Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for PMLA: The Tribunal chaired by Manmohan Singh, J. set aside an order restraining a woman from sale or transfer of a property, in which she was not claiming any right, title or interest.

The present appeal was filed under Section 26 of Prevention of Money Laundering Act, 2002 against the order passed by the Adjudicating Authority in an Original Application (OA) whereby appellant and her associates had been restrained from sale/ transfer of certain properties. The appellant’s case was that prima facie there was no link or nexus with the accused. Her name had only been mentioned in relation to a property which she had agreed to be purchased from one Nirmala Jain. However, due to certain personal reasons on the seller’s part, the sale could not be consummated. The said OA made no mention of any paper/documents/article or the like which had been seized and which had any connection with the appellant.

Appellant’s sole submission was that no cogent evidence had been provided by the ED to show that it had any link/ nexus with any alleged accused parties. However, despite the same, she had been arrayed as a defendant in the O.A.

The Tribunal noted that in the impugned order, no plea of the appellant had been referred. The appellant was not even claiming any right in the subject property. No prosecution complaint had been filed under Section 8(3)(a) of PMLA and the period of ninety days had already expired. Thus, her name ought to be deleted as the defendant from the O.A. At this juncture, counsel for respondent Atul Tripathi submitted that since the appellant was claiming no right and title in the property, her name may be deleted.

In view of the above, the appeal was allowed.[Alka Pahwa v. Assistant Director Directorate of Enforcement, Chandigarh, 2019 SCC OnLine ATPMLA 10, decided on 28-03-2019]

Case BriefsForeign Courts

Supreme Court of Democratic Republic of Sri Lanka: A Bench comprising of S. Eva Wanasundera PCJ, H.N.J. Perera and Murdu Fernando, JJ., set aside the judgment of the lower courts, and granted the relief sought by the plaintiffs in the present case.

The pertinent facts of the case are that the defendant had come into the ownership of two small allotments of land by means of a title deed, which was duly attested by the notary public. She had transferred the same to a third party named Premlatha for a purchase price of Rs. 500,000, as stated by the notary public. Premlatha, by means of another deed, transferred the said property to the plaintiff. On the very same day on which this transfer took place, the plaintiff entered into a lease agreement in favour of the defendant, which was for a period of two years and the lease amount was Rs. 12000 per year, which the defendant agreed to pay in installments of Rs. 500 every month. After the expiry of the lease period, the defendant had refused to move out, as a result of which the plaintiffs filed an action for ejection against the defendant. In the trial, the defendant had presented evidence, but had not been present for cross examination. In spite of the same, the district court had reserved the case for judgment, and further dismissed the plaint but did not grant the relief prayed for by the defendant. The High Court had upheld the decision of the District Judge. The contention of the defendant was that the transfer of the property to Premlatha was in the nature of a transaction of security, for which the defendant was paying interest, and as she had failed to ‘pay the loan’, she was unable to get the property retransferred to herself. The transaction between the defendant and Premlatha was in the nature of a trust, as the defendant never intended to pass the title of the property. The defendant was a witness to the deed which was signed between Premlatha and the plaintiff, and thus it is evident that there was no intention on the part of the defendant to retain her status as owner of the property, as the deed was for the sale of the property, for a consideration of Rs. 6 lakhs. The contention that the plaintiff was holding the property in trust for the defendant was also rejected by the court, which stated that ‘holding in trust’ is a concept which cannot pass or be transferred from one person to another.

The court placed reliance on the case of Dr. Rasiah Jeyarajah v. Yogambihai Thambirajahnee-Renganathan Pillei, 2015 SCC OnLine SL SC 8, to state that the plaintiff was entitled to evict the defendants from the property upon the conclusion of the lease agreement, and that there was no need to prove title over the premises. The plaintiff was not obligated under law to provide notice of termination of lease and license, contrary to what was held by the High Court.

Accordingly the appeal was allowed with costs and the judgment of the District Court and the Civil Appellate High Court set aside. [Hallewa Mangalika Jayasinghe v. Udeni Bandara Jayasinghe, SC Appeal 183/2016, order dated 28.09.2018]

Case BriefsSupreme Court

Supreme Court: While hearing the matter relating to mortgagor’s right of redemption by appellant, the bench comprising of Navin Sinha and Ranjan Gogoi JJ. held that where the mortgaged property has already been put to auction sale and sale certificate has been issued, there remains no property mortgaged to be redeemed and hence, the mortgagor cannot claim the right to redemption of the mortgaged property by the virtue of section 60 of the Transfer of property Act 1882.

The mortgagor had contended that the mortgagor has a right of redemption even after sale has taken place. On the other hand, it was contended by the defendant that the sale in its favour stood concluded, sale certified issued along with possession delivered, long before the suit for redemption was filed, hence, the right of redemption stood extinguished. Rejecting the mortgagor’s contention, the Court held that the mortgagor has a right of redemption even after sale has taken place pursuant to the final decree, but before the confirmation of sale. [Allokam Peddabbayya v. Allahabad Bank, 2017 SCC OnLine SC 671, decided on 19.06.2017]

Legislation UpdatesStatutes/Bills/Ordinances

The Enemy Property (Amendment and Validation) Third Ordinance, 2016 has been promulgated by the President of India with the aim of making amendments to the existing Enemy Property Act, 1968 and Public Premises (Eviction of Unauthorised Occupants) Act, 1971. It shall be deemed to have come into force by 7th January, 2016.

The amendments executed through this Ordinance include, amendment in Section 5 by which clause (3) has been inserted in the provision which states that “The enemy property vested in the custodian shall, notwithstanding that the enemy or the enemy subject or the enemy firm has ceased to an enemy due to death extinction winding up of business or change of nationality or that the legal heir and successor is a citizen of India or the citizen of a country which is not an enemy, continue to remain, save as otherwise provided in this Act, vested in the Custodian.”

While a newly inserted section 5A provides for issue of certificate by custodian to declare that the enemy property vests in him. While the newly inserted section 5 B provides that the law of succession does not apply to enemy property.

Further, the Ordinance, by the virtue of section 6, also restricts the transfer of any property which is vested in the custodian by an enemy or enemy subject or enemy firm.

The Ordinance further inserts a new Section 8 A which deals with Sale of property by Custodian which also imposes a liability on the custodian to preserve the enemy property till the time is duly disposed off in accordance with the provisions of the Act.Section 10 confers the power to issue a certificate of sale by the custodian.

Section 18 provides provisions for transfer of property which is vested as an enemy property in certain cases and the sub-clause A of the same confers the right to not return the income made from an enemy property but from its sales. The section further lays the jurisdiction of the competent court, in which an aggrieved matter can be raised.

The Ordinance further repealed The Enemy Property (Amendment and Validation) Second Ordinance, 2016. Further, action taken under the Enemy Property Act, 1968 as amended by the said Ordinance, shall be deemed to have been done or taken under the corresponding provisions of the said Act, as amended by this Ordinance.

Ministry of Law and Justice