2018 (3) TMI 2020 - HC - Indian Laws

Maintainability of petition - Appropriate Forum - High Court of Supreme Court - refund of amount seized on a misapprehension - HELD THAT - Considering the fact that the Appellant/Writ Petitioner was given a clean chit after investigations were completed and the Assistant Director of Income Tax (Investigation), Tirunelveli, through his letter, had informed the Second Respondent/Project Director, DRDA, Thoothukudi and Appellate Committee even as early as 28.11.2016 that money may be released back to him as per procedure and also this Court, taking note of the fact that the Learned Standing Counsel for the Fifth Respondent/Reserve Bank of India has fairly brought to the notice of this Court some of Notifications issued by the Ministry of Finance, the Specified Bank Notes (Cessation of Liabilities) Act, 2017 and the Operational Instructions relating to the Rules, 2017 and also keeping in mind the facts and circumstances of the present case, which float on the surface and taking into consideration the primordial fact that as on date, there is no impediment for the return of the said sum of Rs. 9 lakhs seized from the Appellant by the Authority concerned, this Court, in the interests of justice, fair play, equity and good conscience and even as a matter of prudence, directs Respondents 1 to 4, by adhering to the relevant provisions such as the Specified Bank Notes (Cessation of Liabilities) Act, 2017 and the Rules made thereunder and also the Operational Instructions issued by the Fifth Respondent/Reserve Bank of India dated 25.5.2017, to take necessary steps to hand over the seized sum of Rs. 9 lakhs to the Fifth Respondent/Reserve Bank of India together with the serial numbers of the seized notes. By exercising utmost caution and circumspection, the Fifth Respondent/Reserve Bank of India shall transfer the said amount to Respondents 1 to 4, who, in turn, shall transfer the said amount to the Appellant/ Writ Petitioner after subjectively satisfying and adhering to all the relevant provisions of the aforesaid Act, 2017, the Rules framed thereunder and the Operational Instructions and also the Procedural Requirements, which are in force. The handing over exercise of the aforesaid amount by the concerned Respondent(s) shall be carried out within a period of two weeks from the date of receipt of a copy of this order. After receipt of the same from the Fifth Respondent/Reserve Bank of India, Respondents 1 to 4 shall remit the sum of Rs. 9 lakhs in the bank account of the Appellant to be specified by him within a period of 10 days thereafter. Petition disposed off.

Summary

Issues Involved:
1. Jurisdiction of the High Court to entertain the writ petition in light of the Supreme Court's directions on demonetization-related matters.
2. The applicability of the Supreme Court's judgment on demonetization to the appellant's case.
3. The appellant's entitlement to the refund of Rs. 9 lakhs seized during the 2016 General Elections.
4. Compliance with the Specified Bank Notes (Deposit of Confiscated Notes) Rules, 2017 and other relevant legal provisions for the return of the seized amount.

Detailed Analysis:

1. Jurisdiction of the High Court:
The appellant challenged the order of the Learned Single Judge, which closed the writ petition based on the Supreme Court's direction that no other court shall entertain, hear, or decide any writ petition related to the demonetization of old Rs. 500 and Rs. 1000 notes. The High Court noted that the Supreme Court's order dated 16.12.2016 in W.P.(Civil) No. 906 of 2016 had indeed directed that no other court should entertain such petitions, as the issue was pending before the Supreme Court.

2. Applicability of the Supreme Court's Judgment:
The appellant argued that the writ petition did not arise from the demonetization decision but was related to the refund of Rs. 9 lakhs seized from him, which was to be returned as per the order of the Assistant Director of Income Tax (Investigation). The High Court considered this argument and acknowledged that the appellant's case was not directly related to the demonetization decision but rather to the refund of seized money.

3. Entitlement to Refund of Rs. 9 Lakhs:
The appellant contended that the authorities had a duty to refund the seized amount of Rs. 9 lakhs, which was taken during the 2016 General Elections for the Tamil Nadu Legislative Assembly. The respondents argued that due to demonetization, the seized Rs. 500 and Rs. 1000 notes could not be returned. However, the Election Commission of India had taken up the issue with the Reserve Bank of India, which clarified that the Specified Bank Notes (Deposit of Confiscated Notes) Rules, 2017 could be applied for the refund.

4. Compliance with Legal Provisions:
The High Court referred to the Specified Bank Notes (Deposit of Confiscated Notes) Rules, 2017, and the operational instructions issued by the Reserve Bank of India. These rules allowed for the deposit or exchange of confiscated specified bank notes if they were seized before December 30, 2016, and produced before a court. The High Court directed the respondents to follow these rules and the operational instructions to facilitate the refund of the seized amount to the appellant.

Conclusion:
Considering the appellant was given a clean chit after investigations and the Assistant Director of Income Tax (Investigation) had directed the refund, the High Court found no impediment to returning the seized amount. The court directed the respondents to take necessary steps to hand over the Rs. 9 lakhs to the Reserve Bank of India, which would then transfer the amount to the appellant's bank account. The order of the Learned Single Judge was modified accordingly, and W.A. No. 445 of 2018 was disposed of in these terms. W.A. No. 409 of 2018 was closed as nothing survived for adjudication.