When First Reference Is Made, Duplicate Records Of Property Attached Under Gangster Act Must Be Retained For Future Release Application: Allahabad HC
The Allahabad High Court has directed the State Government to ensure that when a reference for release application of property attached under the U.P. Gangster and Anti-Social Activities (Prevention) Act, 1986 is made by the competent authority to a court of law, a duplicate copy of the original records must be retained by the competent authority to deal with any other release application...
The Allahabad High Court has directed the State Government to ensure that when a reference for release application of property attached under the U.P. Gangster and Anti-Social Activities (Prevention) Act, 1986 is made by the competent authority to a court of law, a duplicate copy of the original records must be retained by the competent authority to deal with any other release application which is made.
Noting that the Gangster Act did not provide a solution in circumstances when the original records had already been transmitted to the Court by the competent authority and another application for the release of property was presented before it, the bench of Justice Mahesh Chandra Tripathi and Justice Kshitij Shailendra held
“the State Government should take immediate appropriate measures so that in every case where the competent authority, for the first time, refers the matter to the court having competence to deal with the release aspect as per Sections 15, 16 and 17 of the U.P. Gangster and Anti-Social Activities (Prevention) Act, 1986, a complete duplicate photostat copy of the case file be retained by the authority in his office and whenever further representations seeking release come up before the authority, aid of the previous proceedings be taken.”
Case Background
Pursuant to proceedings against one Rajkumar under the Gangster Act, the property on which 7 vehicles financed by petitioner, M/s Mahindra & Mahindra Financial Services Ltd., were parked was attached. Due to multiple defaults on loan repayment of the vehicles was made, representative of the petitioner approached the borrower and found out that the vehicles had been seized.
Subsequently, petitioner approached the Commissioner seeking release of the vehicles, however, the request was rejected. Consequently, petitioner approached the High Court on grounds that the Commissioner had no jurisdiction to reject such application. It was argued that the Commissioner can either release the vehicles or refer the case to the Court having jurisdiction to try an offence under the Act if he is of the opinion that the property should not be released.
Additional Advocate General pointed out that reference had already been made by the Commissioner. To this, the counsel for petitioner filed a supplementary affidavit pointing out that though reference was made 2 months prior to passing of the impugned order, there was no mention of the same in the order.
The AAG also argued that the limitation for filing application for release was 3 months, whereas the petitioner approached after 3 months. Therefore, the application for release was rightly rejected by the Commissioner, even though it was not rejected on grounds of being barred by limitation. To this, counsel for petitioner submitted that the application was filed within three months from the date when the petitioner came to know of the attachment.
High Court Verdict
Section 15 of the Gangster Act provides the procedure for release of property attached under the Act. It provides that when an application for release is made within 3 months from the date of “knowledge” of the attachment, the District Magistrate may consider the same and after being satisfied with the “genuineness”, hand over the property.
Section 16 of the Act provides a situation where no application is made within 3 months or the District Magistrate is not satisfied to release the property, then such case shall be referred to a Court having jurisdiction to try an offence under the Act along with the report of the District Magistrate. Section 16 further provides the procedure to be adopted by such Court. Section 17 provides the order to be passed by the Court after inquiry.
The Court observed that Section 16(3) of the Act requires the Court to give notice to the person who made the application for release of attached property and to any other person whose interest appears to be involved in the case.
It held that once the file was transferred to the Court while making reference, the Commissioner had become functus officio and could not have decided the release application moved by the petitioner.
“Possibility of there being numerous identical claimants cannot be ruled out and, therefore, if, on account of non-compliance of provisions of Section 15(1) of the Act or for any other reason, a reference is made by the authority to the Court concerned, a situation may arise that there remains no record available before the authority in relation to the case in which release of the property is sought.”
In such situations, the Court observed that because of lack of previous records, the competent authority will not have access to previous records of proceedings to form an informed decision on the subsequent release application(s).
“In such an event, the authority may commit a glaring error not referable to his administrative/quasi judicial wisdom but only on account of lack of knowledge of previous proceedings including a reference already made and the reasons behind the same.”
The Court held that once the records are transmitted to the Court, there is no provision in the Act or Rules thereunder for retaining any copies of the file for the competent authority to take action in subsequent release applications.
Accordingly, the Court directed the State Government to ensure that a duplicate copy of the entire proceedings is retained by the competent authority. The Court further directed that with each representation that is made before the competent authority, entire records of proceedings regarding the case shall be placed before it.
“Such measures, if taken, shall certainly rule out not only institution of proxy or collusive proceedings but also prevent abuse of process of law so that no order is obtained by misleading the authority in absence of complete record.”
Partly allowing the writ petition, the Court directed that petitioner's representation be placed before the Court before which the reference was pending.
Case Title: M/s Mahindra & Mahindra Financial Services Ltd., vs. State of U.P. and 2 others 2025 LiveLaw (AB) 85 [CRIMINAL MISC. WRIT PETITION No. - 1126 of 2025]
Case citation : 2025 LiveLaw (AB) 85
Counsel for Petitioner :- Kartikeya Saran, Srishti Gupta
