property was procured
by means of an offence. Section 3 of the Criminal Law Amendment
Ordinance, 1944 makes it clear; that if the Government has reasons to
believe that any person has committed a scheduled offence, it can
authorise the making of an application to the District Judge for an
attachment of the property which the Government believes the said
person to have procured by means of the said offence, or if such property
cannot be attached any other property equivalent to the value of the
aforesaid property. Section 4 of the Criminal Law Amendment
Ordinance, 1944 provides for circumstances under which an order of
interim attachment can be made. Section 5 of the Criminal Law
Amendment Ordinances provides for dealing with objections to the order
of attachment. Section 5 of the Criminal Amendment Acts/Ordinances
reads as follows:
“5. Investigations of objections to
attachment – If no cause is shown and no
objections are made under Section 4 on or
before the specified date, the District Judge
shall forthwith pass an order making the ad
interim order of attachment absolute.
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CMA No. 378/ 2022
(2) If cause is shown or any
objections are made as aforesaid, the
District Judge shall proceed to investigate
the same, and in so doing, as regards the
examination of the parties and in all other
respects he shall, subject to the provisions
of this Ordinance, follow the procedure and
exercise all the powers of a Court in
hearing a suit under the Code of Civil
Procedure, 1908 (5 of 1908) and any
person making an objection under section 4
shall be required to adduce evidence to
show that at the date of the attachment he
had some interest in the property attached.
(3) After investigation under sub-
section (2), the District Judge shall pass an
order either making the ad interim order of
attachment absolute or varying it by
releasing a portion of the property from
attachment or withdrawing the order:
Provided that the District Judge shall not-
(a) release from attachment any
interest which he is satisfied that the person
believed to have committed a scheduled
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CMA No. 378/ 2022
offence has in the property unless he is also
satisfied that there will remain under
attachment an amount of the said person's
property of value not less than that of the
property believed to have been procured by
the said person by means of the offence, or
(b) withdraw the order of attachment
unless he is satisfied that the said person
had not, by means of the offence, procured
any money or other property.
7. The above provision would show that while considering the
objections, the District Judge concerned shall conduct an investigation to
ascertain if the order of interim attachment can be made absolute. While
conducting an investigation, the learned District Judge shall examine
parties and follow the procedure prescribed for hearing a Suit under
Civil Procedure Code. After such investigation, the learned
District Judge has to render a finding as to whether the property sought
to be attached had been procured by means of the offence said to have
been committed by him. In the instant case, it is seen that the learned
District Judge has not done such an exercise.
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CMA No. 378/ 2022
8. The respondent in the first place ought to have shown
prima facie as to how the property was procured by means of an offence.
Thereafter, the respondent ought to have been given an opportunity to
adduce evidence in support of his objection. The learned Chief Judge,
Small Causes Court in the impugned order had observed as follows:
“6... In case of raising attachment if
the criminal court later come to a
conclusion as this property is also proceeds
of the crime, the investors interest will be
prejudiced. On the other hand, this
respondent is having opportunity to
establish the nature of the property by
producing original documents and by
examining bank officials before the trial
Court.”
9. The above observation would make it clear that the learned
District Judge has left it to the Criminal Court to decide whether the
property sought to be attached was procured by means of the crime.
The learned Judge has proceeded on the basis that if the interim
attachment is not made absolute, then the investors would suffer and
observed that the appellant will have sufficient opportunity before the
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CMA No. 378/ 2022
Criminal Court to establish that he had not procured the property by
means of the offence. This approach is contrary to the object and the
scope of provisions of Criminal Law Amendment Ordinance, 1944.
The District Judge is bound to examine the issue as to whether the
property sought to be attached was procured by the means of the offence
or that it is a property which is equivalent to the property procured by
means of the offence. This exercise cannot be done by the Criminal
Court. The Criminal Court is concerned with the commission of the
offences mentioned in the final report. Therefore, this Court is of the
view that the order of the Chief Judge, Court of Small Causes, Chennai,
is liable to be set aside and the matter has to remanded back before the
Chief Judge, Court of Small Causes, Chennai, to adjudicate the issue in
terms of the provisions of Criminal Law Amendment Ordinance, 1994,
after giving sufficient opportunity to both the appellant and the first
respondent.
10. With the above observations, the Civil Miscellaneous Appeal
is allowed remanding the matter back to the Chief Judge, Cause of Small
Court, Chennai therein for fresh consideration, after giving opportunity
to all the parties concerned. Consequently, the connected Miscellaneous
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CMA No. 378/ 2022
Petition is closed. It is also made clear that the order of interim
attachment made in Crl.M.P.No.1415 of 2013 shall continue until such
disposal of the Crl.O.P.No.2 of 2013 by the learned Chief Judge, Court
of Small Causes, Chennai.
24.07.2023
dk
Index: Yes/No
Speaking Order / Non-Speaking Order
Neutral Citation: Yes / No
To
1.The Chief Judge, Court of Small Causes,
Chennai.
2.The Deputy Superintendent of Police,
Economic Offences Wing II
Head Quarters
Anna Nagar,
Chenna – 600 040.
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CMA No. 378/ 2022
SUNDER MOHAN, J
dk
C.M.A. No. 378 of 2022
and C.M.P.No.2673 of 2022
Dated: 24.07.2023
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