The Adjudicating Authority Vs M/s. Anuttam Academic Institutions (Madras High Court)
Facts- During the year 2017, a search was conducted in the premises of Marg Group of companies and its related entities, which resulted in seizure of various documents allegedly indicating the prohibited transactions as per clause A of section 2(9) of the Act. Therefore, a notice dated 26.04.2018 u/s 24(1) of the Act was issued by the second appellant to the respondent herein, calling upon them to show cause as to why they should not be treated as benamidar of the parent company called M/s.Marg Limited, who is the beneficial owner of the land measuring about 17.702 acres at Muttam Village, Nagore Vattam, having been purchased in the years 2009 and 2010 by availing loan from M/s.Great Meera Finlease Private Limited, a Non-banking financial company incorporated solely for the purpose of routing the funds of Marg group of companies and such fund was also flown from the another shell company viz.,
M/s.Arohi Infrastructure Pvt.Ltd., which is incorporated as a subsidiary of M/s.Marg Limited.
An order dated 20.07.2018 was passed provisionally attaching the property of the respondent company u/s 24(4)(b)(i) of the Act.
Upon receiving the reference u/s 24(5) of the Act from the second appellant, the first appellant issued a notice dated 14.08.2018 under Section 26 (1) of the Act. The first appellant, after affording sufficient opportunities to the respondent and considering the material evidence placed, passed an order dated 26.08.2019 in terms of Section 26 (3) of the Act, confirming the provisional order of attachment passed by the second appellant inter alia holding that the subject matter of the property is a benami property and the transaction is a benami transaction, in which the respondent is the benamidar of the beneficial owner M/s. Marg Limited.
Before the Learned Judge, it was mainly contended on behalf of the respondents that the orders dated 26.08.2019, 27.08.2019 and 28.08.2019 passed by the first appellant are barred by limitation.
Conclusion- The principle that an order takes effect only on the date of communication of the order and not immediately on passing of the order, if there is any time lag between the date of passing of the order and the date of actual communication of the order, by itself cannot be understood to have a bearing on the very validity of the orders passed by the Adjudicating Authority under section 26 (3), on the premise that the orders have been passed on 26/27/28.08.2019 within the period as mentioned under sub section 7 of section 26, which was duly recorded in the Register maintained by the authority as ‘order is passed accordingly’. Therefore, the delay occurred for preparation of certified copies of the order, after getting notarisation from the Administrative Officer-cum-Registrar, on 04.09.2019 and 11.09.2019 and the same were booked for despatch on 12.09.2019 and 13.09.2019 to the respondents, is only procedural lapse and the same cannot be understood as postponing the date of making the orders so validly passed by the first appellant / Adjudicating Authority, so as to invalidate the same.
It is legally correct that if an order remains within the control of an authority beyond the period of limitation stipulated, there is a possibility that such an order might be modified or altered even beyond the stipulated period, thus compromising the limitation prescribed. Whereas in the present case, there was not a single case, but a batch of 69 cases with each order running to hundreds of pages as contended by the learned counsel for the appellants, the period of 15 days from the date of passing of the orders to the date of dispatch (which period was consumed for preparation of certified copies in triplicate), would certainly appear to be a reasonable period. The assumption that such period would create possibility for modification or alteration of the substance of the orders, can at best be said to be rooted in suspicion and conjecture without having any basis in reality, in the facts and circumstances of the case.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
For the sake of convenience, the judgment is divided into the following heads:
