S. Maheswaran Vs. State - Court Judgment

Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. ordera. ramamurthi, j.1. the joint commissioner of central excise (legal) and the four accused in c.c. no. 352 of 1999 on the file of learned judicial magistrate ii, madurai have filed these two petitions under section 482 of the code of criminal procedure, to quash the proceedings pending against these four accused.2. the case in brief for the disposal of both the petitions in as follows:on 23-12-1998 on the basis of intelligence gathered and recorded, the four accused and other officers were directed by the senior officers to conduct raid on the factory premises of m/s. sri ram agencies, madurai and other connected premises thereto, which included the residential as well as business premises. during the said searches, number of documents and materials were also recovered. in the course of such searches, sri madan mohan mohanty, and d. thillairaj were also present in the respective places of search. m/s. sri ram agencies are the manufacturers of brass sheets and circles. they registered themselves under the central excise department only from august '98 onwards. hence, summon under section 14 of the central excise act, 1944 was issued to madan mohan mohanti for his appearance before the superintendent of central excise, anti-evasion, madurai on 6-1-1999 for him to participate in the investigation. he appeared before the officer accompanied by one ponnusamy, melting contractor of m/s. sri ram agencies, enquiries were made and sri madan mohan mohanty gave voluntary statement, which was written by a hindi translator of the department and partially written by him in his own hand in oriya. shri a. ponnusamy also gave a voluntary statement on the same day, which was written by an officer of the department, as deposed by him. 3. shri a. ponnusamy in order to intimidate the investigating officers of the excise department, has chosen to give a false complaint of wrongful restraint and causing hurt to shri madan mohan mohanty after obtaining a medical certificate regarding some alleged assault which came to be registered by the respondent police in crime no. 29 of 1999. this complaint is false and it has been filed with ulterior intention. they also caused a publication in the local press about the alleged assault. the department people also submitted a representation addressed to the commissioner of police and other officials. m/s. sri ram agencies is involved in a very serious offence of unauthorisedly manufacturing and clandestinely removing excisable goods without payment of excise duty which works out to rs. 18.48 lakhs. the prosecution has been launched in total disregard of the provisions of section 40 of the central excise act which calls for notice of one month either to the alleged offending officers or to the central government. the initiation of proceedings itself lacks jurisdiction and on this ground, the proceedings deserves to be quashed. hence, these two petitions.4. learned government advocate also stated that section 40 of the central excise act has not been adhered to and as such, there is force in the contention of the petitioners.5. heard the learned counsel for both sides.6. these two petitions are filed by joint commissioner of central excise (legal) and four accused in c.c. no. 352 of 1999 on the file of judicial magistrate court no. ii, madurai, for quashing the proceedings pending against the four accused, in view of section 40 of the central excises and salt act (hereinafter referred to as the act')- the official of the excise department searched the residence as well as the factory premises of m/s. sri ram agencies. subsequently, summons were also issued to madan mohan mohanty and he was also accompanied by shri a. ponnusamy, melting contractor of m/s. sri ram agencies. both of them gave voluntary statement and the same was also recorded. now shri ponnusamy has given a complaint of wrongful restraint and caused hurt to shri madan mohan mohanty after obtaining a medical certificate regarding the alleged assault and the same was registered by the respondent in crime no. 29 of 1999.7. learned counsel for the petitioners contended that it is a false complaint given by the said ponnusamy and the registration of the same is also not proper and correct. learned counsel relied upon section 40 of the said act and section 40(2) reads as follows :'no proceeding, other than a suit, shall be commenced against the central government or any officer of the central government or a state government for anything done or purported to have been done in pursuance of this act or any rule made thereunder, without giving the central government or such officer a month's previous notice in writing of the intended proceedings and of the cause thereof or after the expiration of three months from the accrual of such cause.' 8. it is admitted that before filing a complaint before the respondent, there is no record to show that they have sent a month's previous notice in writing of the intended proceedings. sub-clause (2) of section 40 is mandatory and this has not been taken into consideration by the respondent before registration of the case. unfortunately, after registration of the case, charge sheet has also been filed against the accused, who had discharged their official functions. in view of the bar under section 40(2) of the act, i am of the view that the proceedings itself lacks jurisdiction and on this ground itself, the proceedings is liable to be quashed.9. for the reasons mentioned above, both petitions are allowed and the proceedings in c.c. 352 of 1999 on the file of learned judicial magistrate ii, madurai is liable to be quashed and, accordingly, it is quashed . consequently, crl. m. ps. 5998 and 5999 of 1999 are closed.

Judgment:
ORDER

A. Ramamurthi, J.

1. The Joint Commissioner of Central Excise (Legal) and the four accused in C.C. No. 352 of 1999 on the file of learned Judicial Magistrate II, Madurai have filed these two petitions under Section 482 of the Code of Criminal Procedure, to quash the proceedings pending against these four accused.

2. The case in brief for the disposal of both the petitions in as follows:

On 23-12-1998 on the basis of intelligence gathered and recorded, the four accused and other officers were directed by the Senior Officers to conduct raid on the factory premises of M/s. Sri Ram Agencies, Madurai and other connected premises thereto, which included the residential as well as business premises. During the said searches, number of documents and materials were also recovered. In the course of such searches, Sri Madan Mohan Mohanty, and D. Thillairaj were also present in the respective places of search. M/s. Sri Ram Agencies are the manufacturers of brass sheets and circles. They registered themselves under the Central Excise Department only from August '98 onwards. Hence, summon under Section 14 of the Central Excise Act, 1944 was issued to Madan Mohan Mohanti for his appearance before the Superintendent of Central Excise, Anti-Evasion, Madurai on 6-1-1999 for him to participate in the investigation. He appeared before the officer accompanied by One Ponnusamy, Melting Contractor of M/s. Sri Ram Agencies, Enquiries were made and Sri Madan Mohan Mohanty gave voluntary statement, which was written by a Hindi Translator of the Department and partially written by him in his own hand in Oriya. Shri A. Ponnusamy also gave a voluntary statement on the same day, which was written by an officer of the department, as deposed by him.

3. Shri A. Ponnusamy in order to intimidate the investigating officers of the Excise Department, has chosen to give a false complaint of wrongful restraint and causing hurt to Shri Madan Mohan Mohanty after obtaining a medical certificate regarding some alleged assault which came to be registered by the respondent police in Crime No. 29 of 1999. This complaint is false and it has been filed with ulterior intention. They also caused a publication in the local Press about the alleged assault. The department people also submitted a representation addressed to the Commissioner of Police and other officials. M/s. Sri Ram Agencies is involved in a very serious offence of unauthorisedly manufacturing and clandestinely removing Excisable goods without payment of excise duty which works out to Rs. 18.48 lakhs. The prosecution has been launched in total disregard of the provisions of Section 40 of the Central Excise Act which calls for notice of one month either to the alleged offending officers or to the Central Government. The initiation of proceedings itself lacks jurisdiction and on this ground, the proceedings deserves to be quashed. Hence, these two petitions.

4. Learned Government Advocate also stated that Section 40 of the Central Excise Act has not been adhered to and as such, there is force in the contention of the petitioners.

5. Heard the learned Counsel for both sides.

6. These two petitions are filed by Joint Commissioner of Central Excise (Legal) and four accused in C.C. No. 352 of 1999 on the file of Judicial Magistrate Court No. II, Madurai, for quashing the proceedings pending against the four accused, in view of Section 40 of the Central Excises and Salt Act (Hereinafter referred to as The Act')- The official of the Excise department searched the residence as well as the factory premises of M/s. Sri Ram Agencies. Subsequently, summons were also issued to Madan Mohan Mohanty and he was also accompanied by Shri A. Ponnusamy, Melting Contractor of M/s. Sri Ram Agencies. Both of them gave voluntary statement and the same was also recorded. Now Shri Ponnusamy has given a complaint of wrongful restraint and caused hurt to Shri Madan Mohan Mohanty after obtaining a medical certificate regarding the alleged assault and the same was registered by the respondent in Crime No. 29 of 1999.

7. Learned Counsel for the petitioners contended that it is a false complaint given by the said Ponnusamy and the registration of the same is also not proper and correct. Learned Counsel relied upon Section 40 of the said Act and Section 40(2) reads as follows :

'No proceeding, other than a suit, shall be commenced against the Central Government or any officer of the Central Government or a State Government for anything done or purported to have been done in pursuance of this Act or any rule made thereunder, without giving the Central Government or such officer a month's previous notice in writing of the intended proceedings and of the cause thereof or after the expiration of three months from the accrual of such cause.'

8. It is admitted that before filing a complaint before the respondent, there is no record to show that they have sent a month's previous notice in writing of the intended proceedings. Sub-clause (2) of Section 40 is mandatory and this has not been taken into consideration by the respondent before registration of the case. Unfortunately, after registration of the case, charge sheet has also been filed against the accused, who had discharged their official functions. In view of the bar under Section 40(2) of the Act, I am of the view that the proceedings itself lacks jurisdiction and on this ground itself, the proceedings is liable to be quashed.

9. For the reasons mentioned above, both petitions are allowed and the proceedings in C.C. 352 of 1999 on the file of learned Judicial Magistrate II, Madurai is liable to be quashed and, accordingly, it is quashed . Consequently, Crl. M. Ps. 5998 and 5999 of 1999 are closed.