Abkari Act| Notice Of Confiscation Proceedings Need Not Be Served Upon Person From Whom Property Is Seized If Already Issued To Its Owner: Kerala HC

The Kerala High Court recently held that the authorised officer exercising power under Section 67B(2) of the Abkari Act need not issue a notice of confiscation proceedings to the person from whom the property has been seized before ordering the confiscation if he is not the owner of the property.

A Division Bench of Justice P.B Suresh Kumar and Justice C.S Sudha observed:

"It can thus be seen that what is intended by the statute by the expression "the person from whom the same is seized" is that no order confiscating any property shall be made unless notice is given either to de facto or de jure owner of the property, as the case may be, and the Act does not provide for notice to any person other than the de facto or de jure owner of the property. Needless to say that the Act does not provide for notice to the person from whom the property sought to be confiscated has been seized, if he is neither the de facto nor the de jure owner of the property."

Brief Facts: 

Back in 2017, a few men were travelling in a car when they were stopped by the Police at Chalakkayam. 

Soon, their vehicle was seized alleging that they were carrying 3.3 litres of Indian Made Foreign Liquor intended for sale in Telangana, flouting the Government Order issued under Section 9 of the Abkari Act prohibiting the transportation of liquor within the Chalakkayam Excise Range.

Accordingly, a crime was also registered against them under Sections 55(a) and 58 of the Act r/w Rule 9 of the Foreign Liquor Rules and Section 118(e) of the Kerala Police Act.

Since the car belonged to the wife of one of these men, she was charged with these offences as well. She hails from Telangana and is the respondent herein. 

The police officer who detained the vehicle later produced it before the Deputy Commissioner of Excide under Section 67B(2) of the Act. The Deputy Commissioner then ordered the confiscation of her vehicle after issuing notice to the respondent. 

Aggrieved by this, she appealed against this order but the Additional Commissioner of Excise affirmed the earlier decision.  Challenging both these orders, the respondent filed a petition before a Single Judge.

The Single Judge took the view that according to Section 67C(1), the Deputy Commissioner should have issued notice to the person from whom the car was seized before ordering its confiscation.  Since this was not complied with, the orders were set aside and the authorised officer was directed to consider the matter afresh after issuing notice to the respondent's husband as well. 

Assailing this order of the Single Judge, the authorities moved the Court with an appeal. 

Arguments Raised: 

Special Government Pleader V. Manu argued that the view of the Single Judge was unsustainable since the expression "the person from whom the same is seized" in Section 67C(1) would include the owner of the property as well. 

He added that the Act does not contemplate notice to be given to the person from whom the property is seized if he is not the owner of the property.

It was submitted that since the respondent herein was issued with a notice, the Single Judge was not justified in holding that there was non-compliance with Section 67C(1).

On the other hand, Advocate Nandagopal S. Kurup appearing for the respondent supported the judgment, pointing out that in proceedings under Section 67B(2), notice to the person from whom the property has been seized is necessary. 

Findings: 

The Court prima facie agreed with the appellants herein and thereby decided to hear the case on merits rather than remitting it back to the Single Judge. 

"Kerala is not a State where sale and consumption of liquor is prohibited. Section 9 of the Act confers power on the State Government to prohibit transportation of liquor from any local area into another local area by notification... in and around religious places during festive seasons by notification. One would not know normally about the notifications of this nature unless he/she belongs to the area concerned, though one is presumed in law to know about such notifications."

The Court noted that one of such notifications was issued by the State in connection with Sabarimala pilgrimage from 12.11.2017 to 20.01.2018 to maintain tranquility in the area.

It was held that even though it is alleged in the impugned orders that boards were exhibited in the area about the notification issued under Section 9, it is difficult to attribute knowledge about such notifications to persons coming from different States.

Whether the authorised officer is obliged under Section 67B(2) to issue notice to the person from whom the property has been seized before ordering its confiscation if he is not the owner of the property?

The only provision in the Act providing for notice in confiscation proceedings is Section 67C(1), which only provides that no order of confiscation shall be made unless the person from whom it is seized is given notice of the proceedings.

The Court noted that although Section 67C(1) does not specifically provide for notice to the owner of the property, Section 67C(2) provides that no order of confiscation shall be made if its owner convinces the authorised officer that it was used in carrying the contraband without the knowledge or connivance of the owner/agent/person in charge and that each of them had taken all necessary precautions against such use.

Since it may not be easy for the authorised officer to identify the ownership of all properties, notice of the confiscation proceedings could be served only on the person from whom the property is seized, treating him as the owner of the property.

Upon perusing the provision, the Court noticed that the Abkari Act only intended that a notice be served upon either the de facto or de jure owner of the property.

In fact, since the Act did not provide for issuing notice to any person other than the de facto or de jure owner of the property, it was held that a notice to the person from whom the property has been seized was not necessary if he is neither its de facto nor de jure owner.

Therefore, this question was answered in the negative. 

Other Relevant Observations: 

• Possession of Indian Made Foreign Liquor intended for sale in another State will not by itself make out the offence punishable under Section 58 of the Act, unless it is shown that the possession of the liquor was with the knowledge that the same has been unlawfully imported. 
• Merely for the reason that a person is found to be in possession of Indian Made Foreign Liquor intended for sale in another State, it cannot be concluded that he has brought the same into the State from a place outside the State.  

Accordingly, the Court found this to be a fit case where the authorised officer ought to have exercised discretion not to order confiscation of the vehicle worth several lakhs of rupees for the offences alleged to have been committed by means of the vehicle.

As such, the orders directing confiscation of the vehicle were set aside and the appellants were directed to release the car to the respondent forthwith. 

Case Title: State of Kerala v. Navaru Swapna Reddy  

Citation: 2022 LiveLaw (Ker) 51

Click Here To Read/Download The Order