PC Act properties cannot be confiscated under CrPC without following the 1944 Ordinance process, Madras High Court rules

Accused Nos. 1 and 2—a Sub-Registrar and his wife—were convicted in Special Case No. 91 of 2011 for possessing assets disproportionate to the officer’s known sources of income.

The trial court also confiscated properties under Section 452 CrPC.

The present appellants, claiming to be subsequent bona fide purchasers of some of those properties, challenged the confiscation; they also argued that the properties had not been attached under the Criminal Law (Amendment) Ordinance, 1944.

The Vigilance Department confirmed that no attachment had been made in this case.

1. Whether the Special Judge could confiscate the properties under Section 452 CrPC when they had not been attached under the Criminal Law (Amendment) Ordinance, 1944.

2. Whether Section 452 CrPC permits confiscation of property that was neither produced before the court nor in its custody, merely because it is connected with the offence.

3. Whether the appellants’ claims as bona fide purchasers required a separate determination in these appeals.

Section 452 CrPC empowers a criminal court, at the conclusion of an inquiry or trial, to make orders concerning the disposal of property within the provision’s scope; it cannot be used merely because property is connected with an offence where the property was neither produced before the court nor in its custody.

Section 4(2) CrPC makes the Code applicable to offences under other laws, subject to contrary or specific provisions in the relevant enactment.

Under Section 5(6) of the Prevention of Corruption Act, 1988, a Special Judge may exercise the powers and functions of a District Judge under the Criminal Law (Amendment) Ordinance, 1944; Section 18A of the Act, introduced in 2018, applies the Ordinance to attachment, administration of attached property, and execution of attachment or confiscation orders.

Section 3 of the Ordinance provides the attachment mechanism.

The Court distinguished Mirza Iqbal Hussain v. State of Uttar Pradesh, (1982) 3 SCC 516, because it concerned the 1947 Act, which contained no specific confiscation provision and pre-dated the later statutory framework.

The trial court relied on Section 452 CrPC to confiscate the properties, but the Court held that the governing framework for property connected with offences under the 1988 Act is the Act read with the Ordinance.

The prosecution had not invoked the Ordinance’s attachment procedure, and Section 452 could not independently substitute for that procedure or support confiscation of property outside its scope.

The Court also noted that the investigation and registration of the FIR had been delayed and that the properties were transferred during the intervening period, underscoring the need to use the attachment mechanism promptly.

Because the confiscation order was unsustainable on this ground, the Court did not need to determine the appellants’ bona fide-purchaser claims separately.

It also observed that the Government should consider amendments making attachment mandatory in appropriate corruption cases.