B.S.A. Swamy, J.
1. The Asstt. CIT, Circle I, Ayakar Bhavan, Hyderabad, is the appellant herein who is the complainant in C.C. No. 124 of 1991. Aggrieved by the orders passed by the Special Judge for Economic Offences, Hyderabad, dt. 24th May, 1993, the present appeal is filed.
2. The facts in this case are not in dispute. The IT Act as it stood prior to 1st April, 1989, under s. 276DD provides for prosecution of persons who received deposits or loans otherwise than by an account payee bank cheque or account payee draft and provides for imprisonment for a term extending to two years and also liable to fine equal to the amount of such loan or deposit. But Parliament in its wisdom omitted the said section from the Act by the Direct Tax Laws (Amendment) Act, 1987, which came into force on 1st April, 1989. In this case, the Department launched the prosecution against the accused for accepting the deposit otherwise than by way of account payee cheque or account payee bank draft on different dates subsequent to 1st April, 1989, by contending that though s. 276DD is omitted s. 269SS is on the statute book, and any violation of that provision must necessarily lead to criminal prosecution. In support of their case, they relied on r. 132A of the Defence of India Rules, 1962, promulgated under the Defence of India Act. But the said rule ceased to be in existence on the issuance of a notification by the Ministry of Home Affairs on 30th March, 1965, by which the Defence of India (Amendment) Rules, 1965, were promulgated. In a case of identical nature such a contention was negatived by the Supreme Court way back in 1970 in Rayala Corporation (P) Ltd. vs. Director of Enforcement AIR 1970 SC 494, wherein their Lordships, while adverting to the arguments of Mr. Sen, conceded the possibility that if a prosecution had already been started while r. 132A was in force, that prosecution might have been competently continued. Once the rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might be in respect of an offence committed earlier during the period that the rule was in force. We are inclined to agree with the submission of Mr. Sen that the language contained in clause 2 of the Defence of India (Amendment) Rules, 1965, can only afford protection to action already taken while the rule was in force, but cannot justify initiation of new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist. On this interpretation, the complaint made for the offence under r. 132A(4) of the Defence of India Rules, after 1st April, 1965, when the rule was omitted, has to be held invalid.
3. That being the settled legal position with regard to a provision which has been omitted or ceased to be in force, the Department in this case filed the present complaint for the deposits accepted by the accused after omission of s. 276DD. They not only filed the complaint and failed in their attempt to get the accused convicted but also preferred several appeals on the file of this Court. My learned brother Justice Bapat passed a detailed order in Crl. Appeal No. 257 of 1994, dt. 3rd September, 1996. It is not known how many hundreds or thousands of cases of such frivolous nature were filed all over the country. This Court notes with concern the apathy on the part of the officials and the way they are squandering away public money without any justification. Unless the aspect of accountability is introduced for the commissions and omissions on the part of the officials concerned, there is no safety for the public monies in the hands of these officers.
4. The complaint as well as the appeal are frivolous and the magistrate rightly has thrown out the complaint.
5. The appeal is, therefore, dismissed.