Case Note & Summary
The dispute arose from complaints under Section 138 of the Negotiable Instruments Act, 1881 filed by Respondent No.2, a company, against the Petitioner company and its director, Dinesh Singh Lakra. During the pendency of the complaints, the Magistrate issued a proclamation and attached a flat belonging to the accused under Section 83 of the Code of Criminal Procedure, 1973. The attachment was effected in January 2008. Subsequently, the complainant instituted a summary civil suit for recovery of money, and the same flat was attached before judgment. While both proceedings were ongoing, the accused Dinesh Lakra executed a registered agreement in favour of his wife, Sonia Singh. She filed an application under Section 84 CrPC seeking release of the property, but it was rejected on the ground that she had no locus standi, and the revisional court upheld that order. In October 2019, the parties compromised all disputes; the complainant withdrew the criminal complaints, and the accused were acquitted under Section 138 of the NI Act. Consent terms were filed in the civil suit, and the City Civil Court lifted the attachment and directed the Registrar to hand over possession to the director. Immediately thereafter, the petitioners filed an application under Section 85 CrPC for release and restoration of the attached property. The complainant conveyed no objection. However, the Metropolitan Magistrate rejected the application on two grounds: (i) an earlier identical application had been rejected and the order was upheld, and (ii) the court had no jurisdiction to restore the property after lapse of two years from the date of attachment. The petitioners challenged this order before the Bombay High Court under Article 227 of the Constitution and Section 482 CrPC. The sole legal issue before the High Court was whether the right to seek release under Section 85 CrPC stands extinguished if the application is made beyond two years from the attachment. The Court analysed the scheme of Section 85 and held that Sub-section (3) of Section 85, which prescribes a two‑year period, applies only to claims asserting that the property was not liable to attachment at the time it was attached. Once the criminal case terminates in acquittal or dismissal, a fresh right to claim restitution accrues to the person entitled to possession, and Section 85(1) does not prescribe any limitation for such an application. The Court further found that the earlier rejection of Sonia Singh’s application, decided on the merits of her locus and not on title, could not operate as res judicata against the present petitioners. The High Court accordingly set aside the impugned order, allowed the writ petitions, and directed the trial court to release and restore the property to the petitioners subject to payment of outstanding society charges and dues. The Collector, Thane, was ordered to remove the seal and hand over vacant possession within four weeks.
Headnote
A) Criminal Procedure Code, 1973 - Attachment of Property - Section 85 CrPC - Limitation for Application After Acquittal - The Bombay High Court held that no limitation is prescribed under Section 85 of the Code of Criminal Procedure, 1973 for making an application for release of property after the case ends in acquittal or dismissal; the two-year period mentioned in Section 85(3) applies only to claims contesting whether the property was liable to attachment at the time it was attached; once an accused is acquitted, the right to claim restitution of the attached property arises and may be exercised under Section 85(1) without time limit; earlier rejection of a claim under Section 84 by a third party (wife) on the ground of no locus does not bar a fresh application by the owner under Section 85. (Paras 10-15)
Issue of Consideration
Whether the right of the Petitioners to seek release of property under Section 85 of Cr.P.C. beyond two years from the date of its attachment stands extinguished?
Final Decision
The writ petitions are allowed. The impugned order dated 21 November 2019 is set aside. The Metropolitan Magistrate is directed to release and restore flat no. 302, Golden Empire Co-op. Housing Society, Mira Road, to the petitioners subject to payment of outstanding society charges and dues. The Collector, Thane, is directed to remove the seal and hand over vacant possession within four weeks.
Law Points
- Section 85 CrPC does not prescribe limitation for restoration application after acquittal
- two-year limit under Section 85(3) only applies to claims contesting liability at the time of attachment
- right to restitution arises upon termination of criminal proceedings
- earlier rejection of application by third party without locus does not bar fresh application by owner
- no power of review for magistrate but fresh application under Section 85 allowed
- attachment under Section 83 does not survive after acquittal
Case Details
2021 LawText (BOM) (11) 20
Writ Petition No. 6107 of 2019 alongwith Writ Petition Nos. 6104, 6105 and 6106 of 2019
Mr. Ashok M. Saraogi, Mr. A.R. Patil (APP)
M/s. J.B.D. Finance and Investment Ltd., J.B.D. Marketing, Mr. Dinesh Singh Lakra
State of Maharashtra, Sampark Marketing Advertising Pvt. Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Criminal writ petitions under Article 227 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973, challenging the rejection of an application for release and restoration of property attached under Section 83 CrPC in cheque bounce cases after the accused were acquitted.
Remedy Sought
Petitioners sought to set aside the order dated 21 November 2019 passed by the Metropolitan Magistrate, and to direct the release and restoration of flat no. 302, Golden Empire Co-op. Housing Society, Mira Road, along with directions to the Collector, Thane, to remove the seal and hand over possession.
Filing Reason
The Metropolitan Magistrate rejected the petitioners' application under Section 85 CrPC on the grounds that an earlier identical application by a different party had been rejected, the court had no power to review, and the court lacked jurisdiction to restore the property after a lapse of two years from the date of attachment.
Previous Decisions
Earlier, Sonia Singh (wife of director Dinesh Lakra) moved an application under Section 84 CrPC for release, which was rejected on 8 October 2013 on the ground of no locus; the revisional court confirmed the rejection. The criminal complaints under Section 138 NI Act were withdrawn and the accused acquitted on 19 October 2019. In the civil summary suit, consent terms were filed and the City Civil Court lifted the attachment and directed restoration of possession to the director.
Issues
Whether the right of the Petitioners to seek release of property under Section 85 of Cr.P.C. beyond two years from the date of its attachment stands extinguished?
Submissions/Arguments
The petitioners argued that Section 85 CrPC does not prescribe any limitation for filing an application after the termination of the criminal case, and the two‑year period under Section 85(3) applies only to claims that the property was not liable to attachment at the time it was attached. They further contended that the earlier rejection of Sonia Singh’s application was on the ground of lack of locus and could not bar a fresh application by the true owner. The complainant (Respondent No.2) recorded no objection to the release. The State informed the Court that the property was under lock and key since 2008 and had not been disposed of.
Ratio Decidendi
Section 85 of the Code of Criminal Procedure, 1973 does not prescribe any period of limitation for making an application for release of property attached under Section 83 after the criminal case ends in acquittal or dismissal. The two‑year period under Section 85(3) is restricted to claims asserting that the property was not liable to attachment at the time of attachment. The right to claim restitution of property accrues upon the termination of criminal proceedings in acquittal or dismissal, and no time limit applies to such claims. An earlier rejection of an application by a third party who lacked locus standi does not operate as res judicata barring a fresh application by the true owner.
Judgment Excerpts
Whether the right of the Petitioners to seek release of property under Section 85 of Cr.P.C. beyond two years from the date of its attachment stands extinguished? (Para 11)
Such right [to claim restitution] accrues to the person upon conclusion of the trial... Section 85 of the Code does not prescribe any period of limitation to make an application for restoration of the property, after the criminal case has ended either in acquittal or dismissal... (Para 13)
Procedural History
2005-2006: Complaints under Section 138 NI Act filed against Petitioner company; proclamation and attachment of flat under Section 83 CrPC ordered; attachment effected on 28-01-2008. 2012: Complainant filed summary suit in City Civil Court; property attached before judgment. 08-10-2013: Sonia Singh’s application under Section 84 CrPC for release rejected; revisional court confirmed rejection. 10-10-2019: Consent terms filed in civil suit; attachment lifted by civil court with direction to hand over possession to director. 19-10-2019: Complainant withdrew criminal complaints; accused acquitted. 22-10-2019: Petitioners filed application under Section 85 CrPC for release and restoration. 21-11-2019: Metropolitan Magistrate rejected application. 2019: Present writ petitions filed. 07-09-2021: Matters reserved for judgment. 16-11-2021: Judgment pronounced allowing writs.
Acts & Sections
- Code of Criminal Procedure, 1973: 83, 84, 85, 482
- Negotiable Instruments Act, 1881: 138
- Constitution of India: 227
