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Bhoruka Steel Limited, By Its … vs Misc Limited on 17 June, 2002

Karnataka High Court
Bhoruka Steel Limited, By Its … vs Misc Limited on 17 June, 2002
Author: G Gowda
Bench: V G Gowda


ORDER

Gopala Gowda, J.

1. Under a contract, the respondent herein appears to have supplied imported scrap steel to the petitioner as per a scheme for making into rods, wires etc., for selling in open market and to pay the value of the scrap to the respondent. It is alleged that the petitioner has not accounted for the steel supplied from 22.9.1995 to 27.11.1995 in a total quantity of 39,99,220 metric tones and also not paid the value of the same. Hence, the respondent filed a petition under Sections 3 of the Criminal Law Amendment Ordinance, 1944 (hereinafter referred to as ‘the Ordinance’) seeking attachment of the properties of the petitioner. Accordingly, the Court passed attachment order. The petitioner filed I.A.V for dismissal of the petition filed by the respondent and for dissolution of the order attaching the properties. The Court by its order dated 7.9.1999 dismissed I.A.V and ordered continuance of interim attachment of properties. This revision petition is filed questioning the legality and correctness of the said order.

2. I have heard the learned Counsel for the parties and perused the order under challenge. While the learned Counsel for the respondent sought to justify the order, learned Counsel for the petitioner vehemently argued against the order and not only prayed for setting aside the order under revision but also prayed for dismissal of the petition filed by the respondent in the District Court.

3. In order to appreciate the contention of Mr.C.V. Nagesh, learned Counsel for the petitioner that Section 3 of the Ordinance has no application to the facts of the case and hence the attachment of property could not have been made, it is necessary to look into the relevant portion of the said provision and it reads thus:-

“3. Application for attachment of property:-

(1) Where the State Government has reason to believe that any person has committed whether after the commencement of Ordinance or not any scheduled offence, the State Government may, whether or not any Court has taken cognizance of the offence, authorise the making of an application to the District Judge within the local limits of whose jurisdiction the said person ordinarily resides or carries on his business, for the attachment under this Ordinance of the money or other property which the State Government believes the said person to have procured by means of the offence, or if such money or other property cannot for any reason be attached, of other property of the said person of value as nearly as may be equivalent to that of the aforesaid money or other property.”

“Scheduled Offence” is defined under Section 2(1) of the Ordinance to mean an offence specified in the Schedule to the Ordinance.

4. A perusal of the averments made in the petition filed under Section 3 of the Ordinance before the District Court makes clear that the allegation does not amount to an ‘offence’ muchless offences defined in the Schedule of the Ordinance. The words “money or other property which the State Government believes the said person to have procured by means of the offence” in Section 3 of the Ordinance makes clear that the property or money to be attached should have been procured by means of the offence. In the instant case, the properties attached are not procured by the petitioner by means of any one of the offences mentioned in the Schedule of the Ordinance. Consequently, as rightly contended by the learned Counsel for the petitioner, Section 3 of the Ordinance has no application to the facts of the case and the petition itself was not maintainable. It follows that the order under revision is without jurisdiction.

5. Since the main petition itself was not maintainable before the District Judge, the order attaching the property of the petitioner ought not to have been passed and confirmed by the District Court. The District Judge has not held that there is prima facie case against the petitioner for having committed the offence mentioned in the Schedule. In other words, no cognizance of the offence is taken. In fact, as already observed, there is no offence committed by the petitioner. In the absence of the same, the attachment order will not be in force beyond three months in view of Section 10(a) of the Ordinance. When the order of attachment lapsed by operation of law or efflux of the time, the question of confirming the same does not arise. Hence, the impugned order is bad in law.

6. The District Judge has not applied his mind as to whether the provisions of the Ordinance are applicable to the instant case or not. The order under revision is also vitiated for non-application of mind. Moreover, the properties attached are not proved to have been procured by the commission of scheduled offence. That being so, there cannot be any attachment of the properties not acquired or procured so.

7. The revision petition is allowed and the order under revision is set aside.

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