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2006 Supreme(Gau) 77
IN THE HIGH COURT OF GAUHATI
Aftab H. Saikia, J.
Rajendra Prasad Borah and Anr. - Appellants
Vs.
Central Bureau of Investigation and Anr. - Respondent
F.A.O. No. 16 of 1999
Decided On: 20.01.2006
Advocate Appeared:
For Appellant/Petitioner/Plaintiff: J.M. Choudhury and P. Kataki, Advs.
For Respondents/Defendant: B.D. Das and H.K. Sarma, Advs.
The main legal point established in the judgment is the significance of the rights of the mortgagee and the procedural requirements for varying an ad-interim attachment order under the Criminal Law Amendment Ordinance, 1944.
Headnote:
Attachment - Property Rights - Criminal Law Amendment Ordinance, 1944, Section 3, Section 4, Section 5 - The court discussed the application of the Criminal Law Amendment Ordinance, 1944, specifically focusing on Section 5(2) and Section 5(3)(a) and (b) in the context of ad-interim attachment order and the rights of the mortgagee. The court emphasized the rights of the mortgagee and the procedural requirements for varying an ad-interim attachment order, ultimately influencing the decision to vacate the attachment order in favor of the mortgagee.
Fact of the Case:
The case involved a challenge to an order passed in a criminal proceeding, where the Central Bureau of Investigation (CBI) sought attachment of a hotel owned by the appellants. The Assam Industrial Development Corporation (AIDC) objected to the attachment, citing their mortgage over the property and the outstanding loan owed by the appellants.
Finding of the Court:
The court found that the AIDC had acquired a right and interest over the mortgaged property, and therefore, the ad-interim attachment order was modified to allow AIDC to realize its outstanding dues by selling the property.
Issues: The issues revolved around the validity of the ad-interim attachment order, the rights of the mortgagee, and the procedural compliance required for varying the attachment order.
Ratio Decidendi: The court emphasized the rights of the mortgagee and the procedural requirements for varying an ad-interim attachment order, ultimately influencing the decision to vacate the attachment order in favor of the mortgagee.
Final Decision: The appeal was dismissed, and the impugned order vacating the attachment order in favor of the mortgagee was upheld.
Aftab H. Saikia, J.
1. Heard Mr. P. Kataki, teamed Counsel for the Appellants and Mr. B.D. Das, learned Counsel appearing on behalf of the Assam Industrial Development Corporation ('AIDC') on behalf of the Respondent No. 2.
2. This First Appeal from of Order witnesses a challenge to the order dated 9.4.1999 passed in Misc. Case No. 9 of 1996 arising out of Special Case No. 1(C)/96 by learned Special Judge, Assam, Guwahati wherein the interim attachment order dated 29.3.1996 passed in favour of the Respondent No. 1, Central Bureau of Investigation ('CBI') accepting the request made by them for attachment of the properties of the Appellants for their alleged involvement in unaccounted acquisition of properties through Veterinary Department to tile Government of Assam, was modified after entertaining an application filed on behalf of AIDC, a Govt. of Assam Undertaking with alms and objects, inter alia, to promote industrialisation in State of Assam by advancing loans to the entrepreneurs etc., to the extent that the order of ad-interim attachment passed on 29.3.1996 to attach the property of the hotel Chilarai Regency, Paltanbazar, stood vacated with a condition that if the sale proceed of the property was more than that of their claim then remaining amount would remain under ad interim attachment.
3. The facts, in a short compass, necessary and essential for proper resolution of this first appeal, may be recapitulated. The CBI initiated the instant Special Case No. 1(C)/96 against the Appellants with allegations that both the Appellants in the year 1991-92 amassed a huge amount of money to the tune of Rs. 66,90,495 by submitting false bills, sanction orders, work orders, etc., through the Veterinary Department, Government of Assam and invested the money in acquiring assets, as detailed in their petition, including the investment for the purpose of purchasing Hotel Chilarai Regency and during the pendency of the said criminal proceeding, CBI, seeking the attachment of the said hotel, approached the learned Special Judge, Assam by filing an application under Section 3 of the Criminal Law (Amendment) Ordinance, 1944 ('the Ordinance') which was registered as Misc. Case No. 9/96 and the learned court, on being satisfied, passed ad-interim attachment order on 29.3.1999 in favour of the CBI against the Appellants granting the relief as prayed for.
4. During the operation of the above ad-interim attachment order, AIDC has preferred an objection in terms of Section 4(4) of the Ordinance for modification of the ad-interim attachment order, stating, inter alia, that initially one M/s. G.K. Enterprise (P.) Ltd. was granted loan to the extent of Rs. 66 lakh for construction of the hotel in question in Guwahati by AIDC, being a Public Financial Institution, for which a loan agreement was executed between the above parties on 7.4.1985 creating an equitable mortgage of the immovable properties namely land, building etc. of the said hotel. In 1991-92, the share of M/s. G.K. Enterprise (P.) Ltd. were entirely transferred to the Appellants who became new directors of the said company vide resolution of the Board meeting on 1.2.1992 and thereafter the name of the company was changed from M/s. G.K. Enterprise (P.) Ltd. to Raja Rama Brothers (P.) Ltd. by resolution on 7.4.1992 which was duly approved by the Registrar of Companies as well as AIDC. The loanee Raja Rama Borthers (P.) Ltd. owned by the Appellants, owed a huge amount to AIDC to the extent of Rs. 75,84,181.00 as on 31.12.1996. Since the property of hotel Chilarai Regency has been under mortgage to AIDC, the property of the said hotel belongs to the company and if the property of the hotel in question is allowed to continue and remain under attachment vide order dated 29.3.1996, AIDC would not be able to realise its outstanding dues due to default in repayment of the same by the Appellants by selling the property in accordance with law.
5. The learned Special Judge upon hearing the learn
