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Sets Aside Appointment Of Former CJI Sanjiv Khanna In Adarsh Credit Case
In a significant development concerning the liquidation of the , the has set aside the appointment of former Chief Justice of India, Justice Sanjiv Khanna, as a to adjudicate disputes over attached properties. The Division Bench of Justice Munnuri Laxman and Justice Sangeeta Sharma, while hearing a batch of , ruled that the appointment violated the under the . However, the court declined to interfere with the or the directions, preserving the properties until the main are finally decided.
The Genesis of the Dispute
The case originates from the liquidation proceedings of Limited. The had passed against properties allegedly purchased using the society's funds, including those claimed by third parties. Aggrieved property owners, including Megha Tak and Mahesh Kumar Tak, challenged these attachments before a single judge of the . During the pendency of these , the single judge passed an on , directing and simultaneously appointing former CJI Sanjiv Khanna as a to adjudicate the claims and counterclaims of the parties. This appointment was challenged by the appellants through .
Arguments at the Fore
Senior Counsel for the appellants, , argued that the lacked the authority to attach third-party properties—a issue already adjudicated in the case of by a single judge in Jaipur, which held that the has no power of attachment over third-party assets. He further contended that appointing a retired Chief Justice of India to adjudicate the disputes bypassed the statutory mechanisms prescribed under the , which provides its own forums for resolution.
On the other hand, Additional Solicitor General , representing the State and other respondents, submitted that the were directed only against interim orders and that was pending. He argued that maintaining was necessary to safeguard the properties, and characterized the appointment of the former CJI as a agreed upon by all parties.
Court's Razor-Sharp Observations
The Division Bench carefully examined the
and found no evidence of a consensus.
"The
dated
does not refer to any specific agreement between the parties for appointing a retired Hon’ble Chief Justice of India to adjudicate the disputes,"
the court noted. The bench emphasized that the Act of 2002 establishes a comprehensive
for realization of assets of defunct societies, and conferring such powers on a retired Chief Justice could undermine this scheme.
However, the court refrained from deciding whether the
had the authority to attach the disputed properties, as that issue is pending before the single judge.
"Since the matter is pending before the learned Single Judge as to the sustainability of
, we are not inclined to go into the legal issue whether the
had the authority to proceed in the manner in which he did,"
the bench observed.
A Partial Victory with Safeguards
The court held that while the
on the properties must continue to preserve them until the
are adjudicated, the appointment of the
was unsustainable.
"We are of the view that until the adjudication is done in order to safeguard the properties in question, we are not inclined to interfere in the order of attachment or the order granting
by the learned Single Judge. However, we are inclined to set aside the order of appointing the retired Hon'ble Chief Justice of India as a
to adjudicate the claims and counter claims of the parties to the
."
The bench further directed that the should not have changed the ownership name through an , and ordered that as on , be maintained. The appeals were allowed to that extent, and the matters were remitted to the single judge for expeditious hearing and final disposal of the pending .
Looking Ahead
This ruling underscores the judiciary's commitment to preserving statutory frameworks while ensuring that interim arrangements do not create . The setting aside of the former CJI's appointment signals that extra-statutory dispute resolution mechanisms cannot override established legal processes. With the matter now back before the single judge, all eyes are on the of the and the fate of the properties caught in the Adarsh Credit liquidation saga.
