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Gorelal Gupta and ors. Vs. State of Madhya Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtMadhya Pradesh High Court
Decided On
Judge
Reported in1984CriLJ975
AppellantGorelal Gupta and ors.
RespondentState of Madhya Pradesh and ors.
Cases ReferredMohindersingh v. Chief Election Commr.
Excerpt:
- indian penal code, 1890.section 306 :[dalveer bhandari & harjit singh bedi,jj] abetment of suicide deceased, a married woman, committed suicide - allegation of abetment of suicide against appellant husband and in-laws - ocular evidence was sketchy - dying declaration recorded by tahsildar completely exonerated all accused in-laws of any misconduct dispelling any suspicion as to their involvement - letter of threat allegedly written by appellant to father of victim was concocted piece of evidence held, though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. - section 15 gives 3 months' time from the date of knowledge of attachment to make.....orderc.p. sen, j.1. under article 226 of the constitution the petitioners are seeking a writ of certiorari for quashing the order of the district magistrate. chhatarpur, dated 7-12-1981 attaching the properties of the petitioners under section 14 of m.p. dakaiti aur vyapaharan pra-bhavit kshetra adhiniyam, 1981, (hereinafter referred to as the adhiniyam).2. petitioner no. 1 gorelal is the husband of petitioner no. 2 mannubai and father of petitioners nos. 3 and 4 laxmiprasad and deviprasad. they constitute a joint hindu family and residing in house no. 25 on gandhi road, chhatarpur. they own gupta lodge and new gupta lodge near bus-stand, chhatarpur. they also own some agricultural land. gupta lodge is run in partnership between petitioners 1 and 3 while new gupta lodge is in partnership.....
Judgment:
ORDER

C.P. Sen, J.

1. Under Article 226 of the Constitution the petitioners are seeking a writ of certiorari for quashing the order of the District Magistrate. Chhatarpur, dated 7-12-1981 attaching the properties of the petitioners under Section 14 of M.P. Dakaiti Aur Vyapaharan Pra-bhavit Kshetra Adhiniyam, 1981, (hereinafter referred to as the Adhiniyam).

2. Petitioner No. 1 Gorelal is the husband of petitioner No. 2 Mannubai and father of petitioners Nos. 3 and 4 Laxmiprasad and Deviprasad. They constitute a joint Hindu family and residing in house No. 25 on Gandhi Road, Chhatarpur. They own Gupta Lodge and New Gupta Lodge near bus-stand, Chhatarpur. They also own some agricultural land. Gupta Lodge is run in partnership between petitioners 1 and 3 while New Gupta Lodge is in partnership between petitioners 2 and 4. The petitioners 1 and 2 settled down at Chhatarpur in the year 1948-49 and they had a modest beginning by running a grocery shop in the year 1951 and then they started a sweetmeat shop known as Gupta Mishthan Bhandar. They were also taking forest contracts in partnership with others. In 1964 a plot was purchased on the motor-stand and Gupta Lodge was constructed in the year 1965. The adjacent plot was purchased in 1965 and they constructed New Gupta Lodge later on. In the year 1970 the petitioners purchased one house on Gandhi Road, Chhatarpur and then constructed their present residential house thereon. The M.P. Dakaiti Pra-bhavit Kshetra Adhyadesh, 1981. was promulgated on 20-4-1981 specifying certain offences in the dacoity infested areas of the Stato, providing for more stringent punishment and speedy trial and making provision for attachment and confiscation of properties acquired through the commission of specified offences. In exercise of the power conferred by Section 22(1) of the Adhyadesh, the State Government framed rules called M.P. Dakaiti Prabhavit Kshetra Niyam, 1981, brought into force from 20-8-1981. The Adhyadesh was amended by amending ordinance No. 11 of 1982 which came into force on 27-8-1982. The Adhyadesh was replaced by the present Adhiniyam which came into force on 7-10-1981. The definition of specified offences was enlarged to include cases of kidnapping also. The Adhiniyam was also amended by amending Act No. 29/82 which came into force on 29-10-1982. It appears that the District Magistrate received certain reports and forwarded the same to the Sub-Divisional Magistrate for enquiry. The police recorded statements of petitioners l and 3 i.e. Gorelal and Laxmiprasad on 6-12-1981. He then passed the impugned order that the petitioners own Gupta Lodge and New Gupta Lodge in bus-stand and house No. 25 at Gandhi Road, Chhatarpur, but they were unable to account for the same satisfactorily and, therefore, these properties have been attached under Section 13(1) of the Adhiniyam. In the order-sheet of the same date he recorded that prior to 1965 the petitioners were living in a rented house and were in ordinary circumstances but they are in affluence after 1965. They have acquired valuable properties within the last 25 years, the acquisition of which have not been satisfactorily explained. In pursuance thereof, the Tahsildar attached the properties on the same day but the petitioners were permitted to reside in the portion of house No. 25 in their occupation on execution (of) a supratnama and the management of the two lodges were given to the Municipal Council, Chhatarpur. The petitioners moved an application on 8-12-1981 for release of the two lodges on their supratnama for management till completion of the enquiry which was rejected on 4-1-1982. The petitioners made a representation against attachment on 27-1-1982 explaining how these properties were acquired and submitting that their business is being regularly assessed to sales-tax and income-tax purposes and regular accounts are ' being maintained. The petitioners then filed the present petition on 2-3-1982. Return was filed on 8-4-1982 by the respondents and rejoinder on 12-4-1982. However, by order dated 27-4-1982 the petitioners were permitted to manage the two lodges on their executing supratnamas during pendency of the petition. The lodges are being managed by the petitioners. By further order dated 3-6-1982 the District Magistrate opined that he was under the impression that reasons were not to be given as the rules framed under the Adhyadesh lapsed after the enactment of the Adhiniyam but on reconsideration it appeared that the same rules continued under the Adhiniyam in the absence of fresh rules being framed and so he is disclosing the reasons for attachment of the properties of the petitioners because the same were acquired out of the funds supplied by dacoit Muratsingh and his son Ramsingh.

3. The petitioners' case is that they are permanent residents of Chhatarpur doing business there and owning buildings and agricultural lands. They started a Kirana shop in the year 1951 and thereafter a sweetmeat shop known as Gupta Mishthan Bhandar. They also started doing business in forest contracts in partnership with others. Out of the income from their business, they acquired a plot in the year 1964 for Rs. 3,000/-and constructed Gupta Lodge in the year 1965 on an investment of Rs. 27,000. The Lodge was opened by the ex-President of the Municipal Council. Further they acquired adjacent plot in the year 1965 for Rs. 7,000/- and then constructed New Gupta Lodge by investing Rupees 46,955/-. Further improvements have been made in these properties, in the year 1970 they purchased a house at Gandhi Road for Rs. 20,000/- and thereon they constructed their residential house No. 25. They have been maintaining regular accounts and the same were scrutinised from time to time by the sales-tax, income-tax and weaith-tax authorities. They have been paying taxes regularly amounting to thousands of rupees. They have taken necessary licences for running the two lodges. In these two lodges tourists from India and abroad come and stay. The petitioners are not at all connected with any activities relating to the specified offences as defined in the Adhiniyam, They have no connection with any dacoit nor they are in any way involved in any case of dacoity or kidnapping. Before passing the impugned order, the District Magistrate did not ask the petitioners to produce their accounts and documents to explain acquisition of these properties nor any notice was given to them. Without any application of mind, the District Magistrate has passed the order attaching the properties. The petitioners were arrested under Section 12 of the Adhiniyam but they were granted bail by Special Judge on 6th and 8th of December 1981 as he found that there is no prima facie case to connect the petitioners with any specified offences. Their representation is not being decided.

4. In their return, the respondents contended that the petitioners owned no property worth the name. Earlier the family was living in a rental house and running a grocery and sweetmeat shop with investment totalling Rs. 7,000/- to 8,000/-. The family did not pay income-tax till the year 1967-68. The valuation given by the petitioners and that determined by the income-tax authorities leave a large gap which has not been explained. The Executive Engineer has calculated the present valuation of these properties at rupees five lacs while the petitioners have given an explanation to the extent of Rs. 2 1/2 lacs only. There is a common talk in the town of Chhatarpur that the famous dacoit Muratsingh had very thick relations with the petitioners and even after his death his son Ramsingh is maintaining the same relations with the petitioners. These lodges were constructed by the amounts invested by Muratsingh and his son Ramsingh though they are standing in the name of the petitioners. A report was received from the Town Inspector that dacoits are being given shelter in these two lodges. Statements of Laxmiprasad and Gorelal were recorded by the police. On the basis of the report and statements recorded, the District Magistrate came to the conclusion that the petitioners were unable to explain how they have acquired these properties and so the same have been attached. The rules framed under the Adhyadesh did not survive after the Adhiniyam came into force. It is not necessary that the declaration of the District Magistrate under Section 13(1) has to be in a particular form, The petitioners have filed their representation and also submitted their account-books which are being examined by the District Magistrate. There is no delay and the final orders will be passed in a month or so.

5. The petitioners in their rejoinder contended that the District Magistrate has acted on rumours and imaginary tales. The petitioner No. 1 has been paying income-tax from 1962 and thereafter the firms have also been assessed to income-tax. The valuation of Rs. 39,500/-for Gupta Lodge given by the petitioners has been accepted by the income-tax authorities while the valuation of Rs. 71, 600/- for New Gupta Lodge is under dispute, since the Income-tax Officer has assessed the same at Rs. 1,03,586/-but that valuation has been accepted by the Wealth-tax Officer. Their residential house has been valued at Rs. 1,21,200/-and the same has not been disputed by the income-tax authorities. The valuation of the Executive Engineer is inflated in order to support the order of the District Magistrate. The petitioners had no connection with dacoit Murat Singh and his son Ramsingh. It is denied that they have been giving shelter and help to these dacoits. It is false that these two lodges have been constructed out of the money given by Muratsingh and Ramsingh. Ramsingh is a municipal councillor and owns a big house in Ward No. 20, Chhatarpur, while Muratsingh also owned a house in that ward. Since they had their own living houses at Chhatarpur, there was no question of their taking shelter in these two lodges. A false report was given by the Town Inspector for ulterior purposes. On 25-7-1980 in room No. 15 of Gupta Lodge a police Sub-Inspector committed rape on a woman. A report of the incident was lodged by the employees which led to public agitation. There was an agitation and then police firing, thereupon the State Government ordered a judicial enquiry by the District Judge. The entire police force at Chhatarpur are trying to shelter the Sub-Inspector and they are annoyed with the petitioners and their employees. The report is an act of vengeance and to cover up the mischief of the Sub-Inspector. The properties of the petitioners were valued by the registered valuers which have been accepted by the concerned authorities, Before the impugned order was passed, statements of Laxmiprasad and Gorelal were recorded and they did explain these acquisitions but their explanations were not considered. The District Magistrate can only act under Section 13(1) if he has reasons to think that these acquisitions were through commission of the specified offences. Although the petitioners have submitted their representation, account-books and documents, the District Magistrate is sleeping over the matter. Since these properties were acquired much before the enactment of the present Adhiniyam, these properties cannot come within mischief of the Adhiniyam even assuming that the same were acquired out of the sums advanced by dacoit Muratsingh and his son Ramsingh.

6. In their additional return, the respondents further contended that some of the offences mentioned in the schedule of the Adhiniyam are not new offences. They were already in the Penal Code. Section 14 simply creates disabilities and does not create any new punishment. It is clear that the intention of the Legislature is to invoke Section 14 in respect of past acquisitions also if they were acquired by committing dacoity or kidnapping. The attachment by the District Magistrate is only provisional subject to decision by the Special Judge who has the ultimate authority to confiscate the properties if he comes to the conclusion that the same were acquired through commission of the specified offences. There was material on record before the District Magistrate for subjective satisfaction i.e. before passing the order under Section 14. The District Magistrate had examined and considered not only the reports of the police but also considered the statements of the witnesses, the income disclosed by the petitioners and the value of these properties.

7. Shri Y.S. Dharmadhikaree learned Counsel for the petitioners contended (i) Section 14 of the Adhiniyam confers unrestricted and arbitrary powers without any guidelines to the District Magistrate and is void. It is ultra vires of Articles 14 and 19(1)(g) of the Constitution inasmuch as it denies equal protection of law and puts an unreasonable restriction to carry on the business of running lodges. The jurisdiction of civil court is barred under Section 19, If the District Magistrate so chooses he can attach any property under Section 14 if the owner is unable to satisfactorily account for the same, (ii) The provisions of the Adhiniyam are applicable to the specified offences committed after the Adhiniyam came in force in respect of the areas declared to be dacoity and kidnapping affected area. One of the offences specified in the schedule as a specified offence is under cluse (viii) i.e. receiving benefits from the persons committing all or any of the above-mentioned offences. This being a new offence, the mischief arising from it can only arise after the Adhiniyam came into force. Admittedly, in the present case, the properties acquired by the petitioners were much before the Adhiniyam came into force and, as such, the same are outside the purview of the Adhiniyam. Besides, under Section 16(3) properties are liable to be confiscated if the same were acquired in the commission of the specified offences. There is nothing to show that the petitioners have acquired these properties in committing specified offences. The words 'in commission of' have been replaced by words 'through commission of' by the amendment of the Ordinance effected on 27-8-1982 and by amendment of the Adhiniyam on 29-10-1982 i.e. much after the impugned order was passed. (iii) The impugned order is non est. Since it is a penal enactment providing for more stringent punishment and also confiscation of property it has to be construed strictly. It was mandatory for the District Magistrate as required under the rules to give reasons for the attachment. No reasons were disclosed before attaching the properties. The reasons could not be supplied later on. This shows that the impugned order was passed without application of mind. It was not mentioned in the order that the properties were acquired through the commission of specified offences. The reasons subsequently supplied are based on surmises and conjectures without any material on record for attaching the properties under Section 14. In reply, Shri R.K. Verma, Dy. Advocate-General, for the respondents submitted that Section 14 of the Act does not interfere with the right of a person to carry on business in a lawful manner but if the business is used for making money either by harbouring dacoits or giving shelter to them, reasonable restrictions can be placed to curb the mischief. There is no unrestricted or arbitrary power given to the District Magistrate to pass an order of attachment. He has to work within the framework of the Adhiniyam and the rules where proper guidelines have been given. The District Magistrate has only been empowered to pass an order of attachment which is subject to confirmation by the Special Judge who alone has the power to confiscate property. Section 14 is designed to protect the public in general against acts of harmful characters particularly dacoits and so the property already acquired through dacoity and kidnapping come within the mischief of the Adhiniyam. Section 14 is not penal and is made to curb the activities of the dacoits and their associates. If the holder of a property can satisfactorily account for the same he has no reason to fear. If the District Magistrate has reasons to think that any person owns property in the dacoity and kidnapping affected area for which he cannot satisfactorily account for, he can attach the property, though section does not provide for giving reasons before attaching the property and the rule in this regard is merely directory. However, reasons have been disclosed in the present case subsequently. The District Magistrate after making necessary enquiry and on consideration of the material on record has passed the impugned order and the representations of the petitioners is under consideration. If he does not accept the representation he would refer the matter to the Special Judge who would pass the final order.

8. Before considering these questions, it is necessary to consider the relevant provisions of the Adhiniyam. Under Section 2(f) 'specified offence' means-

(i) an offence specified in the schedule committed in relation to an area declared under Section 3 being an offence forming part or arising out of/or connected with the commission of dacoity or kidnapping;

(ii) an offence for which punishment has been provided under Secs 9, 11 and 12 of this Act.

Section 13(1) is as under:

If the District Magistrate has reason to think that person living in a dacoity and kidnapping affected area holds property in that area or elsewhere or if a person living outside dacoity and kidnapping affected area holds property in the dacoity and kidnapping affected area, for which he cannot satisfactorily account for, he may make a declaration to that effect and order attachment of the said property.

Section 15 gives 3 months' time from the date of knowledge of attachment to make representation to the District Magistrate and if he is satisfied with the representation he may forthwith release the property. Section 16(1) is as under;-If the District Magistrate is not satisfied with the representation made under Sub-section (1) of Section 15, he shall send the matter with his report to the special Court having jurisdiction for deciding whether or not the property or part thereof was or was not acquired through the commission of a specified offence. Under Section 16(3) the burden of proof that the property or part thereof mentioned in the representation was not acquired in the commission of a specified offence shall be on the person claiming the property. It may be mentioned that in Sub-section (1) the words used are 'through the commission of a specified offence' while in Sub-section (3) the words used are 'in the commission of a specified offence.' Clearly the word 'in' in place of 'through' has been wrongly used and its same has been corrected by the Amending Act No. 29/80. Therefore, any property acquired through the commission of any specified offence is liable to attachment and confiscation. It was never the requirement that the property acquired in the commission of a specified offence alone come within the mischief of the Adhiniyam. The subsequence amendment only clarified the mistake which was apparent in Sub-section (3).

9. It is to be considered whether provisions of the Adhiniyam are discriminatory and hit by Article 14 of the Constitution. The object of the Adhiniyam is for curbing the menace of organised and unorganised gangs of dacoits effectively, it is essential to break the chain of vested interests assisting or associate with such gangs. The preamble says this is an Act to make provisions for specifying certain offences in the dacoity and kidnapping affected areas of Madhya Pradesh and in respect of punishment and speedy trial thereof in order to curb effectively the commission of such specified offences and to make provision for attachment of properties acquired through the commission of specified offences and for matters connected therewith or incidental thereto. So this is an enactment to curb the menace of dacoity and kidnapping in affected areas of the State in order to protect the public against organised gangs of dacoits. So it deals with special types of people i.e. dacoits and their associates in affected areas in respect of specified offences. It has come to be realised that to stop the menace of dacoity and kidnapping more stringent and speedy measures are necessary and that is why this special enactment. Differential treatment does not 'per se' constitute violation of Article 14 of the Constitution, it denies equal protection only when there is no reasonable basis for differentiation Ameerunnissa v. Mahboob Begum : [1953]4SCR404 . Where a statute providing for a more drastic procedure different from the ordinary procedure covers the whole field covered by the ordinary procedure without any guidelines as to the class of cases in which either is to be resorted to, the statute will be hit by Article 14. Even a provision of appeal will cure the defect. If guidelines can be inferred the statute will not be hit by Article 14. Then again where the statute itself covers only a class of cases, the statute will not be bad, M. Chaganlal v. Greater Bombay Municipality : [1975]1SCR1 , The classification provided for by the Special Courts Bill is valid and no objection can be taken. The preamble says that it is imperative for functioning of parliamentary democracy and the institutions created by or under the Constitution that commission of such offences during emergency should be judicially determined with utmost dispatch when committed by persons by misusing their high public or political office. Persons who are singled out by the bill for trial before the special courts possess common character and those who fall outside that group do not possess them In re: Special Courts Bill. 1978 AIR 1979 SC 478. Therefore, provisions of the Adhiniyam are not discriminatory and are not hit by Article 14.

10. It is further to be considered whether Section 14 of the Adhiniyam gives arbitrary and naked powers without any guidelines to the District Magistrate. Our answer is no, A legislation which does not contain any provision which is directly discriminatory may yet offend against the guarantee of equal protection if it confers upon executive an un-guided or uncontrolled discriminatory power in the matter of application of the law, State of West Bengal v. Anwar Ali : 1952CriLJ510 . Under this section the District Magistrate has been given power to attach any property if he has reason to think that the same has been acquired through the commission of a specified offence and the owner is unable to satisfactorily account for the same. The rules framed under the section required the District Magistrate to give reasons in his order of attachment which made him think that the property owns its source to commission of specified offence. Though the words 'acquired through the commission of specified offences' are missing from the section, their import are clearly established from the following sections and the rules framed. So the District Magistrate can only attach any property if he has reason to think (i) that it has been acquired through the commission of the specified offences, and (ii) the owner is unable to satisfactorily account for the same. It stipulates some sort of enquiry by the District Magistrate before passing of the order. Then Section 15 gives the right of representation to the owner against the order within 3 months of the date of knowledge of the attachment and if the District Magistrate is satisfied with the representation, then he has to release the property. If not so satisfied then under Section 16 he has to refer the matter to the Special Judge (a Judge of the Sessions Court) for deciding whether or not the property was acquired through commission of specified offence. The Special Court has been given powers of the civil court to decide the question though the burden is on the owner to rebut that it was not so acquired, which is not at all difficult for an owner to show if he had acquired the same by lawful means. Under Section 17 if the Special Judge is satisfied that it was acquired through commission of a specified offence, he shall confiscate the property and in any other case he shall release the property. Section 18 gives a right of appeal to the High Court by the owner, Section 19 bars jurisdiction of civil court in the matter. It is clear that the procedure laid down under the Adhiniyam are not so harsh or onerous as to suggest that a discrimination would result if attachment is made under Section 14. The powers of the District Magistrate are well defined and fully regulated. He has to act within the four corners of the Adhiniyam and the Rules. He cannot act arbitrarily or capriciously.

11. It is not in dispute that in this case the petitioners acquired the properties much before the Adhiniyam came to be enacted. It is to be seen whether acquisitions prior to the coming into force of adhiniyam can come within its mischief. The Supreme Court held possession of disproportionate pecuniary resources or property - mere possession made an offence under Section 5(e) of the Prevention of Corruption Act, 1947,- no evidence that the accused was in such possession after 18-12-1964 when Clause (e) came into existence - accused is entitled to protection under Article 20(1) of the Constitution, State of Maharashtra v. K.K.S. Kamaswamy : 1977CriLJ1740 . Penal statutes which create offences or which have the effect of increasing penalties for existing offences will only be prospective by reason of the Constitutional restriction imposed by Article 20 of the Constitution. There can be no quarrel with the decision of the Full Bench of this Court in Gulabchand v. State of M.P. 1982 MP LJ 7: 1982 Cri LJ 665 that specified offence means (i) an offence mentioned in the schedule committed in an affected area and (ii) the same must be forming part of or arising out of or connected with the commission of dacoity and kidnapping. But the Supreme Court in State of Bombay v. Vishnu Ramchandra : 1961CriLJ450 has held as under: -

Penal statutes which create new offences are always prospective. But penal -statutes which create disabilities or statutes which create no new punishment but authorise some action based on past conduct may be interpreted retrospectively when there is a dear intendment that they are to be applied to past events. Again, an Act designed to protect the public against acts of a harmful character may be construed retrospectively, if the language admit of such an interpretation, even though it may equally have a prospective meaning.

This means that in construing a remedial statute the Courts ought to give to it the widest operation which its language would permit. The Supreme Court while construing Section 5(3) of the Prevention of Corruption Act, 1947, in Sujjan Singh v. State of Punjab : 1964CriLJ310 has held as follows (para 14):-

Looking at the words of the section and giving them their plain and natural meaning it is impossible to say that pecuniary resources and property acquired before the date on which the Prevention of Corruption Act came into force should not be taken into account even if in possession of the accused or any other person on his behalf. To accept the contention that such pecuniary resources or property should not be taken into consideration one has to read into the section' the additional words 'if acquired after the date of this Act' after the words 'property'. For this there is no justification.

It may be mentioned that some of the specified offences are those already existing in the Penal Code and if some property has been acquired through commission of such penal offences in the affected areas now so declared, the same would come within the mischief of the Adhiniyam, though acquired prior to its enactment. This is clear from the language used in the Adhiniyam. Section 14 uses the words 'holds property' while Section 15 uses the words 'was or was not acquired' i.e. the property held when the Adhiniyam came and already acquired by commission of a specified offence. The preamble clears the matter by saying that whereas it is necessary to provide for attachment and confiscation of the properties which have been acquired through the commission of specified offences and are held in the name of relatives, associates or confidents of the dacoits. So it is not possible to read in the Adhiniyam that properties to be acquired after the coming of the Adhiniyam are alone to come within its purview. In that event it would have been recited that properties acquired hereinafter would come under its purview.

12. The District Magistrate can act under section (sic) of the Adhiniyam if he has reason to think that a person holds property in dacoity and kidnapping affected area, acquired through commission of a specified offence and for which the owner cannot statisfactorily account for. According to the Oxford Companion to Law (1980 Edition, page 1037) 'reason' means the intellectual faculty of being able to discriminate, judge and evaluate, to know truth and to adopt one's action to a particular end. It is the faculties of imagination, memory, instinct, emotions, sensations and will. It is distinguishable from faith in that reason finds truth by arguments and evidence which persuade and carry conviction, whereas faith relies on belief in authority, divine or human, and from sense-perception in that it arrives at knowledge by application of logic, not solely by appearances. According to Black's Law Dictionary (Vth Edition, page 1652) 'think' means to believe, to conclude, to esteem, to recollect, or call to mind. As per Strouds Law Dictionary (4th Edition, Vol. V at page 2763) the word ''think'' means forming an opinion in the exercise of a proper legal discretion. The Supreme Court in Barium Chemicals Ltd. v. Company Law Board : [1967]1SCR898 has held as under (para 63):-

The words 'reason to believe' or 'in the opinion of' do not always lead to the construction that the process of entertaining 'reason to believe' or 'the opinion' is an altogether subjective process not lending itself even to a limited scrutiny by the Court that such 'a reason to believe' or 'opinion' was not formed on relevant facts or within the limits or within the restraints of the statue as an alternative safeguard to rules of natural justice where the function is administrative.

Further in Ganga Saran & Sons v. I.T. Officer : [1981]130ITR1(SC) it has been held : Reopening of assessment under Section 13(a) of the Income-tax Act, 1961, Import of - reasons must have bearing on the matters with regard to which I.T.O. is required to entertain belief. Therefore, it is open to this Court to find out whether the District Magistrate had reason to think that the properties were acquired through commission of a specified offence on the basis of relevant facts or the order was within the restraints of the statute. If there is no rational and intelligible nexus between reasons and belief, no one properly instructed on facts and law could reasonably entertain the belief, the conclusions would be that the District Magistrate had no such reason to think.

13. Since seizure of property from the possession of an owner is deprivation of property Virendra v. State of U.P. : [1955]1SCR415 the District Magistrate while attaching property under Section 14 of the Adhiniyam has to strictly comply with the requirements of the statute. Form No. 1 has been prescribed by the Rules framed under the Adhyadesh, which are still in force, It requires the District Magistrate to give reasons which made him think that the property was acquired through the commission of a specified offence and the owner was unable to satisfactorily account for the same. The impugned order of the District Magistrate dated 7-12-1981 has not disclosed any reasons for the attachment except saying that the owners were unable to account for the same and he has also not recorded his satisfaction that the properties were acquired through commission of a specified offence. In the order-sheet of Criminal Case No. 3/1981 also no reasons are disclosed nor any satisfaction recorded that the properties were so acquired. So the order is non est and bad. The petitioners 1, 3 and 5 were arrested under Section 12 of the Adhiniyam and while granting bail to them the Special Judge in his order dated 8-2-1982 opined that they were arrested without there being reason of their having committed any specified offence or have any connection with any such offender, only material in the case diary being the order of attachment of the properties by the District Magistrate. From the return filed by the respondents, it appears that the District Magistrate acted on the undated report of the Town Inspector that there is rumour that the properties were acquired out of amount supplied by dacoit Murat Singh. It does not appear that the District Magistrate looked into the statements of petitioners 1 and 3 Gorelal and Laxmiprasad giving account of the properties acquired. If he had looked into them, he would have further probed into the matter by asking the petitioners to produce their account books and documents to find out the truth. Surprisingly, there is no report prior to this against the petitioners. A telegram of the Superintendent of Police dated 25-7-1980 was also annexed. This was in connection with the incident of rape said to have been committed by P.S.I. Baghel in the Lodge, there was agitation and police firing and the S.P. reported that the Lodge is run by a staunch harbourer of ex-dacoit Muratsingh and his son Ramsingh and they are supposed to be the owners of the Lodge, The District Magistrate could not have acted on mere rumours. It may be mentioned that the State Government instituted a judicial enquiry by a District Judge about the police firing.

14. After filing of the return, the District Magistrate passed further order on 3-6-1982 disclosing reasons for the attachment of properties on 7-12-81 that is the police have information that the petitioners have been harbouring and helping Muratsingh and his gang in committing specified offences and earning illegal money thereby. The Supreme Court in Mohindersingh v. Chief Election Commr. : [1978]2SCR272 has held as under (para 8):-

When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out.

Besides, in the additional return the respondents have produced two more reports dated 3-12-1981 and 4-6-1982 of the Superintendent of Police that these properties were acquired benami in the name of the petitioners by Muratsingh and his son Ramsingh who were taking shelter in these lodges. The District Magistrate after getting the representation of the petitioners, has recorded statements of Executive Engineer and Assistant Engineer about valuation of the properties. According to them, their present value is five lacs while the petitioners have given the costs of construction at 2 1/2 lacs and naturally the value of property has increased during all these years. He has also recorded statements of Town Inspector and the S.D.O. who have no personal knowledge in the matter. The petitioners in their representation dated 27-1-1982 have explained as to how they acquired these properties supported by documents and entries from account-book. They are regularly assessed by the Sales Tax and Income-tax authorities. In their return dated 3-4-1982 it was said that the District Magistrate will pass final order within a month or so but although about 2 years have passed, nothing has been done by the District Magistrate. We have no option but to hold the orders of attachment dated 7-12-1981 and 3-6-1982 are ultra vires and illegal.

15. With the result, the petition is allowed with costs and orders of attachment dated 7-12-1981 and 3-6-1982 are quashed and the attached properties released from attachment. Counsel's fee Rs. 250/- if certified.


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