9911796707
TMI Blog2009 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... FERDINO I. REBELLO D.G. KARNIK, JJ. Mr. P.S. Jetly for the applicant. Mr. V. Shridharan with Mr. Jai Sanghvi i/b DSK Legal for the respondent. [Judgment Per Ferdino I. Rebello, J.]. - This is an application by the Revenue praying that on the following question the learned Tribunal be directed to make a reference to this Court. We may gainfully reproduce the said question. "Whether the CEGAT is correct in holding that the earnest money received before 15 th June 1998 (date of passing of the adjudication order by AC/Drawback) by M/s Gems Nuts and Produce Exports Co. Pvt. Ltd. from M/s Utopian Financial Solution Pvt. Ltd. would not fall within the scope of Rule 4 (Customs Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 on the ground that "the liability of Bangard and his companies to repay the money of drawback that he has received arose only after the order of 15 th June 1998 of the Assistant Commissioner", the fact that such money was fraudulently obtained not having been disputed by the CEGAT.? 2. In order to answer the issue, a few facts will have to be noted. The respondent is an owner of a building. One Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court refused to entertain the writ petition. 6. The respondent along with M/s Ankit Constructions Pvt. Ltd. and Kishore Jagjivandas Tanns preferred a Petition for Special Leave to Appeal before the Supreme Court. Leave was granted and Civil Appeal No.4728 of 1999 came to be filed which was disposed of by an order dated 24 th August 1999. By that order, the respondent no.1 and M/s Ankit Constructions Pvt. Ltd. were directed to deposit an amount of Rs.90.93 lacs within 6 weeks from that date and on such deposit, the attachment levied on the premises which was a subject matter of the present application was to stand raised forthwith. From the said sum, the respondent pointed out that it had no claim on the sum of Rs.45,46,500/. Liberty was given to the respondent to withdraw that amount subject to the rights of M/s Utopian Financial Solution Pvt. Ltd., if any, which could be established by the respondent no.3 therein in appropriate proceedings. The balance amount was to be invested in fixed deposit. Further, liberty was given to the respondent to take appropriate proceedings which it may be entitled to in law for challenging the orders dated 24 th November 1997, 2 nd Dece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Commissioner (Appeals) proceeded solely on the basis that the earnest money paid by Smt. Vinita Lakhotia was out of the money wrongly received as drawback and therefore the amount was liable to attachment. It noted the contentions but did not answer them as in the opinion of the Tribunal, the attachment was not covered by the Rules. It noted that the applicant was aware of the fraud only on 16 th October 1997. The agreement was entered into on 17 th July 1997 and the earnest money was paid on the said date. As such, on that date the respondent could not have known that the money was tainted or illegally obtained. Further, there was nothing on record to suggest that the applicant knew that the money was fraudulently received. It proceeded to hold that the sum the respondent received prior to this date therefore would not fall within the scope of the order passed under Rule 4 and hence recoverable in terms of the Rules and accordingly allowed the appeal and set aside the order of the Commissioner (Appeals). 10. Reference by the Revenue is in respect of the said order. We may only reiterate as noted by the Tribunal that the agreement for sale was entered into o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers before it could file an appeal to the Appellate Tribunal under section 129A of the Customs Act. Against the order of the Commissioner of Customs (Appeals), a revision was filed under section 129DD of the Customs Act. That was dismissed by the Secretary on the ground that it was not maintainable and that is how a petition came to be filed before this Court. This Court on consideration of the provisions was pleased to hold that an appeal would lie under section 129A of the Customs Act. In our opinion, this answers the issue insofar as jurisdiction is concerned. 13. We then come to the question as to whether the applicant has made out a case for reference. We may gainfully refer to a judgment of the Supreme Court in Commissioner of Income Tax v. Chander Bhan Harbhajan Lal, (1966) 60 ITR 188 (SC), where the Supreme Court was pleased to observe that the question of law raised is not substantial and the answer to the question is selfevident. Similarly, in Commissioner of Income Tax v. Indian Mica Supply Co. (P) Ltd., (1970) 77 ITR 20 (SC), the Supreme Court was once again pleased to observe that when the matter is selfevident the High Court was fully justified in declini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, (a) .......... (b) .......... (c) if the amount cannot be recovered from such person in the manner provided in clause (a) or clause (b) (i) ....... (ii) the proper officer may, on an authorisation by Commissioner of Customs and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus, if any, to such person." 16. Perusal therefore would show that monies can be recovered through attachment of any movable or immovable property belonging to or under the control of such person. Section 142, as noted earlier, starts with the word "any sum payable by any person". Therefore, it could be contended that the expression "any person" considering the expression "under the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer a better title than he himself possesses: Nemo at quod non habat. To this there are some exceptions; one of which arises out of the rule of the law merchant as to negotiable instruments. These, being part of the currency, are subject to. the same rule as money: and if such an instrument be transferred in good faith, for value, before it is overdue, it becomes available in the hands of the holder, notwithstanding fraud which would render it unavailable in the hands of a previous holder." In the instant case, the Appellate Tribunal had recorded a finding of fact that at the time the money was paid by way of any earnest money deposit, the applicants themselves were not aware of the fraud and as such the respondent would not be aware that the money received was a part of the fraud. The money must have been paid by cheque or draft as the law requires such payment to be so done. Considering the ratio of the Supreme Court in State Bank of India (supra), it is thus material to show that the respondent had knowledge of the fraud and, therefore, that money could be recoverable in the hands of the respondent. Even otherwise, what is attached is not the money but the immovable property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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