Sukhjit Singh@ Sukkha vs Deputy Director Directorate Of Enforcement, Jalandhar

Sr. No.,"Identification Details &

Description of Properties",Acquisition Date,Acquisition Cost,Mode of Payment

1,"Fortuner Toyota Car bearing

Chasis No. MB1- JV

5104012375, Engine No.

1KDU245961, Model 2013

purchased by Sukhjit Singh @

Sukha",-,"Value to the extant of

Rs. 13,88,260/-","Fortuner Toyota Car

bearing Chasis No.

MB1-JV5104012375,

Engine No.

1KDU245961, Mode

2013 purchased by

Sukhjit Singh @

Sukha

Adjudicating Authority stated in the show cause notice that he had reason to believe that there existed the factors necessary to serve the,,,,

notice. The reasons, in turn, stand incorporated in the notice from the complaint. It is apparent that the notice has been issued based on the",,,,

reasons to be found in the complaint and the documents which have been expressly referred to in the complaint. The complaint itself,,,,

expressly sets out the reason to believe. If. on the basis of the facts disclosed in the enclosures, the Adjudicating Authority had formed the",,,,

opinion that there was no reason to believe the existence of the factors mentioned in section 8. he would not have issued the show cause,,,,

notice. That he did indicates that he had reason to believe the existence of the said factors. In the facts and circumstances of the case this is,,,,

sufficient compliance.â€​,,,,

Shri S.A. Saud, learned counsel appearing on behalf of respondent submits that in view of the said decisions the prayer of the appellant is liable to",,,,

be rejected. He further submits that there is prescribed procedure under the rules of the act, for the purpose of release of the vehicle the same are to",,,,

be followed by the appellant in present case also by depositing the amount as per rules, therefore the vehicle can only be released to him. He submits",,,,

that since the appellant has failed to follow the procedure, the prayer cannot be granted. The leave of the Court is not required in view of the decisions",,,,

referred above.,,,,

Admittedly, the vehicle in question is in the custody of the Court. The provisional attachment was confirmed by the impugned order. As far as",,,,

custody of the courts the said issue has been dealt with in the case of Teeka Vs. State of U.P reported AIR 1961 SC page 801 at 805 in para 7 which,,,,

reads as under:-,,,,

“7. The next question is, what is the effect of a valid attachment of movables? Order XXI, R. 43, of the Code of Civil Procedure describes",,,,

the mode of attachment of moveable properties other than agricultural produce in the possession of the judgment-debtor. It says that the,,,,

attachment of such properties shall be made by the actual seizure, and the attaching officer shall keep the attached property in his own",,,,

custody or in the custody of one of his sub-ordinates & shall be responsible for the due custody thereof. The relevant rule framed by the,,,,

Allahabad High Court is R. 116, which reads,",,,,

“Live stock which has been attached in execution of a decree shall ordinarily be left at the place where the attachment is made either in,,,,

custody of the judgment-debtor on his furnishing security, or in that of some land-holder or other respectable person willing to undertake",,,,

the responsibility of its custody and to produce it when required by the Court.â€​,,,,

The aforesaid rule also empowers the attaching officer to keep the animals attached in the custody of a sapurdar or any other respectable,,,,

person. Attachment by actual seizure involves a change of possession from the judgment-debtor to the court, and the rule deals only with the",,,,

liability of the attaching officer to the court. Whether the amin keeps the buffaloes in his custody or entrusts them to a sapurdar, the",,,,

possession of the amin or the sapurdar is in law, the possession of the court and, so long as the attachment is not raised, the possession of",,,,

the court continues to subsist. Would it make any difference in the legal position if the sapurdar, for convenience or out of necessity, keeps",,,,

the said animals with a responsible third party? In law the said third party would be a bailee of the sapurdar. Would it make any difference,,,,

in law when the bailee happens to be the decree-holder? Obviously it cannot, for the decree â€"holderâ€s custody is not in his capacity as",,,,

decree-holderâ€s custody is not in his capacity as decree-holder but only as the bailee of the sapurdar. We, therefore, hold that the decree-",,,,

holderâ€​s possession of the buffaloes in the present case was only as a bailee of the sapurdar.â€​,,,,

Admittedly no application by the authorized officer has been filed before the Special court by providing the copy of the attachment issued under,,,,

sub section 1 of section (5) and the order passed under sub-section 3 of section 8 passed by the Adjudicating Authority. It is evident that the,,,,

possession of the vehicle is taken by the respondent without informing the Court.,,,,

Rule 7 of PMLA is read as under:-,,,,

“7. Confirmed attached property in the custody of court â€" (1) Where the confirmed attached property is in the custody of any court, the",,,,

authorized officer shall make an application to such court by providing a copy of the provisional attachment order issued under sub-section,,,,

(1) of section 5 and the order under sub-section (3) of section 8 passed by the Adjudication Authority.,,,,

(2) The application referred to in sub-rule (1) shall contain a relief that such property and any interest or dividend payable thereon may be,,,,

released in favour of the Directorate of Enforcement.â€​,,,,

The principles laid down by Supreme Court in the case of Kanhaiyalal V. Dr. D.R. balaji and others [1959 SCR 333: AIR 1958 SC 725 ]are that it,,,,

is settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under,,,,

Order 40, rule 1 of the Code of Civil Procedure without leave of that Court are illegal in the sense that the party proceeding against the property",,,,

without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held do not affect the",,,,

interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entitled to",,,,

the same. The proposition canvassed are appropriately considered in rendering the findings.,,,,

“It is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed,,,,

by Court under Order 40, Rule 1 of the Code of Civil Procedure, without the leave of that Court, are illegal in the sense that the party",,,,

proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the",,,,

proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who,",,,,

ultimately, may be adjudged by the Court to be entitled to the same. The learned counsel for the respondent was not able to bring to our",,,,

notice any ruling of any Court in India, holding that a sale held without notice to the Receiver or without the leave of the Court appointing",,,,

the Receiver in respect of the property, is void ab initio. In the instant case, we do not think it necessary to go into the question raised by the",,,,

learned counsel for the respondents that a sale of a property in the hands of the Court through its Receiver, without the leave of the Court,",,,,

is a nullity. The American Courts appear to have taken the view that such a sale is void. In our opinion, it is enough to point out that the",,,,

High Court took the view that the sale was voidable and could be declared illegal in a proper proceeding or by suit. We shall assume for,,,,

the purposes of this case that such a sale is only voidable and not void ab initio.,,,,

On the assumption that the sale held in this case without the leave of the Court and without notice to the Receiver, is only voidable and",,,,

can be declared illegal on that very ground, the suit had been instituted for the declaration that the sale by the revenue courts was illegal.",,,,

The plaint was subsequently amended by adding the relief for recovery of possession, “because in the meanwhile, the auction-purchaser",,,,

had obtained delivery of possession of the property through the revenue authorities, some time in 1940. The general rule that property in",,,,

custodia legis through its duly! appointed Receiver is exempt from judicial process except to the extent that the leave of that court has been,,,,

obtained, is based on a very sound reason of public policy, namely, that there should be no conflict of jurisdiction between different Courts.",,,,

If a court has exercised its power to appoint a Receiver of a certain property, it has done so with a view to preserving the property for the",,,,

benefit of the rightful owner as judicially determined. If other Courts or Tribunals of co-ordinate or exclusive jurisdiction were to permit,,,,

proceedings to go on independently of the Court which has placed the custody of the property in the hands of the Receiver, there was a",,,,

likelihood of confusion in the administration of justice and a possible conflict of jurisdiction. The Courts represent the majesty of law, and",,,,

naturally, therefore, would not do anything to weaken the rule of law, or to permit any proceedings which may have the effect of putting",,,,

any party in jeopardy for contempt of court for taking recourse to unauthorised legal proceedings. It is on that very sound principle that,,,,

the rule is based. Of course, if any Court which is holding the property in custodia legis through a Receiver or otherwise, is moved to grant",,,,

permission for taking legal proceedings in respect of that property, the Court ordinarily would grant such permission if considerations of",,,,

justice require it. Courts of justice, therefore, would not be a party to any interference with that sound rule. On the other hand, all Courts",,,,

of justice would be only too anxious to see that: property in custodia legis is not subjected to un-controlled attack, while, at the same time,",,,,

protecting the rights of all persons who may have claims to the property.â€​,,,,

There is no provision in the said Act which authorizes the ED to attach the movable or immovable property which is in the custody of court without,,,,

the leave is granted by the Court. It is settled law that when the property becomes Custodia Legis, the owner of such property loses all its right and",,,,

interest therein. Any authority who wished to take the possession of immovable or movable property for the offences committed by the accused in,,,,

other proceedings, the authorize officers has to approach the respective court who is in custody of the said property.",,,,

Even otherwise the decisions referred by the counsel for the respondent have no bearing in the binding decision of the Supreme Court [AIR 1958,,,,

S.C. 725] in the case of Kanhaiyalal (Supra) as in the judgment referred by Mr. Saud has not been discussed or referred the decisions of the Supreme,,,,

Court wherein it was mandated that if the possession and management of a receiver had been appointed by the court, such attachment is illegal",,,,

without leave of that court.,,,,

As the decision of the Supreme Court is always binding in nature and higher court decision has to be followed. The same cannot be ignored even if,,,,

due to oversight or that it has not come to the notice of the High court who have taken different views. There is no valid ground if raise by any party,,,,

that the Supreme Court decision has not been referred by counsel or party because it was not noticed because at the end, dicta of the decision of the",,,,

Supreme Court Judgment is to be followed. This issue has been dealt by the subsequent decision of the Supreme Court in the case ofS outh Central,,,,

Railway Employees Cooperative Credit Society Employees Union Vs. B. Yashodabahi and Ors. Civil Appeal No. 7130 of 2002, decided on",,,,

December 8, 2014 reported in (2015) 2 Supreme Court Cases 727 of page 732 & 733 in para 11-15 it is held as under:-",,,,

“11. We have heard the learned counsel at length and have also considered the submissions made, the judgments relied upon by the",,,,

counsel, the earlier judgment delivered by this Court in South Central Railway Employees Coop. Credit Society Employees' Union v.",,,,

Registrar of Coop. Societies and the impugned judgment. In our opinion, the High Court has committed a grave error by taking a different",,,,

view than the one which had been taken by this Court in South Central Railway Employees Coop. Credit Society Employees†Union v.,,,,

Registrar of Coop. Societies, especially when the rules governing the promotion policy had not been amended after the aforestated",,,,

judgment was delivered by this Court. It is pertinent to note that a review application had been filed in the aforestated South Central,,,,

Railway Employees Coop. Credit Society Employees†Union v. Registrar of Coop. Societies and the same had been rejected and therefore,",,,,

the judgment delivered by this Court in South Central Railway Employees Coop. Credit Society Employees†Union v. Registrar of Coop.,,,,

Societies had become final.,,,,

Once in pursuance of a judgment delivered by this Court orders had been issued by the Society to its employees who had been wrongly,,,,

promoted, the High Court could not have held that the orders were not valid because there were certain other factors which had made the",,,,

promotions given to the employees concerned valid.,,,,

In our opinion, the High Court should not have considered any other factor especially when this Court had come to a final conclusion",,,,

that the policy with regard to reservation in the matter of promotion to the employees was not legal and proper.,,,,

We are of the view that it was not open to the High Court to hold that the judgment delivered by this Court in South Central Railway,,,,

Employees Coop. Credit Society Employees' Union v. Registrar of Coop. Societies was per incuriam.,,,,

If the view taken by the High Court is accepted, in our opinion, there would be total chaos in this country because in that case there",,,,

would be no finality to any order passed by this Court. When a higher court has rendered a particular decision, the said decision must be",,,,

followed by a subordinate or lower court unless it is distinguished or overruled or set aside. The High Court had considered several,,,,

provisions which, in its opinion, had not been considered or argued before this Court when CA No. 4343 of 1988 was decided. If the",,,,

litigants or lawyers are permitted to argue that something what was correct, but was not argued earlier before the higher court and on that",,,,

ground if the courts below are permitted to take a different view in a matter, possibly the entire law in relation to the precedents and ratio",,,,

decidendi will have to be rewritten and, in our opinion, that cannot be done. Moreover, by not following the law laid down by this Court,",,,,

the High Court or the subordinate courts would also be violating the provisions of Article 141 of the Constitution of India.â€​,,,,

The present case is better footing in view of specific provision of rule 7, the procedure stipulated cannot ignored. In the judgments referred by Mr.",,,,

Saud the judgment of the Supreme Court in the case of Kanhaiyalal Vs. D.R. Banaji and Others has not been referred nor the rule 7 has been,,,,

considered.,,,,

Rule 7 of PMLA is very clear that the authorized officers of the respondent has to file the application before Spl. Court providing the order passed,,,,

under section 5 & 8 (3) of the Act. In the present case the said procedure has not been followed by the respondent. No application for seeking the,,,,

leave has been filed. No different interpretation can be given once the language of the Rule is clear.,,,,

The respondent may be entitled to take the possession of the confirmed attachment property only if the leave of the court is granted who is having,,,,

the custody of the vehicle. Therefore, if so required authorized officers has to make a application to such court by providing the copy of the",,,,

Provisional Attachment Order and confirmation order by the Adjudicating Authority. Nothing of that sort has happened in the present case.,,,,

In the present case, we are of the view that the custody taken by the respondent is unauthorized without following the procedure of Rule-7, even",,,,

without informing the Court. The respondent, therefore, shall handover the possession of the vehicle to the appellant forthwith who shall not dispose of",,,,

the said vehicle in any manner directly or indirectly during the pendency of the appeal. The respondent is at liberty to move such application as,,,,

provided under sub rule 7 of PMLA before the Special Court. If such application is filed it would be decided accordingly.,,,,

The appellants’ application is accordingly disposed of.,,,,