Madras High Court Calls For Mandatory Attachment Of Properties Suspected To Be Acquired Through Corruption, Suggests Amendment To PC Act

Justice B Pugalendhi observed that such a strong and deterrent measure will put fear in the minds of officials, who otherwise enjoy the fruits of corruption.

“In these circumstances, this Court is of the view that necessary amendments have to be carried out under the Prevention of Corruption Act 1988 and the attachment of properties, believed to have been obtained through corrupt means and using amassed wealth disproportionate to known sources of income, has to be made mandatory. Only if such strong and deterrent measures are prescribed under the Act itself, the Government can effectively undertake the attachment of properties and put a fear in the minds of those officials, who are enjoying the properties obtained using corrupt means. Otherwise, the provisions would merely remain on paper and without any deterrent effect. This Court hopes that the Government takes the initiative in this regard and suitable amendments are introduced under the Prevention of Corruption Act 1988, as suggested above,” the court said.

The court noted that some special legislations like the NDPS Act, Mines and Minerals Act etc mandated attachment of properties to prohibit offenders from holding the illegally acquired properties. The court added that corruption should be treated even more seriously and thus attachment of properties was necessary to combat the vice of corruption.

“The above provisions under the Special Acts provide for mandatory attachment and confiscation of properties, considering the seriousness of the offences involved. Certainly, corruption and corrupt practices have to be treated more seriously, than any other offence and as such, mandatory attachment and confiscation is essential to combat the vice of corruption, which has affected each and every part of our society,” the court said.

The court was hearing appeals filed by individuals against an order of the Special Court for trial of cases under the Prevention of Corruption Act, ordering the confiscation of properties in connection with an alleged corruption case.

The first accused in the corruption case was a Sub-Registrar who was accused of amassing assets disproportionate to his income in his name and that of his wife, who was the second accused. After trial, the Special Court had found the couple guilty and sentenced them to 5 years' rigorous imprisonment and a fine.

The Special Court also passed an order under Section 452 of CrPC, confiscating the properties of the couple. This confiscation order was challenged in the present case by appellants, who claimed to be Bonafide purchasers of the properties confiscated by the trial court.

The individuals claimed that they had purchased the properties before registration of FIRs and that the confiscation order was made without hearing them, in violation of principles of natural justice. It was also argued that the confiscation order was made without an order of attachment, which was not sustainable under law.

The parties argued that the Prevention of Corruption Act did not have any provision for attachment of properties. It was further argued that the Vigilance Manual provided for attachment of properties and the same could be done only by invoking the provision of the Criminal Law (Amendment) Ordinance 1944. In the present case, the appellants submitted that the properties were not attached as per law and thus the Special Court was not justified in passing the order of confiscation. Thus, it was argued that the confiscation order was liable to be set aside.

The State submitted that though the Prevention of Corruption Act does not deal with attachment of properties, an attachment could be made by the trial court under Section 452 of CrPC. It was also submitted that the accused persons were aware of the enquiry pending against them and had still alienated the properties in a mala fide manner.

The court noted that provision with respect to attachment and confiscation of properties was inserted in the Prevention of Corruption Act with effect from July 26, 2018. Prior to this, the offences punishable under the Prevention of Corruption Act, 1988, were included as Scheduled Offences under the Criminal Law (Amendment) Ordinance. The court also noted that the Special Judge was also enabled to exercise powers and functions exercisable by a District Judge under the Ordinance.

The court also noted that though Section 452 CrPC empowered the court to order confiscation of property upon completion of trial, when such property was neither produced before the court nor in its custody, the power could not be invoked merely because the property was connected with the offence.

In the present case, the court noted that there was no attachment order under the Criminal Law (Amendment) Ordinance and thus, the order of confiscation could not be sustained. Thus, the court set aside the order of the Special Court, confiscating the property of the accused. The court, however, gave liberty to the investigating agency to approach the appellate court, where the appeal against the Special Court's conviction was pending, to seek appropriate orders for attachment of properties as per law.

However, considering the delay involved in the cases, which permitted the accused to transfer substantial portions of the property in the absence of an attachment order, the court deemed it fit to suggest amendments to the law, making attachment of property mandatory in corruption cases.