Judgment:
P.S. Narayana, J.
1. These Civil Miscellaneous Appeals are filed as against Common Order made in I.A. No. 1841/2004, I.A. No. 1842/2004 and I.A. No. 1843/2004 in I.A. No. 387/2003 in O.P. No. 434/2003 on the file of Chief Judge, City Civil Court, Hyderabad under Section 11 of the Criminal Law Amendment Ordinance, 1944, hereinafter in short referred to as 'Ordinance' for the purpose of convenience. The respective appellants herein as petitioners moved the said applications under Section 4(4) of the Ordinance to raise the attachment in respect of 3rd and 6th floord Adithya Enclave, Ameerpet, Hyderabad and office space No. 2 on the first floor of the commercial complex known as Manjeera Square in MCH Ward No. 7, Block No. G of MaithriviharComplex, Ameerpet, Hyderabad. In the light of the respective stands taken by the parties, the learned Judge having marked Exs.P-1 to P-4 and Exs. R-1 to R-6 in I.A. No. 1841/2004, Exs. P-1 to P-3 and Exs. R-1 to R-6 in I.A. No. 1842/2004 and Exs. P-1 to P-3 and Exs. R-1 to R-6 in I.A. No. 1843/2004 came to the conclusion that there are no justifiable grounds to raise the attachment over the property and ultimately dismissed the applications without costs. Aggrieved by the same, the present Civil Miscellaneous Appeals had been preferred under Section 11 of the Ordinance as specified supra.
2. Contentions of Sri B. Adinarayana Rao: Sri B. Adinarayana Rao, the learned Counsel representing the appellants in all these Civil Miscellaneous Appeals in all fairness would maintain that though this Ordinance is styled as Ordinance, in fact it is an Enactment and the same is operative even to this day. The learned Counsel also had taken this Court through the language employed in Sections 3, 4, 5 and 6 of the Ordinance and also further explained the relationship of the parties to the accused who sold the property in favour of the purchasers. The learned Counsel also would maintain that fraud had been pleaded and no evidence had beer, let in by either of the parties. The learned Counsel would maintain that when the title deeds are marked, instead of placing the burden on the prosecution, the State, placing the burden on the claimants and refusing to raise at attachment cannot be sustained. The learned Counsel also would submit that when the language of Section 3 r/w. Section 6 of the Ordinance, if carefully analysed, the learned District Judge had no jurisdiction at all to make an order of attachment. The procedure under Section 6 of the Ordinance had not been followed and the plea of benami may have to be established by the State. On the aspect of mala fide transfer, the learned Counsel made elaborate submissions and would maintain that inasmuch as the language of Section 3 and Section 6 being not clear, it is too much on the part of the learned Judge to observe that these provisions of the Ordinance would be applicable since these provisions do not engulf such transactions. The Counsel also pointed out to the repeated observations made by the learned Judge on the aspect of burden of proof and also non-adducing of any oral evidence in this regard and in the light of the said observations, in the event of the Court not accepting with the contentions advanced by him, it may be just and proper to give an opportunity to the appellants as well as the State, if need be, to adduce further evidence relating to the nature of the transactions.
3. Contentions of the learned Advocate General : The learned Advocate General Sri C.V. Mohan Reddy would maintain that though the Ordinance is styled as an Ordinance, the same is an Enactment made under Government of India Act 1935 and the same is operative. The learned Advocate General while further elaborating his submissions would maintain that on a careful reading of the language of both Sections 3 and 6 of the Ordinance, it appears these applications in a way are pre-mature. Even otherwise, prima facie, these transfers are fraudulent transfers and in the light of the procedure contemplated by Sections 4, 5 and 6 of the Ordinance, even before the notice was sent under Section 6 of the Ordinance, these parties had approached the Court. These are the assets, prima facie, belonging to the accused shown to be in the hands of third parties. The learned Advocate General also had explained the relationship of the vendors of these transactions being the wife and sons of the accused. The learned Advocate General also would contend that to maintain a claim and to be successful it would be essential to establish that it is not a mala fide transaction. The means or resources to be explained and it should be established that the transactions are genuine and such attachments to be adverse to the interest of such claimants. In cases of this nature, it cannot be expected that the State may be able to adduce any evidence whatsoever since negative evidence cannot be disbelieved the claimants are expected to adduce positive evidence. The learned Advocate General also had explained in detail the object of the Ordinance and how the persons accused of the commission of the scheduled offences could be procuring properties in the names of kith and kin which can be taken judicial notice of. The Legislative intent lying behind these provisions of the Ordinance may have to be kept in mind. The learned Advocate General also had pointed out to Section 13 of the Ordinance and also further pointed out the relevant observations made by the learned Judge at paras 19 and 21. The learned Advocate General also while further elaborating his submissions pointed out that no rejoinder as such had been filed and when specific stand had been taken relating to the benami nature of the transactions, the burden is on the claimants to prove that these properties were acquired by them bona fide and though ample opportunity had been given, no oral evidence had been adduced and now a request is being made to make an order of remand to fill up lacunae. The learned Advocate General also pointed out that in the facts and circumstances of the case, adverse inference to be drawn. The learned Advocate General also had relied upon certain decisions to substantiate his contentions. Thus, ultimately the elaborate submissions made by the learned Advocate General were concluded with a request that the Civil Miscellaneous Appeals being devoid of merit, the same to be dismissed.
4. Main provisions under the Ordinance : The Ordinance, Ordinance 38/1944, is an Ordinance to prevent the disposal or concealment of property procured by means of certain offences. The ordinance specifies:
Whereas an emergency has arisen which makes it necessary to provide for preventing the disposal or concealment of money or other property procured by means of certain offences punishable under the Indian Penal Code.
The Ordinance also specifies that:
Now therefore in exercise of powers conferred by Section 72 of the Government of India Act as set out in the ninth schedule to the Government of India Act, 1935, the Governor-General is pleased to make and promulgate the following Ordinance.
Section 2 of the Ordinance deals with Interpretation. Section 2(1) defines 'Scheduled Offences' as the offence specified in the Schedule to the Ordinance. Section 3 of the Ordinance dealing with Application for attachment of property reads as hereunder:
(1) Where the State Government or as the case may be, the Central Government has reason to believe that any person has committed (whether after the commencement of this Ordinance or not) any scheduled offence, the State Government or as the case may be, the Central Government may, whether or not any Court has taken cognizance of the offence, authorize the making of an application to the District Judge within the local limits of whose jurisdiction the said person ordinarily resides or carries on business, for attachment under this Ordinance of the money or other property which the State Government or as the case may be, the Central Government believes the said person to have procured by means of the offence, or if such money or property cannot for any reason be attached of other property of the said person or value as nearly as may be equivalent to that of the aforesaid money or other property.
(2) The provisions of Order XXVII of the First Schedule to the Code of Civil Procedure, 1908, shall apply to proceedings for an order of attachment under this Ordinance as they apply to suits by the Government.
(3) An application under Sub-section (1) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the said person has committed any scheduled offence is founded, and the amount of money or value of other property believed to have been procured by means of the offence. The application shall also furnish-
(a) any information available as to the location for the time being of any such money or other property, and shall, if necessary, give particulars, including the estimated value, of other property of the said person;
(b) the names and addresses of any other person believed to have or to be likely to claim, any interest or title in the property of the said person.
Strong reliance was placed on the words 'believes the said person to have procured by means of the offence, or if such money or property cannot for any reason be attached of other property of the said person or value as nearly as may be equivalent to that of the aforesaid money or other property.' Section 4 of the Ordinance deals with Ad interim attachment and the said provision reads as hereunder:
(1) upon receipt of an application under Section 3 the District Judge shall, unless for reasons to be recorded in writing he is of the opinion that there exists no prima facie grounds for believing that the person in respect of whom the application is made has committed any scheduled offence or that he has procured thereby any money or other property, pass without delay an ad interim order attaching the money or other property alleged to have been so procured, or if it transpires that such money or other property is not available, for attachment of such other property of the said person of equivalent value as the District Judge may think fit;
Provided that the District Judge may if he thinks fit before passing such order, and shall before refusing to pass such order examine the person making the affidavits accompanying the application.
(2) At the same time as he passes an order under Sub-section (1) the District Judge shall issue to the person whose money or other property is being attached a notice accompanied by copies of there order, the application and affidavits and of the evidence, if any recorded calling upon him to show cause on a date to be specified in the notice why the order of attachment should not be made absolute.
(3) The District Judge shall also issue notice, accompanied by copies of the document accompanying the notice under Sub-section (2), to all persons represented to him as having or being likely to claim, any interest or title in the property of the person to whom notice is issued under the said sub-section calling upon each such person to appear on the same date as that specified in the notice under the said sub-section and make objection if he so desires to the attachment of the property or any portion thereof on the ground that he has an interest in such property or portion thereof.
(4) Any person claiming an interest in the attached property or any portion thereof may notwithstanding that no notice has been served upon him under this section make an objections as aforesaid to the District Judge at any time before an order is passed under Sub-section (1) or Sub-section (3), as the case may be, of Section 5.
Strong reliance was placed on Sub-section (2) and Sub-section (3) of Section 4 of the Ordinance specified supra. Section 5 of the Ordinance deals with Investigation of abjections to attachment and the same reads as hereunder:
(1) 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.
(2) If cause if 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 transaction provisions of this Ordinance, follow the procedure and exercise all the powers of the Court in hearing a suit under the Code of Civil Procedure, 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 or 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 form attachment any interest which he is satisfied that the person believed to have committed a scheduled 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 has not by means of the said offence procured any money or other property.
Strong reliance was placed on proviso (a) of Sub-section (3) of Section 5 of the Ordinance. Section 6 of the Ordinance deals with Attachment of property of mala fide transferees and the said provision reads as hereunder:
(1) Where the assets available for attachment of a person believed to have committed a scheduled offence are found to be less than the amount or value which he is believed to have procured by means of such offence, and where the District Judge is satisfied by affidavit or otherwise, that there is reasonable cause for believing that the said person has, after the death on which the offence is alleged to have been committed, transferred (whether after the commencement of this Ordinance or not) any of his property otherwise than in good faith and for consideration, the District Judge may by notice require any transferee of such property (whether or not received the property directly from the said person) to appear on date to be specified in the notice and show cause why so much of the transferee's property as id equivalent to the proper value of the property transferred should not be attached.
(2) Where the said transferee does not appear and show cause on the specified date, or where after investigation in the manner provided in Sub-section (2) of Section 5, the District Judge is satisfied that the transfer of the property to the said transferee was not in good faith and for consideration, the District Judge shall order the attachment of so much of the said transferee's property as is in the opinion of the District Judge equivalent to the proper value of the property transferred.
Section 7 of the Ordinance deals with Execution of orders of attachment. Section 8 of the Ordinance deals with Security in lieu of attachment. Section 9 of the Ordinance deals with Administration of attached property. Section 9-A of the Ordinance deals with Administration of attached property where Court ordering attachment has ceased to exercise jurisdiction in India. Section 10 of the Ordinance deals with Duration of attachment. Section 11 of the Ordinance deals with Appeals. Section 12 of the Ordinance deals with Criminal Court to evaluate property procured by scheduled offences. Section 13 of the Ordinance dealing with Disposal of attached property upon termination of criminal proceedings reads as hereunder:
(1) Upon the termination of any criminal proceedings for any scheduled offence in respect of which any order of attachment of property has been made under this Ordinance or security given in lieu thereof, the agent of the State Government or as the case may be, the Central Government shall without delay inform the District Judge, and shall where criminal proceedings have been taken in any Court, furnish the District Judge with a copy of the judgment or order of the trying Court and with copies of the judgments or orders, if any, of the appellate or revisional Courts thereon.
(2) Where it is reported to the District Judge under sub-section (1) that cognizance of the alleged scheduled offence has not been taken or where the final judgment or order of the criminal Courts is one of the acquittal, the District Judge shall forthwith withdraw any orders of attachment of property made in connection with the offence, or where security has been given in lieu of such attachment, order such security to be returned.
(3) Where the final judgment or order of the Criminal Courts is one of conviction the District Judge shall order that from the property of the convicted person attached under this Ordinance or out of the security given in lieu of such attachment there shall be forfeited to Government such amount or value as is found in the final judgment or order of the Criminal Courts in pursuance of Section 12 to have been procured by the convicted person by means of the offense together with the costs of attachment as determined by the District Judge and where the costs of attachment as determined by the District Judge and where the final judgment or order of the Criminal Courts has imposed or upheld a sentence of fine on the said person (whether alone or in conjunction with any other punishment), the District Judge may order, without prejudice to any other mode of recovery, that the said fine shall be recovered from the residue of the said attached property or of the security given in lieu of attachment.
(4) Where the amounts ordered to be forfeited or recovered under Sub-section (3) exceed the value of the property of the convicted person attached and where the property of any transferee of the convicted person has been attached under Section 6, the District Judge shall order that the balance of the amount ordered to be forfeited under Sub-section (3) together with the costs of attachment of the transferee's property as determined by the District Judge shall be forfeited to Government from the attached property of the transferee or out of the security given in lieu of such attachment; and the District Judge may order without prejudice to any other mode of recovery that any fine referred to in sub-section shall be recovered from the attached property of the transferee or out of security given in lieu of such attachment.
(5) If any property remains under attachment in report of any scheduled offence or any security given in lieu of such attachment remains with the District Judge after his orders under Sub-sections (3) and (4) have been carried into effect the order of attachment in respect of such property remaining shall be forthwith withdrawn or as the case may be the remainder of the security returned, under the orders of the District Judge.
(6) Every sum ordered to be forfeited under this section in connection with any scheduled offence other than one specified in/item 1 of the Schedule to this Ordinance shall, after deduction of the costs of attachment as determined by the District Judge, be credited to the Government (being a Government referred to in the said schedule) or local authority to which the offence has caused loss or where there is more than one such Government or local authority, the sum shall, after such deduction as aforesaid, be distributed among them in proportion to the loss sustained by each. Section 14 of the Ordinance deals with Bar to other proceedings. Section 15 of the Ordinance deals with Protection of action taken and the Schedule also is shown.
5. As already specified supra, these Civil Miscellaneous Appeals had been preferred as against a Common Order. The facts in brief are as hereunder. The 2nd respondent in these Civil Miscellaneous Appeals, K. Venkateswar Rao, formerly Superintendent in Pay and Accounts Office had without checking-up the genuineness of bills and without verification of counter signature of ASWO with that of specimen signature available at the office, non-drawal certificate, advance stamped receipt etc., passed a number of post-metric SC/ST scholarship bills and pre-metric scholarship bills of various bogus colleges and schools i.e., (1) Citizen College, (2) Aditya College, (3) Keys Jr. College, (4) Priyanka Gandhi College for Women (5) Shivji Degree College, (6) Chanakya College, (7) Alikya Jr. College (8) DVR College, (9) SC College, (10) Saptagiri College, (11) RSM College, Langar House, (12) Global College, (13) Misco College, (14) APEX College, (15) BNS College, (16) Royal College, (17) Oxford College, (18) Red Rose College, (19) Galsriel College (20) Al-Ameen Jr. College, (21) Al-Ameen Degree College, (22) Bala Gangadhar Tilak Degree College, (23) Koumdi Jr. College, (24) KMR Degree College, (25) Kusuna Harnath Baba Jr. College, (26) Vaishnavi Jr. College, (27) SRR College, (28) Om Sai Degree College, (29) Sri Bharathi Degree College, (30) Narmada College of Arts & Commerce, (31) Saraswathi Jr. College, (32) Veda Vyas College of Arts & Commerce, (33) Mudrika Graduate College, (34) Lokmanya Tilak Law College, (35) RSM College, Sainagar and schools: (1) Effaiath High School, (2) St. George High School, (3) Sriniketan High School, (4) Divya Teja High School, (5) New Eden High School, (6) Chaitnaya High School, (7) RSM High Schools (8) Alekya High School. It is also stated that he conspired with the officials of Social Welfare Department by name D. Shankar Rao, Accountant in Social Welfare Department, Mothya Nayak, Warden in the same Department and other officials such as ASWO, DSWO etc., and had taken 20% of bill amount for each bill and passed the bogus bills during his tenure and had purchased in his name and in the name of his family members 18 fiats at Ameerpet area with the ill-gotten money worth Rs. 1,18,91,000/- and movable properties i.e., gold ornaments and cash etc., worth Rs. 3,71,842/- all worth Rs. 1,22,62,842/-. Thus he had cheated the Government by passing the said scholarship bills of bogus colleges and schools and misappropriated the amounts and the total amount of misappropriation with the support of the officials had been worked out to Rs. 8 crores. On a report, a case was registered in Crime No. 151/2002 under Section 468 r/w. Section 420 IPC. The Assistant Commissioner of Police, Central Zone, Detective Department filed an application under Section 3 of the Ordinance for attachment of the properties and interim attachment was obtained in I.A. No. 387/2003. The respective appellants herein filed I.A. Nos. 1841, 1842 and 1843 of 2004 for raising the said attachment.
6. The stand taken by the appellants/ applicants is that they purchased these properties by virtue of the respective sale deeds marked as Ex. P-1 in all these applications. They also relied upon Ex. P-2, Ex. P-3 and Ex. P-4 in I.A. No. 1841/2004 and Ex. P-2 and Ex. P-3 in I.A. No. 1842/2004 and Ex. P-2 and Ex. P-3 in I.A. No. 1843/2004 apart from Ex. P-1. The State relied upon Ex. R-1 to Ex. R-6 in I.A. No. 1841/2004, Ex. R-1 to Ex. R-6 in I.A. No. 1842/2004 and Ex. R-1 to Ex. R-6 in I.A. No. 1843/2004. The learned Judge had taken into consideration the respective stands of the parties, the averments made in the claim applications, the counter affidavits filed resisting the same, recorded reasons in detail and ultimately came to the conclusion that the applications being devoid of merit, they are liable to be dismissed and accordingly dismissed the said applications.
7. Submissions at length were made on the aspect of burden of proof in the light of the language employed in Sections 3, 4, 5 and 6 of the Ordinance in particular. The learned Judge at para-14 framed the following Point for consideration:
Whether the petitioners in these petitions made out that they are owners in their own right without concern whatsoever with respondent No. 2 and that they have interest in the property on the date of attachment?
The learned Judge proceeded to discuss the Point commencing from paras 15 to 36 and ultimately negatived the relief prayed for by virtue of the Common Order. The learned Judge at para-13(c) observed:
Except filing the above documents, the petitioners in these petitions did not let in any oral evidence to substantiate their 'A'' pleadings and sources of consideration and that they have anything to do with respondent No. 2.
The learned Judge also at para-19 observed:
At the outset I may state that the claimants except filing title deeds, encumbrance certificates and tax receipts, did not adduce any oral evidence to show that they are bonafide purchasers for value have no connection whatsoever with respondent No. 2, the accused in criminal case or for that matter, with respondents 3 to 5. It is not known why they have not chosen to come to the witness box and reiterate the facts. More so, when respondent No. 1 in its counter mentioned that respondent No. 2, one of the accused, being the husband of respondent No. 3 and the father of respondents 4 and 5.
The learned Judge also at para-21 observed:
The petitioner in I.A. No. 1841/04 didnot chose to examine herself to prove the sale deeds dated 26-7-2001 marked as Exs. P-1 and P-2 in this petition. The petitioner has purchased for a consideration of Rs. 9.50,000/- an office space No. 3-A and 3-B, item 2 of A and B Schedule in third floor at Aditya Trade Center, Aditya Enclave, Ameerpet, Hyderabad under Exs.P-1 and P-2 registered sale deeds from respondents No. 3 K. Shyamala and Manjeera Estates Private Limited, a builder. It is not in dispute that one of the vendors, K. Shyamala is the wife of K. Venkateswara Rao, former Superintendent in Pay and Accounts Office, an accused in CCs. Nos. 1/03, 2/03 and 3/03 evidenced under Exs. R-3 to R-5. It was in the year 2001 during the period of the scam. It is not known as to how Shyamala got the property. The source of acquisition of the property is the main crux of the matter.
(a) K. Shyamala, respondent No. 3 herein filed an affidavit stating that she is a housewife and with her own sou rce of income she purchased the property. She being the wife of the accused and she having sold the property during the scam period, the petitioner ought to have examined himself or her vendor to prove that the property was acquired by her with her own funds and the same was sold to the petitioner. The petitioner could have examined herself in order to prove that she has nothing to do with the vendor. Mere filing of the sale deeds and encumbrance certificates would in no, way prove that the petitioner was a bona fide purchaser for value without notice of the offence. The burden casted underOrdinance was not rebutted.
(b) In the counter of respondent-1, there was a mention,-
In this case K. Venkateswar Rao who does not have any other source of income acquired immovable properties in question in favour of his wife and sons. His wife and two sons do not have any independent source of income to acquire those properties without pressing in to services the ill gotten money obtained by him as stated above. Later on he thought it better to hold those properties benamies in favour of 3rd parties by way of sale deeds as if the petitioner in question had purchased the same in order to prevent the Government of Andhra Pradesh from taking suitable steps according to law for confiscation of the said properties, acquired by him investing the ill gotten money as stated above. During the trial of the cases, now under investigation by the officers of ACB all the details relating to the benami transactions will be established and these claimants are claiming forward only to help the accused.... There is ample prima facie evidence to show that the money with which the said properties were acquired by K. Venkateswara Rao.
It is submitted that the alleged sale transactions, payment of sale considerations by petitioner to Smt. K. Shyamala w/o. K. Venkateswar Rao (K. Venkateswar Rao who is an accused in all the three criminal cases bearing No. 1/2003,2/2003 and 3/2003 pending on the file of the Hon'ble Special Judge under Prevention of Corruption Act for speedy trial of cases of Embezzlement of scholarships amounts in Social Welfare Departments etc., at Hyderabad) are nothing but benami transactions created to defeat the Government claim. Which clearly and clinchingly establishes that transactions are benami created for the purpose of cheating the Government of A.P. All the above facts clearly establish that the petitioner is aware and hand in glove with Respondent No. 2 and his activities. The petitioner herein is neither bona fide purchaser not the real owner as such entitled to any relief as prayed for in this petition.
The learned Judge also made certain observations how the self-same petitioner purchased the properties. The learned Judge also further observed at para-23:
He could have examined himself to rebut that he got nothing to do with his father and he has his source of income separately or independently from that of his father in order to justify to hold that the property has no concern with the scam....
The learned Judge also further observed that when importantly respondents 3 to 5 are wife and sons of K. Venkateswar Rao, one of the accused, and since these transactions were made during the scam period, it is not prudent that attachment could be raised on the ground that these transactions have nothing to do with the alleged scam. The learned Judge further observed at para-24 as hereunder:
Simply because that they have obtained registered documents it could not be said that it is their money and that they have purchased the property. When fraud is pleaded and unless the facts are let in to show that they are bona fide purchasers just from perusing the documents it cannot be inferred that the documents ex-facie as bona fide documents of title and they should be upheld. May be all these transactions are make believe transactions. The real facts could be known only if they are subjected to cross-examination.
8. It is true that in matters of this nature, the State may not be able to establish facts which may be otherwise within the exclusive knowledge of the claimants or the vendors of the claimants. Since the vendors of the claimants being the family members of Venkateswar Rao, the accused of the Scheduled offences, this order of attachment appears to have been made. Strong reliance was placed on the decision in Vidyadhar v. Manikrao and Anr : 1999(3)ALT1 wherein the Apex Court held that where a party to the suit does not appear into the witness box and state his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct. Reliance also was placed on Narbada Devi Gupta v. Birendra Kumar Jaiswal : AIR2004SC175 wherein the Apex Court while dealing with Sections 17, 61 and 62 of the Indian Evidence Act 1872 held that mere production and marking of a document as exhibit is not enough and execution has to be proved by admissible evidence but where documents produced are admitted by the signatories thereto and then marked as exhibits, no further burden lies to lead additional evidence to prove the writing and its execution survives. In G.L. Salwan v. The Union of India and Anr. 1960 Crl. L.J. 984 it was held that the object is to freeze money or property improperly obtained by a Government servant in his official capacity or money or property belonging to the Government regarding which an offence is alleged to have been committed so that on the conclusion of the case, in the event of the conviction of the accused, the money or property is available for immediate restoration to the Government and the Ordinance does not in any way contravene provisions of Article 14 of the Constitution of India.
9. Forfeiture under Section 3 of the Ordinance in the context of Article 20(1) of the Constitution of India had been dealt with in State of West Bengal v. S.K. Ghosh : [1963]2SCR111 and State of West Bengal v. S.K. Ghosh 1963 (1) Crl. L.J. 252 6. The duration of the order had been dealt with in N.K. Banerji v. State of Bihar 1969 Crl. L.J. 1178, In Suraj Kumah v. State A.I.R. 1969 Patna. 30 it was held that although the first part of Section 3 of the Ordinance relating to attachment refers to money or property procured by means of the offence, but the second part refers to any other money or any other property of the accused person and the point for consideration is not whether it was established on behalf of the State whether the house was built out of the amount defalcated but the real question for determination by the District Judge was whether it was the property of the accused. In State of Hyderabad v. K.V. Rao 1973 Crl. L.J. 1351 while dealing with the aspect whether the learned Judge acts as a 'civil court' or 'criminal court' while making ad interim order of attachment, it was held at para-16 as hereunder:
Adverting to the next submission made by the learned Counsel for the respondent, I do not think that there is any short-circuiting of the procedure prescribed under Section 4(2) of the Ordinance in this case. It is no doubt true that the respondent can show cause why the ad interim attachment order should not be made absolute. But that dose not mean that he is entitled to ask the Court to go into the question that he has not committed the scheduled offence or that he has not procured that main or other property by illegal means. That is the matter which has to be investigated in the Court of Special Judge, which has already taken cognizance of the offence under Section 5z r/w. 5(1)(e) of the Prevention of Corruption Act, which is now pending as C.C. 6 of 1971. When a special court has been constituted and power has been constituted and power has been conferred upon that Court under Criminal Law Amendment Act, 1952 and Prevention of Corruption Act, 1947, to go into this question, the same enquiry cannot be conducted by the District Court in an objection to the ad interim attachment. The objections if any, in my opinion, are only confined to the provisions made in Sections 8 and 9 of the Ordinance i.e., either accepting security in view of the attachment or making incidental orders in the course of administration of the attached property. It is not the intention of the legislature according to me, that the truth or otherwise of the entire offence has to be investigated in any inquiry under Section 5 of this Ordinance. The respondent is not therefore in any way prejudiced by the stay of the proceedings pending inquiry in the criminal Court in C.C. 6 of 1971. There is no principle of natural justice that is offended in this case. It is certainly open to him to approach the District Court for incidental orders under Section 9 of the Ordinance which would protect or safeguard his interest pending enquiry into the Criminal case.
On the aspect of burden of proof, the learned Advocate General placed strong reliance on the decision of Patna High Court in Sonamati Devi v. State : AIR1958Pat508 wherein the learned Judge of Patna High Court observed:
The question is whether these documents are by themselves sufficient to establish their claim conclusively. The learned District Judge came to the conclusion that they had not means enough to enable them to purchase either the press or the land and the house standing thereon. The total cost of the press is Rs. 3061. Mahabir was employed as a mechanic in various places and his salary was from Rs. 20 to Rs. 80. The maximum salary that he drew was thus Rs. 80 only, and besides himself he had to support his wife.
There was no other sou rce of income so far as Mahabir was concerned and this circumstance greatly influenced the decision of the learned District Judge. Apparently, a man who all his life drew salary from Rs. 20 to Rs. 80 will hardly afford to purchase a press costing Rs. 3,000 and odd, especially when he had to maintain himself, besides his wife, for maintenance itself the salary that he drew was not adequate. Mahabir and Ragho formed members of joint Hindu family.
There was an allegation that both of them were separate, but this was not established, and no attempt has been made before me to prove separation between the two. Having regard to the known source of income of Mahabir, it cannot be reasonably urged that he could afford to purchase a press costing Rs. 3,000 and odd. The learned District Judge gave die weight to this circumstance and came to the conclusion that this property belonged to th ejoint family of which he and Ragho were members.
Similarly, with regard to Sonamati he held that she was not possessed of sufficient means for purchasing the land and house standing thereon. The price of the land and the house standing thereon comes to Rs. 11,000. Her case was that she obtained this amount from her husband and her father. Evidence was given of her father also who supported her. This evidence was rejected by the learned District Judge, because neither her father nor her husband was in a position to contribute Rs.11,000 for the purchase of the land and the house.
Her father possessed only about 6 bighas of land, and with this small landed property he could have ill-afforded to give any sufficient contribution to his daughter. As regards Mahabir, I have already shown that his income was very small, not even sufficient for proper maintenance of himself and his wife, and thus he was not in a position to give any aid to his wife in making this purchase. These two considerations are, in my opinion, weighty and sufficient to displace the prima facie inference that may be drawn from the documents which show that they are the ostensible owners.
There is no reason why effect to this circumstance should not be given. Learned Counsel for the appellants contended that so fat as the State was concerned no evidence was adduced in rebuttal of the evidence led on behalf of the appellants, and in that event the mere production of the tile deeds was sufficient to establish their claim. I do not think that this is sufficient. After the affidavit sworn to in this case, there is no prima facie inference, on the strength of which the learned District Judgeeffected the attachment, and under the Act it was for the claimants to establish what interest they had in the property attached.
Sub-sections (3) and (4) of Section 4 of the Ordinance aforesaid provide for lodging claim on the ground that the claimant has an interest in the property attached or portion thereof. Sub-section (2) of Section 5 provides, inter alia, that 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. The entire scheme of the Ordinance shows that evidence has to be adduced by the claimant in support of his case that he has interest in the property attached and when that evidence has been adduced, it is for the Court to consider whether that evidence was sufficient to establish his claim, independent of the question whether any evidence in rebuttal had been adduced by the State.
If that evidence by itself is not sufficient to establish the claim laid by the claimant, the claim must fall, notwithstanding the fact that no evidence to the contrary had been led on behalf of the State. Therefore, which or not there was any evidence on behalf of the State, the question has to be determined whether on the evidence adduced by the claimant his claim is sustainable. If the evidence falls short of that standard, then the claim must be disallowed, irrespective of the question that no evidence to the contrary has been adduced by the State.
10. The Counsel representing the respective parties, Sri B. Adinarayana Rao representing the appellants/claimants and the learned Advocate General Sri C.V. Mohan Reddy, representing the State, made elaborate submissions relating to several aspects though the principal contention advanced was in relation to burden of proof and also the Counsel had pointed out the difference of the language employed in Section 3 and Section 6 of Ordinance in particular. Certain submissions also had been made that these applications to be taken as pre-mature applications. In the light of the nature of the order made by the learned Judge the principal aspects which weighed with the learned Judge in declining to raise the attachment was that the vendors relating to these transactions are closely related to Venkateswar Rao, accused of the scheduled offences, and no oral evidence as such had been adduced and in the absence of any evidence the mere production of title deeds may not be sufficient and inasmuch as these are during the scam period, it would not be just and properto raise attachment.
11. It is no doubt true that when the claimants approached the Court with a positive case, instead of relying upon the simple averments made and the documents produced, it would be always just and proper to adduce necessary evidence to establish the nature of the transactions. It is also true that by virtue of investigation, the State would be having some material but it cannot be expected on the part of the State to have some more material which may be within the exclusive knowledge of these third party claimants or the vendors of such claimants as the case may be and hence the State cannot be expected to adduce negative evidence and the claimants are expected to produce the positive evidence. Incidentally, the question whether the learned Pistrict Judge has jurisdiction at all to make such an order in the light of the language of the provisions also may have to be gone into. In the light of the elaborate order made by the learned Judge and the specific observations made by him repeatedly relating to the non-adducing of any oral evidence whatsoever and failure to discharge the burden, taking the over all facts and circumstances into consideration and also the language of Sections 3 and 6 of the Ordinance in particular, this Court is satisfied that it would be just and proper to give an opportunity to the appellants/claimants to adduce necessary oral evidence and also the further other documentary evidence if any available. This does not mean that the State is precluded from placing further material to substantiate its stand in this regard.
12. In the light of the same, the impugned Common Order made is hereby set aside and the matters are remitted to the learned Chief Judge, City Civil Court, Hyderabad to give opportunity to the appellants as well, the State, the contesting respondents to adduce further evidence in relation to all the aspects which had been canvassed before this Court and the learned Judge to pass appropriate orders in this regard at the earlist point of time. The Civil Miscellaneous Appeals are accordingly allowed to the extent indicated. Since the matters are being remitted in the light of the findings or observations recorded by the learned Judge, the parties to bear their own costs.