Central Bank of India Vs. State of Goa and ors. - Court Judgment

Excerpt:
- code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under section 44 of the code, that power is vested in the court of the magistrate when an offence is committed in his presence. if the legislature has taken care of providing such specific power under section 44 of the code, then there could be no reason for such a power not to be specified under the provisions of chapter xii of the code. in terms of section 41, a police officer may arrest a person without a warrant or order from the magistrate for any or all of the conditions specified in that provision. language of this provision clearly suggested that the police officer can arrest a person without an order from the magistrate. thus, there appears to be no reason why on the strength of section 156(3) of the code, any restriction should be read into the power specifically granted by the legislature to the police officer. of course, freedom of investigation is the essence of these provisions but in order to suppress the mischief it is sufficiently indicated under different provisions of the code that the arresting officer should exercise his power or discretion judiciously and should be free of motive. some kind of inbuilt safeguard is available to the accused in the cases where the magistrate directs investigation under section 156 (3) of the code by taking recourse to the provisions of section 438 of the code by approaching the court of session or the high court for such relief. thus, during the course of investigation of a criminal case, an accused is not remediless and that would further buttress the above view. [jagannath singh v dr. ajay upadyay & anr 2006 cri lj 4274; 2006 (5) air bom r held per incuriam]. - 1, 2 and 3 as well as the union of india, seeking to restrain them from selling the movables belonging to respondent no. 3. it was further contended that their claim being a secured claim, the government's claim towards sales tax arrears does not get precedence over the claim of the appellant and as such the attachment was bad in law and not binding on the appellant. this much has been also observed by the learned district judge in his judgment wherein he has referred to the fact that the plaintiff's right to the said goods being secured, the plaintiffs would be entitled to the sale money first and if their claim was satisfied only then the government would be entitled to the balance left. therefore the government was well within its limits and within the framework of the law in attaching the articles belonging to respondent no. in the circumstances it is thus to be seen that the attachment of the hypothecated goods is not going to affect any accrued right of the appellant to get their claims satisfied in preference to the dues recoverable by the government from respondent no. 7. in the result this appeal is bound to fail and is hereby dismissed with costs.e.s. da silva, j.1. this appeal is directed against the judgment of the learned addl. district judge, south goa, margao, dated 22nd june, 1989 in civil suit no. 15 of 1982, filed by the appellant against the respondents and union of india who was defendant no. 1 in the said suit, whereby the learned judge has dismissed the suit with costs. the appellant had filed the suit for permanent injunction against respondents no. 1, 2 and 3 as well as the union of india, seeking to restrain them from selling the movables belonging to respondent no. 3 which had been attached by the remaining respondents. it was the appellant's case that the respondent no. 3 had obtained a loan from them to the tune of rs. 1.71 crores as on 31-3-1982 by giving security of its entire assets by way of mortgage of immovable properties and hypothecation of these properties. the respondent no. 3 had also hypothecated goods manufactured or in transit in its units. however, the respondent no. 2 has attached some of these goods for recovery of sales tax dues by the respondent no. 3 as mentioned in the plaint under the sales tax act and the sale by auction of these goods was fixed on 6-7-1982. it was further stated that the appellant had filed objections before the said respondent no. 2 and the hearing was fixed on 5-7-1982. according to the appellant the movables which had been attached were covered by advance of rs. 6 lakhs and necessary charge has been registered in respect of the same under the companies act, 1956. the movables attached were also covered by hypothecation agreement between the appellant and respondent no. 3. it was further contended that their claim being a secured claim, the government's claim towards sales tax arrears does not get precedence over the claim of the appellant and as such the attachment was bad in law and not binding on the appellant. hence they prayed for injunction to the restrain the respondent no. 1 and 2 from selling the attached movables in auction.2. the respondents resisted the suit by claiming that the attached goods were not covered under the agreement of hypothecation dated 30-7-1975 and that it was for the appellant to prove that their claim was secured. it was also contended that the same could be determined by the mamlatdar as required under section 159 of the land revenue code (hereinafter called the code) in respect of the objections filed by the appellant. therefore, according to the respondent the suit was premature since it could not be instituted without awaiting the order of the said inquiry under section 159 of the code which was going on consequent upon the objections raised by the appellant. it was thus contended that the court could not therefore restrain the proceedings or the inquiry being conducted by the respondent no. 2.3. the learned judge after framing the issues, recorded evidence and on the basis of the evidence recorded of the appellant only dismissed the same by judgment which is under challenge.4. shri thali, learned counsel appearing for the appellant, has submitted that the impugned judgment of the learned district judge is wrong and illegal because once the goods were hypothecated by the respondent no. 3 in their favour to secure the loan taken by the said respondent, it was not open for the government to attach the said goods which had a preference over any claim of the government for the satisfaction of their dues. the learned counsel further urged that therefore the appellant should be free to directly attach or sell those goods in order to recover the loan amount and in the circumstances the government should be restrained from acting upon the attachment done in respect of those movables which were secured in their favour by the hypothecation agreement. as such it was only proper that an injunction should be issued against the government not to sell the goods attached so as to enable the appellant to directly attach the said goods and obtain the repayment of their dues by sale and auction of the said goods.5. shri bharne, learned addl. government advocate, has taken exception of the attempts made by the learned appellant's counsel to obtain an injunction against the government from selling the goods attached by them in exercise of their right to recover the arrears of the sales tax dues by the respondent no. 3 to the government. the learned counsel has invited my attention to the scheme of the code which in chapter x speaks about the realisation of the land revenue and other public demands by the government. the learned counsel has first relied on section 15(a) of the sales tax act which empowers the government to recover dues under the code. he also relied on section 123 of the code which provides for the modes of recovery of arrears which under its clause (b) enables the government to recover dues by distraint and sale of the defaulter's movable property under section 125. on the other hand, it was contended by the learned government counsel that in terms of section 120(2) of the code the claim of the government to any moneys other than arrears of land revenue, but recoverable as a revenue demand under the provisions of chapter x, should have priority over all unsecured claims against any land or holder thereof. it was then urged that being so, the attachment done by the government of the movables purportedly hypothecated by respondent no. 2 to the appellant would not by any means cause any prejudice or difficulty for the appellant to recover their dues in preference to the dues of the government. shri bharne has pointed out that there was no law which restrains the government from attaching hypothecated goods and being so the appellant would not have any cause to file a suit against the government to restrain them from selling the goods for the recovery of their claim. 6. in my view the submissions of the learned government advocate are correct and deserve acceptance. admittedly the attachment of the movables hypothecated by respondent no. 3 to the appellant was done by respondent no. 2 to recover arrears of sales tax due to the government by the said respondent no. 3. section 15(a) of the sales tax act enables the government to recover such arrears as arrears under the land revenue code. being so, the government was fully entitled to seek for the recovery of those arrears of sales tax as arrears under the code and for that purpose to attach the goods belonging to respondent no. 3 although the same were hypothecated by the said respondent to the appellant. as rightly mentioned by shri bharne there is no law which prohibits such attachment. this being the position, i see no merit in the contention of shri thali that the attachment by itself becomes illegal only because the goods were hypothecated to the appellant. the legal position in this respect is quite clear and section 120(2) of the code unmistakably acknowledges the right of preference of the secured claims of third parties with regard to the claims of government. this much has been also observed by the learned district judge in his judgment wherein he has referred to the fact that the plaintiff's right to the said goods being secured, the plaintiffs would be entitled to the sale money first and if their claim was satisfied only then the government would be entitled to the balance left. therefore the government was well within its limits and within the framework of the law in attaching the articles belonging to respondent no. 3 even though they were hypothecated to the appellant. in the circumstances it is thus to be seen that the attachment of the hypothecated goods is not going to affect any accrued right of the appellant to get their claims satisfied in preference to the dues recoverable by the government from respondent no. 3. this being the position i am compelled to hold that the attachment made by the government of the goods hypothecated by respondent no. 3 with the appellant is unassailable in the eye of law and therefore no suit would lie against the government for a permanent injunction to restrain them from selling those goods for the purpose of recovering the arrears of sales tax due by the respondent no. 3 to the government but always subject to the protection which the appellant can claim to get their dues paid first in preference to the dues of the government in any auction to be conducted by the respondent no. 2 consequent upon the impugned attachment.7. in the result this appeal is bound to fail and is hereby dismissed with costs. order accordingly.