Union Of India & Ors Vs. M/S. A.M.
Overseas & Anr  Insc 425 (18 July 2006)
Ar. Lakshmanan & Lokeshwar Singh Panta
out of SLP(C) No.23168/2005) Dr. AR . Lakshmanan, J.
Mr. Mohan Parasaran, learned Additional Solicitor General for the
appellant-Union of India and Mr. Arun Jaitely, learned
Senior Counsel for respondent No.1.
appeal was filed by the Union of India through its Secretary, Ministry of
Finance and the Director of Revenue Intelligence and two others questioning the
correctness of the judgment passed by the High Court dated 14.10.2005. The High
Court while allowing the writ petition filed by respondent no.1 held that the
action of the appellants herein in preventing respondent no.1 from operating
its account was bad in law and the appellants could not have issued any
direction under section 110(3) read with section 113(i) and section 121 of the
Customs Act, 1962. Consequently, the High Court has directed the second
respondent Bank to release the account of respondent no.1 and permit operation
this appeal, several grounds have been raised by the Union of India questioning
the legality and correctness of the orders passed by the High Court. In view of
the subsequent developments, we are not going into the questions of law raised
and the merits in this appeal at this stage.
stated by the learned Senior Counsel for respondent no.1 that the first
respondent's Bank Account was freezed by the appellants herein on 30.7.2005.
The High Court passed the judgment in favour of respondent No.1 on 14.10.2005.
A sum of Rs.49,86,755.25 was seized by the appellants herein, which was in
credit in the Bank Account of the first respondent with the second respondent.
It appears that the first respondent, between 15.10.2005 and 29.10.2005, has
withdrawn a sum of Rs.49,09,712/- leaving a balance of Rs.75,043.25. The
appellant filed the special leave petition before this Court only on
28.10.2005. This Court on 11.11.2005 granted interim stay till the matter is
listed on due date.
thus, seen that the first respondent has withdrawn the amount in the Bank
Account before the order of stay was passed by this Court. In view of the
withdrawal, the appeal filed by the appellants has become infructuous.
we leave the question of law raised in this appeal open to be decided in an
appropriate case. It is also submitted by the learned Additional Solicitor
General that in view of the withdrawal of the entire amount from the Bank
Account, a fresh show cause notice was issued after the investigation was
completed. It is for the appellant to proceed further in accordance with law.
view of the order now passed, there cannot be any order of seizure of the Bank
Account by the appellants. We, therefore, lift the orders of seizure made on
30.7.2005 and 5.8.2005 and the respondent No.1 is at liberty to operate the
said Bank Account and the second respondent will permit the first respondent to
operate the said Bank Account in view of the order now passed.
Appeal is accordingly allowed. There shall be no orders as to costs.