The money received by the respondent could not be recovered as it was not part of the fraud and the property belonging to the respondent could not be attached under the Customs Act.

Ferdino I. Rebello, J.

1. This is an application by the Revenue praying that on the following question the learned Tribunal be directed to make a reference to this Court. We may gainfully reproduce the said question.

“Whether the CEGAT is correct in holding that the earnest money received before 15th June 1998 (date of passing of the adjudication order by AC/Drawback) by M/s Gems Nuts and Produce Exports Co. Pvt. Ltd. from M/s Utopian Financial Solution Pvt. Ltd. would not fall within the scope of Rule 4 (Customs Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 on the ground that “the liability of Bangard and his companies to repay the money of drawback that he has received arose only after the order of 15th June 1998 of the Assistant Commissioner”, the fact that such money was fraudulently obtained not having been disputed by the CEGAT.?

2. In order to answer the issue, a few facts will have to be noted. The respondent is an owner of a building. One Shri Nawal Kishore Bangard through his three firms fraudulently obtained drawback amounts. Shri Bangard from the money so received parted with the substantial part of the money in favour of a relative Smt. Vinita Lakhotia. Thereafter Smt. Vinita Lakhotia from the sum of Rs.3 crores received by her had paid an amount of Rs.90.93 lacs towards making payment of earnest money to the respondent herein for the purchase of office premises at 125, Free Press House, Nariman Point, Mumbai.

3. The applicant on coming to know of the fraudulent act of Shri Nawal Kishore Bangard initiated proceedings for recovery of the drawback amount fraudulently received. The Commissioner of Customs by his order dated 11th June 1998 was pleased to confirm the demand of drawback in terms of the order. In the order it was also noted that all proceeds and/or deposits against the properties surrendered amongst others by Smt. Vinita Lakhotia shall be appropriated and adjusted against the demand through prescribed procedure.

4. By an order of attachment dated 10th December 1998 in respect of the persons set out therein which did not include the respondent herein, it was ordered that they are prohibited and restrained until further orders from transferring or charging the property in any way and that all persons were prohibited from taking any benefit under such transfer or charge. This included the office at 125, Free Press House, Nariman Point, Mumbai. In the said order of attachment, the name of the owner was shown as the respondent herein along with M/s Ankit Constructions Pvt. Ltd. and M/s Utopian Financial Solution Pvt. Ltd. We may at this stage mention that the order of attachment was also passed against M/s Utopian Financial Solution Pvt. Ltd.

5. The respondent aggrieved by the said order filed a petition before this Court being Writ Petition No.2517 of 1998. The same came to be disposed of by an order dated 1st February 1999. A learned Division Judge of this Court was pleased to hold that there are disputed questions of fact. It further observed that section 128 of the Customs Act inter alia provides that any person aggrieved by a decision or order passed under the Act by an officer of customs lower in rank than the Commissioner of Customs may appeal to the Commissioner (Appeals). As in the case an appeal lay and as the respondent had an alternative efficacious remedy, the Court refused to entertain the writ petition.

6. The respondent along with M/s Ankit Constructions Pvt. Ltd. And Kishore Jagjivandas Tanns preferred a Petition for Special Leave to Appeal before the Supreme Court. Leave was granted and Civil Appeal No.4728 of 1999 came to be filed which was disposed of by an order dated 24th August 1999. By that order, the respondent no.1 and M/s Ankit Constructions Pvt. Ltd. were directed to deposit an amount of Rs.90.93 lacs within 6 weeks from that date and on such deposit, the attachment levied on the premises which was a subject matter of the present ap