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TMI Blog2015 (12) TMI 1703X X X X Extracts X X X X X X X X Extracts X X X X ..... itution. (vi) The provision relating to appeal in both the Acts is treated as constitutional on the basis of reasoning that the power subsists with the High Court to extend the order of stay on being satisfied. (vii) The proviso to Section 18(1) of the Orissa Act does not fall foul of Article 21 of the Constitution. (viii) The provisions contained in Section 19 pertaining to refund of confiscated money or property does not suffer from any kind of unconstitutionality. (ix) Sub-rules (a) and (f) Rule 12 of the 2010 Rules being violative of the language employed in the Bihar Act are ultra vires or anything contained therein pertaining to the summary procedure is also declared as ultra vires the Bihar Act. Consequently, the appeals arising out of the judgment and order passed by the High Court of Orissa are dismissed and the appeals which have called in question the legal validity of the judgments and order passed by the High Court of Patna are allowed to the extent indicated hereinbefore. Regard being had to the facts and circumstances of the case, we refrain from imposing any costs in the civil appeals. - Civil Appeal Nos. 6448-6452, 6460 of 2011, Criminal Appeal Nos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2006 (for brevity, the Orissa Act ) which has been assented to by the President of India on 19.9.2007 and published in Extraordinary Orissa Gazette on 15.10.2007; and the Bihar Special Courts Act, 2009 (for short, the Bihar Act ), respectively. We are also required to consider the validity of an aspect of Bihar Special Court Rules, 2010 (for short, the 2010 Rules ). May it be stated though the High Court has noted the same and made certain observations yet has not proceeded to deal with the validity of the Rule in question. 4. As the factual matrix in all the cases has a common backdrop, we shall refer to the facts in brief. In all the cases, the Appellants are/were public servants and facing criminal cases for various offences including the offences under the Prevention of Corruption Act, 1988 (for short, 'the 1988 Act'), particularly Section 13(1)(e) of the 1988 Act on the allegation that they were having property disproportionate to their known sources of income. The grievance of Appellants in these appeals relate to the impact and effect of the legislations brought during the pendency of the proceedings. That apart, the constitutional validity of the number of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses as are instituted before it or transferred to it Under Section 10. Section 7 deals with the jurisdiction of Special Courts as to trial of offences. It lays down that Special Court shall have jurisdiction to try any person alleged to have committed the offence in respect of which a declaration has been made Under Section 5, either as the principal, or as a conspirator or abettor and for all the other offences, and the accused persons can jointly be tried therewith at one trial in accordance with the Code of Criminal Procedure, 1973 ( the Code for short). Section 8 deals with the procedure and powers of the Special Courts. Sub-section (2) of Section 8 lays the postulate that save as expressly provided in the Act, the provisions of the Code and of the 1988 Act shall, in so far as they are not inconsistent with the provisions of the Orissa Act, apply to the proceedings before a Special Court and for the purpose of the said provisions, the person conducting a prosecution before a special court shall be deemed to be a Public Prosecutor. Section 9 provides for an appeal to the High Court of Orissa from any judgment and sentence. Section 10 confers the power on the High Court of Oriss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 16 lays down that after the issue of notice Under Section 14, any money or property or both referred to in the said notice are transferred by any mode whatsoever, such transfer shall for the purposes of the proceedings under the Orissa Act, be void and if such money or property or both are subsequently confiscated to the State Government Under Section 15, then the transfer of such money or property or both shall be deemed to be null and void. Section 17(1) enables the aggrieved person by the order passed by an authorised officer to prefer an appeal within thirty days from the date on which the order appealed against was passed. Sub-section (2) provides that upon appeal being preferred under the said provision, the High Court may, after giving such parties, as it thinks proper, an opportunity of being heard, pass such order as it thinks fit; Sub-section (3) requires the High Court to dispose of the appeal within three months from the date it is preferred and stay order, if any, passed in appeal shall not remain in force beyond the period prescribed for disposal of appeal. Sub-section (1) of Section 18 of the Orissa Act empowers the State Government to take possession. It s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Orissa Act. Section 24 empowers the State Government to make rules as it may deem necessary for carrying out the purposes of the Orissa Act. Section 26, an overriding provision, provides that notwithstanding anything in the 1988 Act and the Criminal Law Amendment Ordinance, 1944 or any other law for the time being in force, the provisions of the said Act shall prevail in case of any inconsistency. 10. Having enumerated the scheme of the Orissa Act, we think it appropriate to refer to certain definitions under the 2007 Rules framed under the Orissa Act. Rule 2(e) and (f) define person holding high public office and person holding high political office , respectively. The said definitions read as under: 2(e) person holding high public office includes a public servant falling within the meaning of Clause (c) of Section 2 of the Prevention of Corruption Act, 1988 or Under Section 21 of the Indian Penal Code, 1860 and belonging to Group-A service of the Central or State Government or officers of equivalent rank in any organization specified in the explanation below Clause (b) of Section 2 of the said Act who was serving under or in connection with the affairs of the State G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the decision rendered by this Court in Kishore Chandra Patel's case (supra) wherein the provisions of Section 5 and other similar provisions of the impugned Act and Chapter III (Confiscation) have already been held to be constitutional, legal and valid as the same do not offend Articles 14 and 21 of the Constitution. (2) Whether the impugned Act is repugnant or inconsistent with the provisions of the Prevention of Corruption Act and other Central Acts to the impugned Special Courts Act, 2006? (3) Whether the provisions of the Orissa Special Courts Act, 2006 are repugnant to the provisions of the Prevention of Money Laundering Act as amended by Amendment Act, 2009? (4) Whether the impugned notification issued Under Section 5(1) of the Act is liable to be quashed? (5) Whether introducing the bill as Money Bill is legal and valid? 14. After posing the said questions, the High Court dealt with question Nos. 1 and 4 together and referred to the decision in Kishore Chandra Patel v. State of Orissa 1993 (76) CLT 720, and observed that in the aforesaid judgment, the constitutional validity of Part III regarding confiscation of monies and properties of the accused p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 4 SCC 391, M.P. Shikshak Congress and Ors. v. R.P.F. Commissioner, Jabalpur and Ors. (1999) 1 SCC 396., P. Venugopal v. Union of India: (2008) 5 SCC 1, M. Karunanidhi v. Union of India AIR (1979) SC 898 and Hoechst Pharmaceuticals v. State of Bihar AIR (1983) SC 1019 and came to hold that there was no repugnancy. As far as question No. 5 is concerned, the High Court referred to the scheme of Articles 198 and 199, referred to the authorities in State of Punjab v. Satyapal AIR (1969) SC 903 and Burrakur Coal Co. Ltd. v. Union of India AIR (1961) SC 954 and negatived the assail. As is manifest, the Court has fundamentally placed heavy reliance on earlier legislation which was given the stamp of approval by the High Court in Kishore Chandra Patel (supra). 15. Having stated how the Division Bench of the High Court of Orissa has dealt with the constitutional validity of the Orissa Act, we think it apt and definitely for the sake of convenience, to refer to the Bihar Act, challenges before the High Court and the judgment rendered by the High Court of Judicature at Patna. The Bihar Act was notified in the Gazette on 8.2.2010. Section 2 of the dictionary clause defines the Act, that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication Under Section 13 of the Act which requires a range of information to be furnished. 16. Presently, we shall refer to the judgment rendered by the Division Bench of the High Court of Patna. It has referred to the preamble and highlighted certain aspects of the preamble and scanned the anatomy of the Bihar Act. It was contended before the High Court that the declaration made Under Section 5 which brings the case of the accused under the purview of the Bihar Act to be tried by the Special Judge, exposes him to the risk of confiscation of property which the accused does not face under the 1988 Act; that when there are sufficient provisions in the Code of Criminal Procedure pertaining to disposal of property at conclusion of the trial Under Section 452, there was no justification or warrant to introduce a provision for confiscation; that no guidelines have been provided by the legislature for working of Section 5(1) and 5(2) of the 2009 Act and it is completely unguided giving total discretion to the State Government to pick and choose any particular case; that Section 5(1) suffers from unreasonable classification because certain offences covered under the 1988 Act would be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an independent proceeding to be conducted by the authorized officer and it cannot be treated as a part of the criminal proceeding; that the procedure prescribed for adjudication of the issues relating to confiscation of properties does not suffer from any arbitrariness inasmuch as the confiscation including taking over possession of the confiscated property is independent and the plea that the findings recorded by the authorized officer in every likelihood to cause prejudice and bias during the trial, is absolutely unsustainable inasmuch as the statute itself provides the exclusion of consideration of the said material and the findings during the trial. 18. Adverting to the rivalised submissions, the High Court opined that the nature of property sought to be confiscated under the Act is different and, therefore, the assail has no substance; that the provision in Section 13 of the Act and related provisions in Chapter-III cannot be faulted on account of ordinary principles of criminal jurisprudence that penalty or punishment must follow determination of guilt of the accused for confiscation, a pro tem one, is of a different nature; that the Act guarantees fairness to the accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal, but it is only desirable that the appeal should be disposed of within six months, and, accordingly, the stay order passed by the High Court will not lose its force automatically on expiry of any particular period. Placing such an interpretation, the High Court of Patna expressed the view that the said interpretation is to be preferred in order to save the provision from the vice of unreasonableness by causing undue hardship to the delinquent-Appellant. 20. Dwelling on the issue of refund as contained Under Section 19 is concerned, the High Court found merit in the contention advanced on behalf of the writ Petitioners and observed that there can be no justification to cause any hardship or loss to the delinquent or the accused once the confiscation proceeding fails because it is the constitutional obligation of the State that it shall not act in an unreasonable manner. Being of this view, it clarified that Section 19 requires clarification by way of interpretation that ordinarily when the confiscation is modified or annulled by the High Court in an appeal or where the person affected is acquitted by the Special Court, the money or property or both shall be returned to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble procedure of confiscation proceeding, including appeal, a dwelling house or unit of the delinquent is found to be ill-gotten property which cannot be accounted for on the basis of lawful income of the delinquent, there can be hardly any justification to allow the delinquent to continue in enjoyment of such ill-gotten property only because the trial is still pending. The legislature having taken precautions to expedite the trial and if it is made to linger inspite of such provisions, the accused would always be at liberty to take remedial action and get the trial expedited. Being of this view, the Writ Court found that the said provision does not violate any of the facets of Articles 14 and 21 of the Constitution of India. 22. It was also urged before the High Court that the confiscation proceedings as provided under the Act is impermissible because it leaves no option to the affected person but to disclose his defence prior to holding of the trial and such compulsion upon him to disclose true state of affairs in the confiscation proceeding frustrates the right guaranteed by the Article 20(3) of the Constitution. The High Court did not find any substance in the said submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues that have been urged before the High Court and the additional points that have been canvassed before us, it is necessary to understand the background of the legislation. We have already indicated at the beginning the purpose of enacting the legislation by the States of Odisha and Bihar and have scanned the scheme of both the Acts and also adumbrated upon the reasoning ascribed by the High Courts while upholding the constitutional validity of the enactments. Be it noted, the objects and reasons of the Orissa Act as well as that of the Bihar Act are almost similar. Therefore, we only reproduce the objects and reasons of the Orissa Act. It reads as follows: An Act to provide for the constitution of special courts for the speedy trial of certain class of offences and for confiscation of the properties involved. WHEREAS corruption is perceived to be amongst the persons holding high political and public offices in the State of Orissa; AND, WHEREAS, investigations conducted by the agencies of the Government disclose prima facie evidence, confirming existence of such corruptions; AND WHEREAS, the Government have reasons to believe that large number of persons, who had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that corruption is not to be judged by degree, for corruption mothers disorder, destroys societal will to progress, accelerates undeserved ambitions, kills the conscience, jettisons the glory of the institutions, paralyses the economic health of a country, corrodes the sense of civility and mars the marrows of governance. The Court further observed that immoral acquisition of wealth destroys the energy of the people believing in honesty, and history records with agony how they have suffered; and the only redeeming fact is that collective sensibility respects such suffering as it is in consonance with the constitutional morality. The emphasis was on intolerance of any kind of corruption bereft of its degree. 29. While dealing with the constitutional validity of Section 6-A of the Delhi Special Police Establishment Act, 1946, the Constitution Bench in Subramanian Swamy v. CBI (2014) 8 SCC 682, clearly stated that corruption is an enemy of the nation and tracking down corrupt public servants and punishing such persons is a necessary mandate of the 1988 Act and it is difficult to justify the classification which has been made in Section 6-A because the goal of law in the 1988 Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allows enough room for repugnancy, as is understood within the conceptual sweep of Article. 254(2) of the Constitution, to set in. (E) The State legislation makes a distinction between the other offences Under Section 13 and 13(1)(e) without any intelligible differentia between the two categories of offences and in the absence of any justifiable classification test, the provision is ultra vires the Article 14 of the Constitution. (F) The corruption on which the fulcrum of argument of the State rests for bringing such a legislation is impermissible inasmuch as corruption is an all India phenomenon and in other States, similarly situated persons are tried under the 1988 Act, but in Odisha they are tried under the special provisions for no manifest reason. (G) The Orissa Act does not define high political offices and high public offices but an attempt has been made to define the same in the Rules, but the Rules cannot stand as pillars to support the constitutional validity of the legislation. That apart, these terms are extremely vague and leave enough room to the executive to adopt any kind of discrimination which is impermissible. (H) Section 5 of the Orissa Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there can be no shadow of doubt that such a provision creates a dent in the concept of power of judicial review, which is constitutionally not allowable. (N) The provision contained in Section 19 of the Orissa Act which pertains to payment of amount with five per cent interest per annum when the State Government is not in a position to return the property and the value of the property has to be on the date of confiscation, is absolutely arbitrary and unreasonable which clearly invites the discomfort of Article 14 and also clearly violates Article 300A of the Constitution. (O) The reason ascribed to classify the persons holding high public office or high political office on the foundation that there is a necessity for speedy trial is absolutely no justification because there has to be speedy trial in every case. 32. Resisting the aforesaid submissions and defending the judgment of the High Court, learned Counsel for the State of Odisha has submitted as follows: (I) The Bill was introduced in the legislature as a money bill, regard being had to the confiscation of disproportionate assets by way of interim measure and various other aspects and, in any case, the introdu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases at high levels, especially instituted Under Section 13(1)(e) of the 1988 Act, is definitely a ground to sustain the provisions of the Orissa Act. (VIII) The plea that provisions, namely, Sections 5 and 6, and the provisions pertaining to confiscation being irrational and discriminatory, are violative of Article 14, is wholly unacceptable inasmuch as the classification in respect of offences, that is, Section 13(1)(a) to (1)(e), stand on a different footing and the intelligible differentia is clearly demonstrable. The attack on the provisions on the plank of unbridled conferment of power on the executive to pick and choose pertaining to the declaration is on an erroneous understanding of the provision, for the provision has to be read in an apposite manner to convey the meaning that the State Government has extremely limited discretion only to see whether the offence falls Under Section 13(1)(e) or not and the moment a person covered under the Act is booked for the offence Under Section 13(1)(e), the State Government has no further discretion than to make a declaration to transfer the case to the Special Court. (IX) The challenge to the confiscatory proceeding which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest per annum has to be appropriately understood, for this can only happen in a very rarest occasion and the words used in the provision are to be appropriately understood because of some reason beyond control like due to natural disaster or some other calamity; and not because of any appropriation of the property by the State Government. In essence, the submission is, the said provision can be read down to sustain its constitutional validity. 33. First, we shall take up the issue pertaining to the introduction of the Bill as a money bill in the State legislature. Mr. Vinoo Bhagat, learned Counsel appearing for some of the Appellants, has laid emphasis on the said aspect. Article 199 of the Constitution, defines Money Bills. For our present purpose, Sub-article (3) of Article 199 being relevant is reproduced below: (3). If any question arises whether a Bill introduced in the Legislature of a State which has a Legislative Council is a Money Bill or not, the decision of the Speaker of the Legislative Assembly of such State thereon shall be final. We have extracted the same as we will be referring to the authorities as regards interpretation of the said Sub-article. 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, Article 122(1) prohibits the validity of any proceedings in Parliament'' from being called in question in a court merely on the ground of irregularity of procedure . In other words, the procedural irregularities cannot be used by the court to undo or vitiate what happens within the four walls of the legislature. But then, procedural irregularity stands in stark contrast to substantive illegality' which cannot be found included in the former. We are of the considered view that this specific provision with regard to check on the role of the judicial organ vis- -vis proceedings in Parliament uses language which is neither vague nor ambiguous and, therefore, must be treated as the constitutional mandate on the subject, rendering unnecessary search for an answer elsewhere or invocation of principles of harmonious construction. xxx 366. The touchstone upon which parliamentary actions within the four walls of the legislature were examined was both the constitutional as well as substantive law. The proceedings which may be tainted on account of substantive illegality or unconstitutionality, as opposed to those suffering from mere irregularity thus cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Counsel for the Appellants. 39. The next issue pertains to understanding of ambit and sweep of Article 247 of the Constitution. The said Article reads as follows: Article 247. Power of Parliament to provide for the establishment of certain additional courts.--Notwithstanding anything in this Chapter, Parliament may by law provide for the establishment of any additional courts for the better administration of laws made by Parliament or of any existing laws with respect to a matter enumerated in the Union List. 40. Relying on the said constitutional provision, learned Counsel has proponed that the Article empowers the Parliament to provide for establishment of certain additional courts and that too for the better administration of laws made by Parliament. He has contended that no part of the Constitution confers power on State legislature to create additional courts for administering central laws and, therefore, the Orissa Act is ultra vires Article 247 of the Constitution. He has referred to Article 366(10) of the Constitution to buttress the proposition that courts can be established in respect of central laws only by the Parliament and not by the State legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with the offences and the State Governments in consultation with the High Court appoint requisite special Judges. Section 3 of the 1988 Act provides that the Central Government or the State Government may, by notification in the Official Gazette, appoint as many special Judges as may be necessary for such area or areas or for such case or group of cases as may be specified in the notification to try any offence punishable under this Act; and any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in Clause (a) of Sub-section (1) of the said Section. 43. The present Orissa Act which specifically deals with offences Under Section 13(1)(e) and provides for Special Courts for the trial of the said offences has got the assent of the President. It is to be understood that under the 1988 Act the State had the authority to appoint special Judges in respect of all the offences. Presently, one part of the offence has been carved out and after obtaining assent Special Courts have been established. In view of the fact situation, it does not violate Article 247. That apart, the language employed in Article 247 does not take away the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passage from the said authority: 44. The challenge to the legislative competence of Parliament to provide for the creation of Special Courts is devoid of substance. Entry 11-A of the Concurrent List relates to Administration of justice; constitution and organisation of all courts, except the Supreme Court and the High Court . By virtue of Article 246(2), Parliament has clearly the power to make laws with respect to the constitution and organisation, that is to say, the creation and setting up of Special Courts. Clause 2 of the Bill is therefore within the competence of the Parliament to enact. 45. Be it noted that a contention was raised that Parliament could not have created Special Courts but the Court repelled the said submission and accepted the contention that such a power exists with Parliament in view of Articles 138(1) and 246(1) and Entries 77, 78 and 99 of List I of the Seventh Schedule and Entry 11-A of List III and the courts can be created by the State legislature as well as by the Parliament. As has been indicated earlier, Section 3 of the 1988 Act empowers the State Government to constitute special courts and when a category of offence has been segregated and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n pertains to repugnancy and the nature of assent obtained by the State Government from the President Under Article 254(2) of the Constitution. The submission of the learned Counsel for the Appellants is that though the State legislature reserved it for presidential assent, yet assent has not been taken in respect of the entire Orissa Act and also in respect of other laws, namely, the Prevention of Money-Laundering Act, 2002, etc. as a consequence of which it will ultimately lead to a situation of anomaly and, therefore, there is repugnancy in respect of existing legislations in similar fields enacted by the Parliament and the Orissa Act. 50. Article 254 deals with inconsistency between laws made by the Parliament and laws made by the Legislature of States. Article 254(2) deals with laws made by the State legislature in respect of the matters enumerated in the Concurrent List. The issue of repugnancy arises when the subjects come within List III of the Seventh Schedule. In Hoechst Pharmaceuticals Ltd. and Anr. v. State of Bihar and Ors. AIR 1983 SC 1019 : 1983 (4) SCC 45, the Court referred to the authority in Deep Chand v. The State of Uttar Pradesh and Ors. (1959) Supp. 2 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd State law must be taken to refer only to the Concurrent field. Article 254(1) speaks of a State law being repugnant to (a) a law made by Parliament or (b) an existing law. 52. Thus, it is settled in law that the State law may become repugnant when there is a direct conflict between the two provisions. In this regard, reference to the authority in Engineering Kamgar Union v. Electro Steels Castings Ltd. and Anr. (2004) 6 SCC 36 would be instructive. It has been held therein that recourse to the said principles, however, would be resorted to only when there exists direct conflict between two provisions and not otherwise. Once it is held that the law made by the Parliament and the State Legislature occupy the same field, the subsequent legislation made by the State which had received the assent of the President of India indisputably would prevail over the parliamentary Act when there exists direct conflict between two enactments. It has been further observed that both the laws would ordinarily be allowed to have their play in their own respective fields; however, in the event there exists any conflict, the parliamentary Act or the State Act shall prevail over the other depending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of law made by the State Legislature touching upon a matter covered by the Concurrent List, will not be void if it can coexist and operate without repugnancy with the provisions of the existing law. 55. It needs no special emphasis to state that the issue of repugnancy would also arise where the law made by the Parliament and the law made by the State legislature occupy the same field. It has been so held in Sitaram and Bros. v. State of Rajasthan 1995 (1) SCC 257. 56. In this context, reference to M.P. Shikshak Congress (supra) would be fruitful. While repelling the plea of repugnancy, it has been held that Under Article 254(1) of the Constitution, if any provision of a law made by the legislature of a State is repugnant to any provision of a law made by the Parliament, which Parliament is competent to enact, then subject to the provisions of Clause (2), the law made by Parliament, whether passed before or after the law made by the legislature of such State shall prevail and the law made by the legislature of the State shall, to the extent of the repugnancy, be void. The ordinary rule, therefore, is that when both the State Legislature as well as Parliament are co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of a matter with respect whereto Parliament has power to make laws, as its competence was limited only to the matters with respect to which the legislature of the State has the requisite legislative competence. Even assuming that the matter relating to the welfare of the working journalists is a field which falls within Entry 24 of the Concurrent List, unless and until a legislation is made and assent of the President is obtained, the provisions of the 1955 Act and the Working Journalists (Fixation of Rates and Wages) Act, 1958 would have prevailed over the State enactment. 59. The issue in the instant case is that the State Government had not complied with the requisite procedure for obtaining the assent of the President. The criticism advanced by the learned Counsel for the Appellants is that in the letter written by the State Government to the competent authority for obtaining assent only certain provisions of the Orissa Act were mentioned but there is no reference to other provisions and certain other legislations, which also cover the same field. To bolster the said submission, reliance has been placed on the Constitution Bench decision in Kaiser-I-Hind (P) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s necessary and the consideration would mean consideration of the proposal made by the State for the law enacted despite it being repugnant to the earlier law made by Parliament on the same subject. If the proposal made by the State is limited qua the repugnancy of the State law and law or laws specified in the said proposal, then it cannot be said that the assent was granted qua the repugnancy between the State law and other laws for which no assent was sought for. Take for illustration--that a particular provision, namely, Section 3 of the State law is repugnant to enactment A made by Parliament; other provision, namely, Section 4 is repugnant to some provisions of enactment B made by Parliament and Sections 5 and 6 are repugnant to some provisions of enactment C and the State submits proposal seeking assent mentioning repugnancy between the State law and provisions of enactments A and B without mentioning anything with regard to enactment C. In this set of circumstances, if the assent of the President is obtained, the State law with regard to enactments A and B would prevail but with regard to C, there is no proposal and hence there is no consideration or assent . Proposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anr. v. State of Uttarakhand and Ors.: (2011) 8 SCC 708, another Constitution Bench adverted to the earlier pronouncements on the concept of assent of the President including the authority in Kaiser-I-Hind (P) Ltd. (supra) and observed that in the said case this Court made it clear that it was not considering whether the assent of the President was rightly or wrongly given; and whether the assent was given without considering the extent and the nature of the repugnancy and should be taken as no assent at all. In Rajiv Sarin (supra), the Court reproduced paragraph 27 from Kaiser-I-Hind (P) Ltd. (supra), which is to the following effect: In this case, we have made it clear that we are not considering the question that the assent of the President was rightly or wrongly given. We are also not considering the question that--whether 'assent' given without considering the extent and the nature of the repugnancy should be taken as no assent at all. Further, in the aforesaid case, before the Madras High Court also the relevant proposal made by the State was produced. The Court had specifically arrived at a conclusion that Ext. P-12 shows that Section 10 of the Act has been ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple of obtaining assent, the controversy at hand is required to be dealt with on the touchstone of the said principles. The competent authority of the State had written to the appropriate authority for obtaining assent. We think it apt to reproduce the said letter: N. Sanyal, IAS Commissioner-cum-Secretary To Governor, Orissa, No. 7876/SC (Con) Dated the 28 October 2006 To, The Secretary to Government of India, Ministry of Home Affairs, New Delhi-1 Sub: Proposal to obtain assent of the President of India Under Article 254(2) of the Constitution of India to the Orissa Special Courts Bill, 2006 Sir, I am directed to say that in order to tackle the menace of corruption in public life and since the existing courts lack necessary machineries for speedy termination of the trial of the offences under Clause (e) of Sub-section (1) of Section 13 of the Prevention of Corruption Act, 1988, it is considered necessary to establish Special Courts by enacting a Special legislation. Accordingly, the Orissa Special Courts Bill, 2006 was passed by the State Legislature on 11.8.2006. 2. The Bill seeks to enable the State Government to establish S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter, it is demonstrable that the State Government had sought assent of the President in respect of certain provisions of the 1988 Act, the Code of Criminal Procedure, 1973 and the Criminal Law Amendment Ordinance, 1944. On a scrutiny of the judgment of the High Court, it is manifest that on behalf of the State certain communications were placed on record from which the High Court was satisfied that the assent had been properly obtained. In the course of hearing, we have also found that the entire Bill was sent for the assent with the aforesaid forwarding letter and there has been correspondence thereafter. On a perusal of the communication and the finding recorded by the High Court and keeping in view the purpose of communication and taking note of the fact that the entire Bill was sent to the President for obtaining assent, it can safely be concluded that the President was apprised of the reason when the assent was sought. The assent has been given in general terms so as to be effective for all purposes. It cannot be said that the general assent by the President was not obtained. Thus, we are of the considered opinion that the provisions of the Orissa Act are definitely not repu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.... 70. Section 2(p) defines money laundering and Section 3 which has connection with Section 2(p) defines offence of money laundering . Sections 3 and 4 read as follows: Section 3. Offence of money-laundering.-- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Section 4. Punishment for money-laundering.-- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine: Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words which may extend to seven years , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed. Sub-section (3) provides that every order of attachment made Under Sub-section (1) shall cease to have effect after the expiry of the period specified in that Sub-section or on the date of an order made Under Sub-section (2) of Section 8, whichever is earlier and Sub-section (4) says that nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached Under Sub-section (1) from such enjoyment. Sub-section (5) stipulates that the Director or any other officer who provisionally attaches any property Under Sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. 72. Section 8 deals with adjudication and provides that (1) on receipt of a complaint Under Sub-section (5) of Section 5, or applications made Under Sub-section (4) of Section 17 or under Sub-section (10) of Section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence Under Section 3 or is in possession of proceeds of crime, he may serve a notice of not less than thirty days on such person calling upon him to indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Tribunal. Section 43 provides for designation of Special Courts. The said provision being relevant is reproduced below: Section 43. Special Courts.--(1) The Central Government, in consultation with the Chief Justice of the High Court, shall, for trial of offence punishable Under Section 4, by notification, designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification. Explanation.--In this Sub-section, High Court means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation. (2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in Sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial. 74. Section 44 provides for offences triable by Special Courts. Section 47 provides for appeal to the High Court against the judgment passed by the Special Courts. Chapter IX of the Prevention of Money-Laundering Act, 2002 deals with reciprocal arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77. We have analysed the scheme under the Prevention of Money-Laundering Act, 2002. It is clearly demonstrable that the offences under the said Act are different from an offence under the 1988 Act. The offence under the Orissa Act which has been carved out is the offence Under Section 13(1)(e) of the 1988 Act and the Orissa Act provides for establishment of Special Courts and also provides for provisions pertaining to confiscation at an interim stage. The entire Prevention of Money-Laundering Act, 2002, if keenly scrutinized, clearly reveals that it deals with different situations altogether; a different offence which has insegregable nexus with money laundering. True it is, in 2009 an amendment was brought incorporating the 1988 Act in Part B of the Schedule, and the said Part B has been totally deleted in 2013. In view of the same, the submission of the learned Counsel for the State is that after deletion of Part B the issue has become academic. Be that as it may, Part B of the Prevention of Money-Laundering Act, 2002 enumerated offences under the Indian Penal Code, The Narcotic Drugs and Psychotropic Substances Act, 1985; The Explosive Substances Act, 1908; The Unlawful Activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a right to the forum is absolutely unsustainable and the Appellants have been aggrieved by the substantive part and not by the facet relating to adjective law. 80. The principal ground of attack of the said provisions is that the legislature has not defined persons who have held high public or political office . According to them, in the absence of any definition, it is extremely arbitrary and confers unbridled powers on the State Government and that apart, it is quite vague as a consequence of which, it invites the frown of Article 14 of the Constitution. Learned Counsel for the State, per contra, has drawn our attention to the objects and reasons of the Act and has propounded that the concept of high public or political office is well understood and the provision does not deserve to be struck down solely on the ground that there is no definition of the said words in the dictionary clause. 81. Be it stated, the definition in the rules have been pressed into service. We need not look at the rules, for we have to find out whether in the provision in the context of the legislation and the purpose it intends to serve, there is enough guidance not to allow any kind of arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office in the State of Orissa as defined under the Act and the Rules, the State Government shall mandatorily make a declaration to that effect and the State Government does not have any discretion on the subject. It has also been asserted that the role of the State Government is limited to be satisfied that the ingredients of Section 5(1) of the Special Courts Act are existent and if the ingredients of Section 5(1) of the Special Courts Act are in existence, the State Government is bound to make a declaration to that effect. Placing reliance on the said affidavit, the High Court has repelled the submission urged on behalf of the Petitioners therein. We must say without any reservation that the approach of the High Court is erroneous. Constitutionality of a provision has to be tested within the constitutional parameters. An affidavit filed by an officer of the State Government cannot change the interpretation if it is textually and contextually not permissible. In Supreme Court Advocates-on-Record Association and Anr. v. Union of India 2015 (11) SCALE 1, while dealing with the term fit expressed Under Section 5(1) of the National Judicial Appointments Commission Act, 2014, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the said statement of law only to highlight that the affidavit sworn by the Joint Secretary could not have been relied upon by the High Court for the purpose of construction of Section 5 of the Orissa Act. Thus viewed, we have to understand, appreciate and interpret the provisions contained in Section 5 and Section 6 whether there is any scope for arbitrary use of power. 86. The language employed in Section 5 has to be appositely scrutinized. Section 5(1) of the Orissa Act provides that if the State Government is of the opinion that there is prima facie evidence of the commission of an offence alleged to have been committed by a person, who held high public or political office in the State of Orissa, the State Government shall make a declaration to the effect in every case in which it is of the aforesaid opinion. The Division Bench of the High Court on earlier occasion in Kishore Chandra Patel (supra) had struck down the part that stated and that the said offence ought to be dealt with under the Act and treated the rest of it as valid. The legislature, as is perceptible, has rightly deleted the said words. Interpretation of the stipulations in Section 5 are to be appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 418, 425 (1918). Learned Hand, J., was equally emphatic when he said: Statutes should be construed, not as theorems of Euclid, but with some imagination of the purposes which lie behind them. (Lenigh Valley Coal Co. v. Yensavage 218 FR 547, 553). 88. In R.L. Arora v. State of Uttar Pradesh and Ors. AIR 1964 SC 1230 the Constitution Bench dealt with the validity of amendments to Land Acquisition Act, 1894 as amended by Act 31 of 1962. The challenge therein was to the amendments of certain provisions in the Land Acquisition Act, 1894. While dealing with the concept of construction of a provision, the Court opined that a literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning, of the words used in a provision of the statute. The Court further ruled that it is permissible to control the wide language used in a statute if that is possible by the setting in which the words are used and the intention of the law- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther enacting provisions of the same statute but its preamble, the existing state of the law, other statutes in pari materia and the mischief which--the statute was intended to remedy' 92. The concept of context has also been emphasised in Maharaj Singh v. State of U.P. (1977) 1 SCC 155. 93. Apart from the aforesaid interpretation, we are also of the view that regard being had to the text, context and the legislative intendment, the principle of reading down can be applied to save it from the constitutional invalidity. May it be mentioned that there are certain authorities which have held that such provisions are valid when the power is vested with high authority and there is guidance in the language employed in the provision. But we prefer to take this route as we find the legislature never intended to leave any offender. In Shreya Singhal v. Union of India (2015) 5 SCC 1, the Court upheld the constitutional validity of Section 79 of the Information Technology Act, 2000 subject to Section 79(3)(b) by stating as follows: Section 79 is valid subject to Section 79(3)(b) being read down to mean that an intermediary upon receiving actual knowledge from a court order or on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to make it workable. In the garb of reading down , however, it is not open to read words and expressions not found in it and thus venture into a kind of judicial legislation. The rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is to be used keeping in view the scheme of the statute and to fulfill its purposes. 97. We have referred to the aforesaid authorities only to highlight that the interpretation placed by us can come within both the conceptions, namely, textual and contextual interpretation as well as also reading down the provision to save it from unconstitutionality. Be it stated, by such reading down no distortion is caused. 98. Applying the aforesaid principle, we are inclined to think that the State Government is only to be prima facie satisfied that there is an offence Under Section 13(1)(e) and the accused has held high public or political office in the State. Textually understanding, the legislation has not clothed the State Government with the authority to scrutinize the material for any other purpose. The State Government has no discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, a question arose as to how far it is permissible to refer to the rules made in an Act while judging the legislative competency of a legislature to enact a particular provision. In that context, the majority speaking through Ranganathan, J. observed that a subordinate legislation cannot travel beyond the purview of the Act. The learned Judge noted that where the Act says that rules on being made shall be deemed as if enacted in this Act , the position may be different. Thereafter, the learned Judge said that where the Act does not say so, the rules do not become a part of the Act. A passage from Halsbury's Laws of England (3rd Edn.) Vol. 36 at page 401 was referred to. It was contended on behalf of the State of Gujarat that the opinion expressed by Hedge J. in J.K. Steel Ltd. v. Union of India AIR 1970 SC 1173, a dissenting opinion was pressed into service. The larger Bench dealing with the said submission expressed the view: ...Shri Mehta points out further that Section 86 which confers the rule-making power upon the Government does not say that the rules when made shall be treated as if enacted in the Act. Being a rule made by the Government, he says, Rule 42-E can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been committed during the period mentioned in the Preamble by a person who held high public or political office in India and that in accordance with the guidelines contained in the Preamble, the said offence ought to be dealt with under the Act, the Central Government shall make a declaration to that effect in every case in which it is of the aforesaid opinion. 105. It was contended that Section 4(1) furnished no guidance for making the declaration for deciding who one and for what reasons should be sent up for trial to the Special Courts. The Court referred to the various statutes with regard to classification and the concept of guidance and vagueness and opined that: ...By Clause 5 of the Bill, only those offences can be tried by the Special Courts in respect of which the Central Government has made a declaration Under Clause 4(1). That declaration can be made by the Central Government only if it is of the opinion that there is prima facie evidence of the commission of an offence, during the period mentioned in the preamble, by a person who held a high public or political office in India and that, in accordance with the guidelines contained in the Preamble to the Bill, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been placed by the State Government. The Appellants therein while challenging the conviction raised a number of preliminary objections including constitutional validity of the Special Courts Act [No. 22 of 1979] on several grounds, including contravention of Articles 14 and 21 of the Constitution. A three-Judge Bench referred to the order passed in the reference made by the President of India Under Article 143(1) of the Constitution wherein majority of the provisions in the Bill were treated to be valid. Thereafter, the Bill ultimately got the assent of the President with certain changes. After the Act came into force, it assumed a new complexion. The Court in the latter judgment referred to clauses in the preamble and scanned the anatomy of the Act. It was contended that regard being had to the principles laid down by this Court in the Special Courts Bill, 1978 (supra) the provisions fail to pass the test of valid classification Under Article 14, for the classification which distinguishes persons who are placed in a group from others who are left out of the group is not based on intelligible differentia; that there was no nexus between the differentiation which was the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms part of a political department of the Government or the political executive. This, therefore, clearly includes Cabinet Ministers, Ministers, Deputy Ministers and Parliamentary Secretaries who are running the Department formulating policies and are responsible to the Parliament. The word High is indication of a top position and enabling the holder thereof to take major policy decisions. Thus, the term high public or political office used in the Act contemplates only a special class of officers or politicians who may be categorised as follows: (1) officials wielding extraordinary powers entitling them to take major policy decisions and holding positions of trust and answerable and accountable for their wrongs; (2) persons responsible for giving to the State a clean, stable and honest administration; (3) persons occupying a very elevated status in whose hands lies the destiny of the nation. 29. The rationale behind the classification of persons possessing the aforesaid characteristics is that they wield wide powers which, if exercised improperly by reason of corruption, nepotism or breach of trust, may mar or adversely mould the future of the country and tarnish i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The said words, we are absolutely certain, convey a category of public servants which is well understood and there is no room for arbitrariness. 111. The next aspect of challenge pertains to the classification made by the legislature in respect of the accused persons facing trial Under Section 13(a) to (d) and the accused persons Under Section 13(1)(e). It is urged by the learned Counsel for the Appellants that there is no intelligible differentia for making such a classification qua the offence and moreover by adopting a rigorous procedure. 112. First, we shall advert to the class of offence and the persons. It is submitted by Mr. Vinoo Bhagat, learned Counsel appearing for some of the Appellants, that when a person holding public office is accused of an offence Under Section 13(1) (a) to (d), he will be tried by the Special Courts under the 1988 Act, but when Section 13(1)(e) is combined along with other offences, namely, Section 7 to 11 of the 1988 Act, he will be facing the trial under the Orissa Act or two trials. Mr. P.S. Narasimha, learned senior Counsel, would contend that the bifurcation of offences defeats the concept of classification, for it pertains to a stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned; or (c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do; or (d) if he,- (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or (e) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income. Explanation. - For the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fers because of under-inclusive classification but the same does not impress us as in the instant case we are disposed to think that there is a perceptible differentia in such exclusion. The court cannot adopt an attitude to scrutinize a provision with mathematical exactitude. A pedantic approach in this regard cannot be visualized. Learned Counsel for the State of Odisha would submit that the distinction is writ large and the legislature in its wisdom has carved out the offence of Section 13(1)(e) to be tried by Special Courts in a speedy manner. It is urged by him that the onus is on the accused to prove that the asset is not disproportionate and within the known sources of his income. He has drawn inspiration from P. Nallamal v. Inspector of Police (1999) 6 SCC 559, wherein it has been held that the words known sources of income have to be understood as any lawful source . That apart, the explanation to Section 13(1)(e) further enjoins that receipt of such income should have been intimated by the public servant in accordance with the provisions of any law applicable to such public servant at the relevant time. Such a public servant cannot escape from Section 13(1)(e) of the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. 117. Having noted the aforesaid authorities, it is instructive to refer to the authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginning, an exordial enunciation of my socio-legal perspective which has a constitutional bearing may be set out. I lend judicious assent to the broader policy of social justice behind this Bill. As I read it, this measure is the embryonic expression of a necessitous legislative project, which, if full-fledged, will work a relentless break-through towards catching, through the compulsive criminal process, the higher inhabitants of Indian public and political decks, who have, in practice, remained untouchable and unapproachable to the rule of law. Operation Clean-Up is a consummation devoutly to be wished , although naive optimism cannot obfuscate the obnoxious experience that laws made in terrorem against those who belong to the top power bloc prove in action to be paper tigers. The pathology of our public law, with its class slant, is that an unmincing ombudsman or sentinel on the qui vive, with power to act against those in power, now or before, and offering legal access to the informed citizen to complain with immunity does not exist, despite all the bruited umbrage of political performers against peculations and perversions by higher echelons. Law is what law does, not w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e controversy can be looked from another angle. The special courts have been established on the basis of the law enacted by the State Legislature after obtaining the presidential assent. The legislature has spelt out a policy for the purpose of establishing the Special Courts. It relates to an offence of special kind. In this regard, reference to a Constitution Bench decision in Kedar Nath Bajoria v. The State of West Bengal (1954) SCR 30 may be usefully referred to. Speaking for the majority, Patanjali Sastri C.J. distinguished the decision in State of West Bengal v. Anwar Ali Sarkar (1952) SCR 284. The Court referred to the Act which was brought into existence to provide for the more speedy trial and more effective punishment of certain offences. The Court while dealing with the equal protection of law guaranteed by Article 14 of the Constitution observed that there is a system which is brought into by introducing Special Courts dealing with special types of offences under a shortened and simplified procedure. The legislation is based on perfect intelligible principles of differentia having a clear and reasonable relation with the object sought to be achieved. The Court further o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peccable and it is saved from the vice of Article 14 of the Constitution. 124. The next submission advanced by the learned Counsel for the Appellants pertains to the issue that the corruption is an all India phenomenon and persons in other States are prosecuted under the 1988 Act, whereas in the State of Odisha, they are tried in a more rigorous manner. It is submitted that the same brings in inequality which causes discomfort to Article 14 of the Constitution. We have already held that as the assent of the President Under Article 254(2) of the Constitution has been obtained and the assent is valid in law, the State law will operate. Article 14 comes into play where equals are treated as unequals. The persons holding high public or political office in the State of Odisha are governed by the Orissa Act. The State legislature has passed the Orissa Act having regard to the obtaining situation in the State as the objects and reasons of the said Act do reflect. The legislature in its wisdom has enacted the law. The persons who are functioning in certain other States may be required to face trial under the 1988 Act, but on that score there can be no violation of Article 14 of the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduce the relevant provisions of the Act. The said provisions are Sections 13, 14, 15 and 16 of the Orissa Act. They occur in Chapter III of the Orissa Act that deals with confiscation of property. We have outlined the said provisions earlier. To appreciate the controversy in proper perspective, we reproduce the said provisions: Section 13. Application for confiscation. - (1) Where the State Government, on the basis of prima facie evidence, have reasons to believe that any person, who held high public or political office has committed the offence, the State Government may, whether or not the Special Court has taken cognizance of the offence, authorise the Public Prosecutor for making an application to the authorised officer for confiscation under this Act of the money and other property, which the State Government believe the said person to have procured by means of the offence. 2. An application Under Sub-section (1)- (a) shall be accompanied by one or more affidavits, stating the grounds on which the belief, that the said person has committed the offence, is founded and the amount of money and estimated value of other property believed to have been procured by means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is judgment, have been acquired by means of the offence and record a finding, accordingly, Under Sub-section (1). (3) Where the authorised officer records a finding under this section to the effect that any money or property or both have been acquired by means of the offence, he shall declare that such money or property or both shall, subject to the provisions of this Act, stand confiscated to the State Government free from all encumbrances. Provided that if the market price of the property confiscated is deposited with the authorised officer, the property shall not be confiscated. (4) Where any share in a Company stands confiscated to the State Government under this Act, then, the Company shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or the Articles of Association of the Company, forthwith register the State Government as the transferee of such share. (5) Every proceeding for confiscation of money or property or both under this Chapter shall be disposed of within a period of six months from the date of service of the notice Under Sub-section (1) of Section 14. (6) The order of confiscation passed under this section shall, subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the role of the Public Prosecutor that has been conferred on him under the Code of Criminal Procedure nor is it necessary to dwell upon, how this Court has time and again dwelt upon the role of the Public Prosecutor. It is because the application that is required to be filed in Sub-section (1) of Section 13 itself postulates the guidelines. The application has to be accompanied by an affidavit stating the grounds on which the belief as regards the commission of the offence and the amount of money and many other aspects. An application has to be filed by the Public Prosecutor. The Public Prosecutor before he files an application Under Sub-section (1) of Section 13, is required to be first satisfied with regard to the aspects enumerated in Sub-section (2). Sub-section (2) obliges the Public Prosecutor that requirements are satisfied for filing the application. In view of the said position, it cannot be said that there is lack of guidance. It is not that the authority has the discretion to get an application filed through the Public Prosecutor or not. It is not that a mere discretion is left to the Public Prosecutor. The authority has only been authorised to scrutinize the offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of whom the application is made to indicate his source of income, earnings or assets out of which he has acquired such money or property. He is entitled to adduce evidence on which he wants to place reliance and is also entitled to furnish other relevant information. Section 15 confers jurisdiction on the Authorised Officer to consider the explanation and the material available before it and proceed to record a finding whether all or any other money or properties in question have been acquired illegally. He is statutorily required to afford reasonable opportunity of being heard to the affected person. He is obliged under the law to declare that such money or property or both shall stand confiscated free from all encumbrances. Sub-Section 5 of Section 15 stipulates that the proceeding for confiscation shall be disposed of within a period of six months from the date of notice issued Under Sub-section (1) of Section 14. The order of confiscation as envisaged Under Section 15(6) is subject to appeal. Mr. R.K. Dash, learned senior Counsel appearing for some of the Appellants would contend that it is a draconian law taking the society back to the dark days. The provisions are critici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complaint which was filed against him Under Section 23 of the Foreign Exchange Regulation Act. 132. Learned Counsel for the State has drawn our attention to another Constitution Bench decision in the State of West Bengal v. S.K. Ghosh AIR 1963 SC 255 : 1963 (2) SCR 111. The factual matrix in the said case was that the Respondent therein was appointed as the Chief Refugee Administrator of Burma Refugee Organisation and he was believed to have embezzled large sums of money belonging to Government which were at his disposal. The prosecution was initiated Under Sections 120-B and 409 of the Indian Penal Code before coming into force the Second Special Tribunal constituted under the Criminal Law Amendment Ordinance, No. 29 of 1943. During the pendency of the case, the Criminal Law Amendment Ordinance 30 of 1944 was passed. The Court took note of the fact that the object of the Ordinance was to prevent disposal or concealment of money or other property procured by means of certain scheduled offences punishable under the Indian Penal Code and one of the offences to which the Ordinance applied was 409 Indian Penal Code apart from other offences. The Respondent was convicted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of forfeiture as contemplated by the 1944 Ordinance had yet to take place, Article 20(1) of the Constitution would apply. The reason for coming to such a conclusion was that 1944 Ordinance had come into force on August 23, 1944, while the real and effective period during which the offence was committed ended with July, 1944 and thereafter forfeiture was not prescribed as a punishment before the 1944 Ordinance. This Court referred to Section 13 of the 1944 Ordinance which deals with the disposal of attached property upon termination of criminal proceeding. The court referred to Section 5 that provides for investigation of objection to attachment and the authority of the District Judge Under Sub-Section 3 of Section 5 to pass an order making the attachment absolute or varying it by releasing a portion of the property from attachment or withdrawing the order. In the said case, the District Judge had made the order absolute and the properties had continued under attachment. The Court referred to Section 3 to opine that there are two kinds of properties which are to be attached. The first property which has been procured by the commission of the offence, whether it be in the form of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender by means of the offence in order that it may comply with the provisions of Section 10 as to the minimum fine to be imposed. We see no reason however why a finding given for the purpose of Section 10 determining the amount of money or the value of other property found to have been procured by the offender by means of the offence should not also be taken as a finding Under Section 12(1) of the 1944 Ordinance. The result of the two findings in our opinion is exactly the same, the only difference being that Under Section 10 of the 1943 Ordinance, as amended in 1945, the court may do this suo moto while Under Section 12(1) of the 1944 Ordinance it has to be done on the representation made by the prosecution. 133. Thereafter the Court noted the reasoning of the other learned Judge and opined that it was not necessary in the said appeal to decide whether the case would come within the ambit of Articles 20(1). This opinion was expressed principally on the ground that the forfeiture provided Under Section 13(3) is not a penalty at all within the meaning of Article 20(1). In that context, the Court analyzed the provisions of the 1944 Ordinance and came to hold that: ...The forfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration. The question that was posed by the Court was whether where a Forest Officer makes a report of seizure of any timber of forest produce and produces the seized property along with a report Under Section 44(2) that he has reason to believe that a forest offence has been committed in respect of such timber or the forest produce seized, could there be simultaneous proceedings for confiscation to the Government of such timber or forest produce and the implements, etc., if the Authorized Officer Under Section 44(2A) of the Act is satisfied that a forest offence has been committed, along with a criminal case instituted on a complaint by the Forest Officer before a Magistrate of the commission of a forest offence Under Section 20 of the Act. Answering the said issue, the Court scrutinized the amended provisions that were brought into force by Act of 1976 and came to hold that: The conferral of power of confiscation of seized timber or forest produce and the implements, etc., on the Authorized Officer Under Sub-section (2A) of Section 44 of the Act on his being satisfied that a forest offence had been committed in respect thereof, is not dependent upon whether a criminal pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trators' and 'adjudicators'. In the proceedings before them, they do not try 'an accused' for commission of any crime (not merely an offence) but determine the liability of the contravener for the breach of his 'obligations' imposed under the Act. They impose 'penalty' for the breach of the civil obligations laid down under the Act and not impose any 'sentence' for the commission of an offence. The expression 'penalty' is a word of wide significance. Sometimes, it means recovery of an amount as a penal measure even in civil proceedings. An exaction which is not compensatory in character is also termed as a 'penalty'. When penalty is imposed by an adjudicating officer, it is done so in adjudicatory proceedings and not by way of fine as a result of 'prosecution' of an 'accused' for commission of an 'offence' in a criminal court. Therefore, merely because 'penalty' clause exists in Section 23(1)(a), the nature of the proceedings under that section is not changed from 'adjudicatory' to 'criminal' prosecution. An order made by an adjudicating authority under the Act is not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord, the whole or any other money or some of the property in question have been acquired illegally and further any money or property or both have been acquired by the means of the offence. After arriving at the said conclusion, the order of confiscation is passed. The order of confiscation is subject to appeal Under Section 17 of the Orissa Act. That apart, it is provided Under Section 19 where an order of confiscation made Under Section 15 is modified or annulled by the High Court in appeal or the where the person affected is acquitted by the special court, the money or property or both shall be returned to the person affected. Thus, it is basically a confiscation which is interim in nature. Therefore, it is not a punishment as envisaged in law and hence, it is difficult to accept the submission that it is a pre-trial punishment and, accordingly, we repel the said submission. 138. The next facet of the said submission pertains to retrospective applicability. The submission has been put forth on the ground that by transfer of cases to the Special Courts under the Orissa Act in respect of the accused persons who are arrayed as accused under the 1988 Act, have been compelled to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with any other punishment), the District Judge may order, without prejudice to any other mode of recovery, that the said fine shall be recovered from the residue of the said attached property or of the security given in lieu of attachment. 139. Learned Counsel for the Appellants would submit that under the 1988 Act the accused were liable to face attachment during trial and forfeiture after conviction but by virtue of the Orissa Act they are compelled to face confiscation as a consequence of which they are deprived of the possession and the property goes to the State Government. Learned Counsel for the State would submit that the forfeiture is provided after the conviction as the property has to be forfeited and embezzled amount requires to be realized but it does not debar the legislature to provide confiscation of property as an interim measure by providing an adequate adjudicatory process. It is also submitted that the offence Under Section 13(1)(e) has its gravity and, therefore, the stringent interim measure is the requisite. Alternatively, it is argued that when forfeiture was prescribed, and attachment of property was provided as an interim measure, different arrangement, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in force at the time of the commission of the offence, as a fine unlimited in extent could be imposed under the section. 141. Thereafter, the Court referred to Maya Rani Punj v. CIT (1969) 1 SCC 445, K. Satwant Singh (supra) and Tiwari Kanhaiyalal v. CIT (1975) 4 SCC 101 and eventually held: ...The order of compulsory retirement is a lesser punishment than dismissal or removal as the pension of a compulsorily retired employee, if eligible to get pension under the Pension Rules, is not affected. Rule 9(vii) was only dealing with reduction or reversion but issuance of any other direction was not a part of it. It has come by way of amendment. The same being a lesser punishment than the maximum, in our considered opinion, is imposable and the disciplinary authority has not committed any error by imposing the said punishment, regard being had to the nature of charges. It can be looked from another angle. The rule-making authority has split Rule 9(vii) into two parts--one is harsher than the other, but, both are less severe than the other punishments, namely, compulsory retirement, removal from service or dismissal. The reason behind it, as we perceive, is not to let off one wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y lack of guidance. We have already opined that the State Government is only required to scrutinize the offence and authorises the Public Prosecutor for the purpose of filing an application for confiscation. The Public Prosecutor, as mandated Under Section 13(2) is required to file an application indicating the reasons on the basis of which the State Government believes that the delinquent officer has procured the property by means of the offence. Thus, reasons have to be stated in the application and it has to be clearly averred that the property has been acquired by means of the offence as defined under the Orissa Act. The authorised officer is a judicial officer and is required to afford reasonable opportunity of hearing to the accused or any other person operating the property on his behalf. Discretion is also conferred on the authorised officer to record a finding whether all or any other money or property in question have been acquired illegally. The said authority can drop the proceedings or direct confiscation of all or some properties. Affording of a reasonable opportunity of hearing is not confined only to file affidavits. We are inclined to think that when the delinque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon an estate or on the land. Encumber means burden of legal liability on property, and, therefore, when there is encumbrance on a land, it constitutes a burden on the title which diminishes the value of the land.... 147. In Sulochana Chandrakant Galande v. Pune Municipal Transport and Ors. (2010) 8 SCC 467 dealing with the word encumbrance , the Court has expressed thus: Encumbrance actually means the burden caused by an act or omission of man and not that created by nature. It means a burden or charge upon property or a claim or lien on the land. It means a legal liability on property. Thus, it constitutes a burden on the title which diminishes the value of the land. It may be a mortgage or a deed of trust or a lien of an easement. An encumbrance, thus, must be a charge on the property. It must run with the property. (Vide Collector of Bombay v. Nusserwanji Rattanji Mistri AIR 1955 SC 298, H.P. SEB v. Shiv K. Sharma (2005) 2 SCC 164 and AI Champdany Industries Ltd. v. Official Liquidator (2009) 4 SCC 486) In view of the aforesaid enunciation of law, the words free from all encumbrances in the provision under assail has to be conferred constricted meaning, for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otection that the material produced before the Authorised Officer shall not be used during trial. If we understand the said provision appositely, it is graphically clear that the materials produced before the authorised officer are not to be looked into during trial, and the trial is to proceed in accordance with the Code of Criminal Procedure and subject to the provisions of the 1988 act as long as there is no inconsistency. The trial Judge is a senior judicial officer and has a trained judicial mind. If something is not to be looked into, it shall by no means be looked into. The constitutional protection Under Article 20(3) is in no way affected. That apart, Article 20(3) of the Constitution speaks about the guarantee against testimonial compulsion . In the case of M.P. Sharma v. Satish Chandra AIR 1954 SC 300 the court has observed thus: Broadly stated the guarantee in Article 20(3) is against testimonial compulsion . It is suggested that this is confined to the oral evidence of a person standing his trial for an offence when called to the witness-stand. We can see no reason to confine the content of the constitutional guarantee to this barely literal import. So to limit i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, and stay order, if any, passed in an appeal shall not remain in force beyond the prescribed period of disposal of appeal. (underlining is ours) 154. Learned Counsel for the Appellants have seriously criticised Section 17(3) on the ground that the said provision interferes with the judicial proceeding by laying down that the said order shall not remain in force beyond the prescribed period of disposal of appeal. It appears that such a contention was not raised before the High Court, for the High Court has not dealt with the same. However, Mr. S.K. Padhi, learned senior Counsel for the Respondent-State, would submit that in the Orissa Special Courts Act, 1990 (Orissa Act 22 of 1992) contained a similar provision and the Division Bench in Kishore Chandra Patel (supra) construed the said provision by opining that the provision in Section 18(3) limiting the operation of stay order, if any, passed in appeal for a period of three months does not prohibit passing of a fresh stay order beyond that period, if a case for the same were to be made out to the satisfaction of the Court. At this stage, we may note with profit that the High Court of Patna has dealt with Section 17(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at has to be placed would be that the High Court while exercising the power of appeal can extend the period of stay subject to its satisfaction unless there is justifiable reason for vacating the say. This provision, needless to say, has to be read in this manner to save it from the vice of unconstitutionality. However, we may clearly state that the High Court being a superior court having the power of judicial review shall see to it that the real purpose of the legislation is not defeated. It will be advisable and that the Chief Justice should demarcate a Bench for one day to hear these appeals. And accordingly, we so request. Needless to say, the learned Judge will endeavour to dispose of the appeal within the time frame. 155. Learned Counsel for the Appellants have seriously criticized the proviso appended to Section 18(1) of the Orissa Act. To appreciate the assail, Section 18(1) is reproduced in entirety: Section 18(1). Where any money or property or both have been confiscated to the State Government under this Act, the concerned authorised officer shall order the person affected, as well as any other person, who may be in possession of the money or property or both to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corruption and conceive of protection to his dwelling house after a finding is recorded in the proceeding for confiscation that it is constructed or purchased by way of corrupt means. The person concerned can satisfy the authorised officer or in appeal that the dwelling house where he is residing is acquired from his known sources of income. In such a situation, we are afraid that we cannot accept the submission advanced by the learned Counsel for the Appellants and, accordingly, the same stands rejected. 156. The next provision which is challenged is Section 19 of the Orissa Act that deals with refund of confiscated money or property in the event of the order of confiscation being modified or annulled by the High Court in appeal. The said provision is necessary to be reproduced: 19. Refund of confiscated money or property. - Where an order of confiscation made Under Section 15 is modified or annulled by the High Court in appeal or where the person affected is acquitted by the Special Court, the money or property or both shall be returned to the person affected and in case it is not possible for any reason to return the property, such person shall be paid the price thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ill-gotten property or money do not enjoy the property or money during trial. That apart, the intention is also clear that the Government should not appropriate the money or the property to itself in any manner. Confiscation, we have already opined, is done as an interim measure. The words free from all encumbrances have been given a restricted meaning by us as it follows from the language used in the Orissa Act. Section 19 clearly lays down return of the confiscated money or property or both. It conceives of three situations, namely, modification of the order of confiscation, or annulment of confiscation, or the eventual acquittal. In these conditions, the money or property or both are required to be returned. The words, which we have underlined in Section 19, seem to us, cannot be conferred a wide meaning. They cannot be allowed to convey that the State will not return the property. The key words are in case it is not possible and for any reason . It will be an assumption to think that for any reason would mean any kind of subjective reason. In certain statutes or enactments the words for any reason can be attributed a wide meaning to subserve the legislative purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herever required we have adverted to the same while dealing with the Orissa Act. Barring the same, we do not find there is any distinction between the two enactments and, therefore, analysis made by us as regards the Orissa Act will apply to the Bihar Act. 160. It is significant to note here that before the High Court of Patna the validity of a Rule was assailed but the application was not pressed and the High Court has made certain observations. We intend to put the controversy to rest. Rule 12 of the 2010 Rules provides for Special Courts to follow summary procedure. Rule 12(a) and (f) read as under: (a) On institution of a case or transfer of pending proceeding to the Special Courts, trial shall be held in summary manner. (f) The delinquent public servant shall be put on trial and shall be afforded opportunity to lead evidence in support of his defence. If the special court, on the evidence of delinquent public servant is, prima facie, satisfied that he has been able to discharge his onus, the prosecution shall be called upon to lead its evidence to prove the charges against the delinquent public servant. 161. When the Bihar Act provides to follow the warrant proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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