# Canfin Homes Ltd. & Anr v. State of U.P. & Ors

- **Citation:** (2024) 8 ILRA 824
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-08-30
- **Case number:** Criminal Misc. Writ Petition No. 11443 of 2024
- **Bench:** Vivek Kumar Birla, Arun Kumar Singh Deshwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/canfin-homes-ltd-anr-v-state-of-u-p-ors-52441
- **Pages:** 13

## Headnote

Criminal Law-The Uttar Pradesh Gangsters
and Anti-Social Activities (Prevention) Act,
1986-Sections 14(1), 16 & 17- That if a
person interested in a property could not
file a representation before the District
Magistrate/Commissioner of Police u/s
15(1) of the Gangster Act for want of
knowledge then he can file his objection
before the Special Court even after
reference of attachment order to Special
Court u/s 16(1) of the Gangster Act and,
in appropriate cases the Special Court
after completion of the inquiry u/s 17 of
the Gangster Act may also deliver the
attached property to the interested person
if he is found entitled to possession
thereof-petitioners can file an application
before the Special Court (Gangster Act) to
claim their right over the property by
showing that property was not the result
of commission of crime by the accused but
it was purchased through a bank loan, as
the property in question was mortgaged
to the bank, therefore, the bank is entitle
to take its possession, as provided in
Section 17 of the Gangster Act-Result
Petition
dismissed
with
liberty
to
petitioner to file their objection or claim
before the Special Court (Gangster Act),
Ghaziabad. (E-15)

List of Cases cited:

## Text

_Characters 0–39,944 of 42,045. This is a partial read: ask again with offset=39944 for what follows._

824 INDIAN LAW REPORTS ALLAHABAD SERIES
23. Registry is also directed to
send a copy of this order to the Director,
Judicial Training and Research Institute
(JTRI), Lucknow, U.P. for compliance.

24. This Court appreciates the
assistance rendered by Shri Ali Jamal
Khan,
learned
amicus
curiae,
who
addressed the Court on the merits of this
case, and also made the relevant enquiries
into the status of the other bail applications
of the applicant where he has been enlarged
on bail but he could not set forth at liberty
on account of providing sureties.

25. The High Court Legal Services
Committee shall consider the payment of
usual remuneration to Shri Ali Jamal Khan,
(A/A-518/2011)
who
represented
the
applicant as amicus curiae before this
Court.

26. A copy of this order translated
in Hindi shall be provided to the accused in
jail through the District Legal Services
Authority, Agra.
----------
(2024) 8 ILRA 824
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.08.2024

BEFORE

THE HON'BLE VIVEK KUMAR BIRLA, J.
THE HON'BLE ARUN KUMAR SINGH
DESHWAL, J.

Criminal Misc. Writ Petition No. 11443 of 2024

Canfin Homes Ltd. & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Amrendra Singh

Counsel for the Respondents:
G.A.

Criminal Law-The Uttar Pradesh Gangsters
and Anti-Social Activities (Prevention) Act,
1986-Sections 14(1), 16 & 17- That if a
person interested in a property could not
file a representation before the District
Magistrate/Commissioner of Police u/s
15(1) of the Gangster Act for want of
knowledge then he can file his objection
before the Special Court even after
reference of attachment order to Special
Court u/s 16(1) of the Gangster Act and,
in appropriate cases the Special Court
after completion of the inquiry u/s 17 of
the Gangster Act may also deliver the
attached property to the interested person
if he is found entitled to possession
thereof-petitioners can file an application
before the Special Court (Gangster Act) to
claim their right over the property by
showing that property was not the result
of commission of crime by the accused but
it was purchased through a bank loan, as
the property in question was mortgaged
to the bank, therefore, the bank is entitle
to take its possession, as provided in
Section 17 of the Gangster Act-Result
Petition
dismissed
with
liberty
to
petitioner to file their objection or claim
before the Special Court (Gangster Act),
Ghaziabad. (E-15)

List of Cases cited:

1. Prithvi Singh Vs St.of U.P. & ors.reported in
2022 (8) ADJ 29 (DB)

2. Mineral Area Development Authority & anr.Vs
SAIL & anr. reported in 2024 SCC OnLine SC
1796

3. S.B.I. Vs Santosh Gupta & anr. reported in
(2017) 2 SCC 538

4. M. Karunanidhi Vs U.O.I.reported in (1979) 3
SCC 431

5. R.S. Raghunath Vs St.of Karn. & anr.
reported in (1992) 1 SCC 335
8 All. Canfirm Homes Ltd. & Anr. Vs. State of U.P. & Ors.
825
6. Commissioner of Income Tax Vs Hindustan
Bulk Carriers reported in (2003) 3 SCC 57

7. Government of A.P. Vs J.B. Educational
Society reported in (2005) 3 SCC 212

(Delivered by Hon'ble Arun Kumar Singh
Deshwal, J.)

 1. Heard Sri Amrendra Singh,
learned counsel for the petitioners and Sri
Ratan Singh, learned AGA for the State.

2. Present petition has been filed
for the following relief:

 "I. Issue a writ, order or direction
in the nature of certiorari, for quashing the
order of attachment dated 04.05.2023
passed
by
Police
Commissioner,
Ghaziabad in the case no. 09/23, u/s 14(1)
of the U.P. Gangsters and Anti-Social
Activities (Prevention) Act, 1986 in State
Vs. Rakesh Sharma as much as it relates to
the borrower/mortgagor's said property i.e.
House no.78 Sector Delta-3, Greater
Noida,
Gautam
Budh
Nagar,
Uttar
Pradesh;

 II. Direct the respondent no.3 to
handover the physical possession of the
said property to the petitioner. "

3. Contention of learned counsel
for the petitioners is that petitioner no.1 is a
housing finance company sponsored by
Canara
bank.
The
petitioner-finance
company has granted a loan to one Rakesh
Sharma to purchase house no.78 Sector
Delta-3, Greater Noida, Gautam Budh
Nagar, Uttar Pradesh and that the property
was also mortgaged to the petitioners in
lieu of the above loan facility extended to
Rakesh Sharma. It is further submitted that
against Rakesh Sharma, the Gangster Act
was invoked, and a FIR was registered
against him in case crime no.466 of 2022
and during that proceeding, the above
property was attached by the Police
Commissioner, Ghaziabad vide order dated
04.05.2023 u/s 14(1) of the U.P. Gangsters
and Anti-Social Activities (Prevention)
Act, 1986 (hereinafter referred to as the
'Gangster Act').

4. As the above property was
already mortgaged to the bank, which is a
secured creditor, the petitioners preferred
Criminal Misc. Writ Petition No.3720 of
2024, immediately after the knowledge of
the attachment order dated 04.05.2023.
That writ petition was disposed of with a
direction to Commissioner of Police,
Ghaziabad, to consider the representation
dated 08.09.2023 of petitioners against the
attachment order dated 04.05.2023 and
decide the same within 15 days from the
date of production of the certified copy of
this order.

5. It is further submitted that
despite receiving a copy of the order dated
13.03.2024 passed by this Hon'ble Court in
Criminal Misc. Writ Petition No.3720 of
2024,
the
respondent
no.3
has
not
considered the representation of petitioner
no.2, and he was simply informed by
respondent
no.3
vide
letter
dated
08.05.2024 that the final order regarding
the property of Rakesh Sharma has been
passed on 04.08.2023, u/s 15 of the
Gangster Act and the matter has been
referred to the Special Court (Gangster
Act). Therefore, representation of petitioner
no.2 cannot be considered at this stage.
Learned counsel for the petitioners further
submitted that the property in question was
mortgaged to the bank, and the bank had
already issued proceedings to recover its
dues against the property in question
(attached by respondent no.3), under the
826 INDIAN LAW REPORTS ALLAHABAD SERIES
Securitization
and
Reconstruction
of
Financial Assets and Enforcement of
Security Interest Act, 2002 (hereinafter
referred to as 'the Act, 2002') and
petitioners being secured creditors will
have first right over the property in
question as the Act, 2002 is Central Act
and same will prevail over the law made by
the Legislature of the State in view of the
Article 254 of the Constitution of India.

6. Per contra, learned AGA has
submitted that at the time of deciding the
Criminal Misc. Writ Petition No.3720 of
2024, petitioners had not informed the
court about the order dated 04.08.2023
passed u/s 16 of the Gangster Act by which
representation of the accused Rakesh
Sharma was rejected and matter was
referred to Special Court (Gangster Act)
and at this stage, the Commissioner of
Police has no authority to pass any order to
release the property in question and
petitioners have remedy to pursue their
case before the Special Court (Gangster
Act).

7. After hearing the submission of
learned counsel for the parties and on
perusal of the record, it appears that the
impugned
attachment
order
dated
04.05.2023
was
passed
by
the
Commissioner of Police, Ghaziabad, u/s
14(1) of the Gangster Act. Thereafter, after
considering the representation of the
accused, Rakesh Sharma, the final order
was passed u/s 16 of the Gangster Act on
04.08.2023 and the matter was referred to
the Special Court (Gangster Act). On the
date of filing the Criminal Misc. Writ
Petition
No.3720
of
2024
by
the
petitioners, the matter had already been
referred to the Special Court (Gangster
Act) u/s 16 of the Gangster Act. As the
matter was already referred to Special
Court (Gangster Act), prior to passing the
order dated 13.03.2024 in Criminal Misc.
Writ Petition No.3720 of 2024, therefore,
the Commissioner of Police has no
authority to consider the representation of
the petitioners regarding the release of the
property in question. The petitioners were
already informed by the Commissioner of
Police vide order dated 08.05.2024 about
the order dated 04.08.2023.

8. At present, the matter is pending
before the Special Court (Gangster Act).
Now, as per the Section 16(3) of the
Gangster Act, Special Court will conduct
an inquiry u/s 17 of the Gangster Act
regarding the character of acquisition of
property. Sections-16 & 17 of the Gangster
Act are being quoted as under:

 "16. Enquiry into the character
of acquisition of property by court-

 (1) Where no representation is
made within the period specified in subsection (1) of Section 15 or the District
Magistrate does not release the property
under sub-section (2) of Section 15 he shall
refer the matter with his report to the Court
having jurisdiction to try an offence under
this Act.

 (2) Where the District Magistrate
has refused to attach any property under
sub-section (1) of Section 14 or has
ordered for release of any property under
sub-section (2) of Section 15, the State
Government or any person aggrieved by
such refusal or release may make an
application to the Court referred to in subsection (1) for inquiry as to whether the
property was acquired by or as a result of
the commission of an offence triable under
this Act. Such Court may, if it considers
necessary or expedient in the interest of
8 All. Canfirm Homes Ltd. & Anr. Vs. State of U.P. & Ors.
827
justice so to do, order attachment of such
property.

 (3)(a) On receipt of the reference
under sub-section (1) or an application under
sub-section (2), the Court shall fix a date for
inquiry and give notices thereof to the person
making the application under sub- section (2)
or, as the case may be, to the person making
the representation under Section 15 and to
the State Government, and also to any other
person whose interest appears to be involved
in the case.

 (b) On the date so fixed or any
subsequent date to which the inquiry may be
adjourned, the Court shall hear the parties,
receive evidence produced by them, take such
further evidence as it considers necessary,
decide whether the property was acquired by
a gangster as a result of the commission of an
offence triable under this Act and shall pass
such order under Section 17 as may be just
and necessary in the circumstances of the
case.

 (4) For the purpose of inquiry
under sub-section (3) the Court, shall have
the power of a Civil Court while trying a suit
under the Code of Civil Procedure, 1908 in
respect of the following matters, namely :-

 (a) summoning and enforcing the
attendance of any person and examining him
on oath;

 (b) requiring the discovery and
production of documents;

 (c)
receiving
evidence
on
affidavits;

 (d) requisitioning any public
record or copy thereof from any Court or
office;
 (e)
issuing
commission
for
examination of witness or documents;

 (f) dismissing a reference for
default or deciding it ex parte

 (g) setting aside an order of
dismissal for default or ex parte decision.

 (5) In any proceedings under this
section, the burden of proving that the
property in question or any part thereof
was not acquired by a gangster as a result
of the commission of any offence triable
under this Act, shall be on the person
claiming the property, anything to the
contrary contained in the Indian Evidence
Act,
1872
(Act
No.1
of
1872),
notwithstanding.

 "17. Order after inquiry-If upon
such inquiry the Court finds that the property
was not acquired by a gangster as a result of
the commission of any offence triable under
this Act it shall order for release of the
property of the person from whose possession
it was attached. In any other case the Court
may make such order as it thinks fit for the
disposal of the property by attachment,
confiscation or delivery to any person entitled
to the possession thereof, or otherwise."

9. From perusal of Section-16 of
the Gangster Act, it is clear that when no
representation is made or despite receiving
representation u/s 16(1) of the Gangster
Act, District Magistrate does not release the
property u/s 15(2) of the Gangster Act then
any aggrieved person by such refusal may
make an application to special court u/s
16(2) of the Gangster Act to release such
property after conducting inquiry.

10. Therefore, it is also clear from
Section 16(3)(a) of the Gangster Act that
828 INDIAN LAW REPORTS ALLAHABAD SERIES
when the matter is referred by the District
Magistrate to Special Court u/s 16(1) of the
Gangster Act then any person whose
interest appears to be involved in the case
may also be heard by Special Court while
conducting inquiry u/s 17 of the Gangster
Act. From perusal of Section 16(3)(a) of
the Gangster Act, it is amply clear that any
person who is interested in the property has
the right to appear before the court to
establish his claim over the property and
the Special Court u/s 16(3)(b) of the
Gangster Act will hear the parties and after
considering the evidence produced by the
parties would decide whether property was
acquired by the Gangster, as a result of
Commission of offence or not. After the
inquiry u/s 17 of the Gangster Act, if the
Special Court does not release the property
in favour of the Gangster, then the court
can also deliver the same to a person who is
entitled to possession.

11. The co-ordinate Bench of this
court in the case of Prithvi Singh Vs. State
of U.P. And Others reported in 2022 (8)
ADJ 29 (DB) considered the law relating
interpretation of statute. Paragraph nos.10
to 18 of Prithvi Singh's case (supra) is
being quoted as under:

 "10. Before proceeding further it
would be appropriate to take note of the
principles of statutory interpretation as the
decision of the question involved in the
present case is directly dependant on the
interpretation of the statutory provisions.
For this purpose we have taken help of the
book 'Principles of Statutory Interpretation'
'13th Edition, 2012' written by Justice G. P.
Singh (Former Justice of M. P. High
Court).

 11. One of the main basic
principles of interpretation is that if
meaning of words of statute are plain,
effect must be given to it irrespective of
consequences.

 12. In Nelson Motis v. Union of
India, AIR 1992 SC 1981, it has been
observed that when the words of a statute
are clear, plain or unambiguous, i.e., they
are reasonably susceptible to only one
meaning, the Courts are bound to give
effect to that meaning irrespective of
consequences.

 13.
In
Kanailal
Sur
v.
Paramnidhi Sadhu Khan, AIR 1957 SC
907, it was observed that if the words used
are capable of one construction only then it
would not be open to the Courts to adopt
any other hypothetical construction on the
ground that such construction is more
consistent with the alleged object and
policy of the Act.

 14. In State of Uttar Pradesh v.
Vijay Anand Maharaj, AIR 1963 SC 946, it
was held that when a language is plain and
unambiguous and admits of only one
meaning no question of construction of a
statute arises, for the Act speaks for itself.

 15. It is also a guiding rule of
interpretation that language of the statute
should be read as it is.

 16. In Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd v. Custodian of Vested
Forests, AIR 1990 SC 1747, it was
observed
that
the
intention
of
the
legislature is primarily to be gathered from
the language used, which means that
attention should be paid to what has been
said as also to what has not been said.

 17. In Raghunath Rai Bareja v.
Punjab National Bank, (2007) 2 SCC 230,
8 All. Canfirm Homes Ltd. & Anr. Vs. State of U.P. & Ors.
829
Supreme Court held that departure from
the literal rule should be done only in very
rare cases and ordinarily there should be
judicial restraint in this connection.

 18. Insofar as rule of 'regard to
consequences' is concerned, the aforesaid
book clearly provides that this rule has no
application when the words are acceptable
to only one meaning and no alternate
construction
is
reasonably
open.
A
reference may be made in this regard with
citations noted above which provides that if
meaning is plain, effect must be given to it
irrespective of consequences."

12. In the present case, the
petitioners have also made a representation
u/s 15(1) of the Gangster Act before the
respondent no.3 but same was submitted
after passing of the order u/s 16 of the
Gangster Act, even then their right to
appear before the special court to claim
their property on the ground that being
finance company, they have preferential
rights over the attached property which was
hypothecated
to
the
bank
and
the
proceeding against the same was also
issued under the Act, 2002 to recover the
loan extended by the petitioners to the
accused, Rakesh Sharma to purchase that
property. Thus, the bank falls in the
category of "any person aggrieved" as
provided u/s 16(2) of the Gangster Act and
in the category of "any other person whose
interest appears to be involved in the case"
as mentioned in Section-16(3)(a) of the
Gangster Act.

13. From the above analysis, this
court holds that if a person interested in
a property could not file a representation
before
the
District
Magistrate/Commissioner of Police u/s
15(1) of the Gangster Act for want of
knowledge then he can file his objection
before the Special Court even after
reference of attachment order to Special
Court u/s 16(1) of the Gangster Act and,
in appropriate cases the Special Court
after completion of the inquiry u/s 17 of
the Gangster Act may also deliver the
attached property to the interested
person if he is found entitled to
possession thereof.

14. So far as the contention of
learned counsel for the petitioner that the
Act, 2002 being a Central Act will have
overriding effect over the Gangster Act in
view of Article 254 of the Constitution of
India is concerned, to decide this issue,
Articles 246 and 254 of the Constitution of
India are being quoted as under:

 "246. Subject-matter of laws
made
by
Parliament
and
by
the
Legislatures of States

 (1) Notwithstanding anything in
clauses (2) and (3), Parliament has
exclusive power to make laws with respect
to any of the matters enumerated in List 1
in
the
Seventh
Schedule
(in
this
Constitution referred to as the "Union
List").

 (2) Notwithstanding anything in
clause (3), Parliament and subject to
clause (1), the Legislature of any State
also, have power to make laws with respect
to any of the matters enumerated in List III
in
the
Seventh
Schedule
(in
this
Constitution referred to as the "Concurrent
List").

 (3) Subject to clauses (1) and (2),
the Legislature of any State has exclusive
power to make laws for such State or any
part thereof with respect to any of the
830 INDIAN LAW REPORTS ALLAHABAD SERIES
matters enumerated in List II in the Seventh
Schedule (in this Constitution referred to as
the 'State List').

 (4) Parliament has power to
make laws with respect to any matter for
any part of the territory of India not
included in a State notwithstanding that
such matter is a matter enumerated in the
State List.

 "254.
Inconsistency
between
laws made by Parliament and laws made
by the Legislatures of States

 (1) If any provision of a law made
by the Legislature of a State is repugnant to
any provision of a law made by Parliament
which Parliament is competent to enact, or
to any provision of an existing law with
respect to one of the matters enumerated in
the Concurrent List, then, subject to the
provisions of clause (2), the law made by
Parliament, whether passed before or after
the law made by the Legislature of such
State, or, as the case may be, the existing
law, shall prevail and the law made by the
Legislature of the State shall, to the extent
of the repugnancy, be void.

 (2) Where a law made by the
Legislature of a State with respect to one of
the matters enumerated in the Concurrent
List contains any provision repugnant to
the provisions of an earlier law made by
Parliament or an existing law with respect
to that matter, then, the law so made by the
Legislature of such State shall, if it has
been reserved for the consideration of the
President and has received his assent,
prevail in that State:

 Provided that nothing in this
clause shall prevent Parliament from
enacting at any time any law with respect
to the same matter including a law adding
to, amending, varying or repealing the law
so made by the Legislature of the State."

15. From the perusal of Article 246
of the Constitution of India, it appears that
it confers exclusive powers to Parliament to
make laws with respect to any of the matter
enumerated in Union List (List I) of the
Seventh Schedule, and it also confers
exclusive power to the State Legislatures
with respect to the matters enumerated in
the State List (List II), which is subject to
the
exclusive
legislative
power
of
Parliament. Issue of interpretation of
Article 254 of the Constitution of India
came
into
consideration
before
the
Supreme Court in the case of Mineral
Area Development Authority & Another
Vs. Steel Authority of India & Another
reported in 2024 SCC OnLine SC 1796.
While interpreting Article 254 of the
Constitution of India, the nine Judges
Bench in Mineral Area Development
Authority (supra) observed that issue of
repugnancy arises only when both the
legislatures are competent to legislate on
the subject with respect of List-III and in
case of conflict in other cases, answer lies
in Article 246 of the Constitution of
India, itself. Paragraph nos.33, 34 and 35
of Mineral Area Development Authority
(supra) are being quoted as under:

 "33. Article 254 clarifies that if
the law made by a State legislature is
repugnant to any provisions of a law made
by Parliament with respect to any of the
matters enumerated in List III, the law
made by Parliament would prevail and the
law made by the State legislature would be
void to the extent of the repugnancy. The
issue of repugnancy arises only when both
the legislatures are competent to legislate
on the subject with respect to List III. The
8 All. Canfirm Homes Ltd. & Anr. Vs. State of U.P. & Ors.
831
issue of repugnancy does not arise if the
legislations enacted by Parliament and the
State legislatures deal with separate and
distinct legislative subject matters. By
virtue of Article 248, Parliament has
exclusive legislative powers to make laws
with respect to any of the matters not
enumerated in List II or List III. However,
how should courts deal with a situation
where
two
legislations,
enacted
by
Parliament
and
State
legislature
in
pursuance of their respective legislative
powers, appear to conflict with each other?
The answer lies in Article 246 itself.

 34. Article 246 incorporates the
principle of federal supremacy. In Hoechst
Pharmaceuticals (supra), this Court held
that the words "notwithstanding anything
contained in clauses (2) and (3)" in Article
246(1) and the words "subject to clauses
(1) and (2)" in Article 246(3) embody that
principle. The principle postulates that in
case of an inevitable conflict between
Union and State powers, the Union's power
of legislation over a subject enumerated in
List I shall prevail over the State powers of
legislation over a subject enumerated in
List II and III. However, it is also settled
that this principle cannot be resorted to
unless there is an irreconcilable direct
conflict between the entries in the Union
and State Lists. Such a conflict must be an
actual one and not a mere seeming conflict
between the two entries in two lists.

 35.
Hoechst
Pharmaceuticals
(supra) laid down the following principles
to resolve any direct conflict between the
entries in List I and List II : (i) in case of
seeming conflict, the two entries should be
read together without giving a narrow and
restricted reading to either of them; (ii) an
attempt should be made to see whether the
two entries can be reconciled so as to avoid
a conflict of jurisdiction; and (iii) no
question of conflict arises between two
Lists if the impugned legislation in pith and
substance appears to fall exclusively under
one list and the encroachment upon the
other list is incidental."

16. The issue of repugnancy
between the Central Act and the State Act
has been explained in a number of statutory
interpretations by G.P. Singh. The relevant
extract from the Fourteenth Edition of G.P.
Singh's
principles
of
statutory
interpretation is being quoted as under:

 "The
question
whether
the
legislature has kept itself within the
jurisdiction assigned to it or encroached
upon a forbidden field is determined by
finding out the true nature and character or
pith and substance of the legislation which
may be different from its consequential
effects. If the pith and substance of the
legislation is covered by an entry within the
permitted jurisdiction of the legislature any
incidental encroachment in the rival field is
to be disregarded. There is presumption of
constitutionality of statute and hence, prior
to determining whether there is any
repugnancy between the Central Act and
the State Act, it has to be determined
whether both Acts laid to the same entry in
the List III and whether there is a 'direct'
or that a 'irreconcilable' conflict between
two, applying the doctrine of, pith and
substance."

17. Similarly, from the perusal of
the above quoted Article 254 of the
Constitution of India, it is clear that the
same
is
applicable
where
there
is
inconsistency between the law made by the
Parliament and the State Legislature
regarding
any
matter
enumerated
in
Concurrent List (List III). Act 2002 is
832 INDIAN LAW REPORTS ALLAHABAD SERIES
referable to Entry 45 and 95 of the Union
List (List I) and deals with the recovery of
debt due to bank and financial institutions,
which is the subject of the Union List.
Similar issue came for consideration before
the Hon'ble Supreme Court in the case of
State Bank of India Vs. Santosh Gupta
& Anothers reported in (2017) 2 SCC 538,
wherein the dispute arose regarding the
Act, 2002 and the transfer of property Act.
Paragraph no.37 of the Santosh Gupta's
case (supra) is being quoted as under:

 "37. Applying the doctrine of pith
and substance to Sarfaesi, it is clear that in
pith and substance the entire Act is
referable to Entry 45 List I read with Entry
95 List I in that it deals with recovery of
debts
due
to
banks
and
financial
institutions, inter alia through facilitating
securitisation
and
reconstruction
of
financial assets of banks and financial
institutions, and sets up a machinery in
order to enforce the provisions of the Act.
In pith and substance, Sarfaesi does not
deal with "transfer of property". In fact,
insofar as banks and financial institutions
are concerned, it deals with recovery of
debts owing to such banks and financial
institutions and certain measures which
can be taken outside of the court process to
enforce such recovery. Under Section 13(4)
of Sarfaesi, apart from recourse to taking
possession of secured assets of the
borrower and assigning or selling them in
order to realise their debts, the banks can
also take over the management of the
business of the borrower, and/or appoint
any person as manager to manage secured
assets, the possession of which has been
taken over by the secured creditor. Banks
as secured creditors may also require at
any time by notice in writing, any person
who has acquired any of the secured assets
from the borrower and from whom money
is due or payable to the borrower, to pay
the secured creditor so much of the money
as is sufficient to pay the secured debt. It is
thus clear that the transfer of property, by
way of sale or assignment, is only one of
several measures of recovery of a secured
debt owing to a bank and this being the
case, it is clear that Sarfaesi, as a whole,
cannot possibly be said to be in pith and
substance, an Act relatable to the subjectmatter "transfer of property".

18. The Constitution Bench of the
Hon'ble
Supreme
Court
in
M.
Karunanidhi Vs. Union of India reported
in (1979) 3 SCC 431 had considered the
question of repugnancy and inconsistency
between the Central Act and the State Act
and held that, before any repugnancy can
arise, the conditions which must be
satisfied are:

 (i) that there is a clear and direct
inconsistency between the Central Act and
the State Act;

 (ii) that such an inconsistency is
absolutely irreconcilable;

 (iii) that inconsistency between
the provision of two Acts is of such a
nature so as to bring the two Acts into
direct collision with each other and a
situation is reached where it is impossible
to obey the one without disobeying the
other.

19. The relevant paragraph no.24 of
M. Karunanidhi's case (supra) is being
quoted as under:

 "24. It is well settled that the
presumption is always in favour of the
constitutionality of a statute and the onus
lies on the person assailing the Act to prove
8 All. Canfirm Homes Ltd. & Anr. Vs. State of U.P. & Ors.
833
that it is unconstitutional. Prima facie,
there does not appear to us to be any
inconsistency between the State Act and the
Central Acts. Before any repugnancy can
arise, the following conditions must be
satisfied:

 1. That there is a clear and direct
inconsistency between the Central Act and
the State Act.

 2. That such an inconsistency is
absolutely irreconcilable.

 3. That the inconsistency between
the provisions of the two Acts is of such
nature as to bring the two Acts into direct
collision with each other and a situation is
reached where it is impossible to obey the
one without disobeying the other."

20. In the case of R.S. Raghunath
Vs. State of Karnataka & Another
reported in (1992) 1 SCC 335, Hon'ble
Supreme Court observed that the Court
must ascertain the intention of Legislature
by directing its attention not merely to the
clauses to be construed, but to the entire
statute; it must compare the clause with
other parts of the law and the setting in
which the clause to be interpreted occurs.
The relevant paragraph no.12 of R.S.
Raghunath's case (supra) is being quoted
as under:

 "12. Further, the influence of a
non-obstante clause has to be considered
on the basis of the context also in which it
is used. In State of W.B. v. Union of India
[(1964) 1 SCR 371 : AIR 1963 SC 1241] it
is observed as under: (SCR p. 435)

 "The Court must ascertain the
intention of the legislature by directing its
attention not merely to the clauses to be
construed but to the entire statute; it must
compare the clause with the other parts of
the law and the setting in which the clause
to be interpreted occurs."

 It is also well settled that the
Court should examine every word of a
statute in its context and to use context in
its widest sense. In Reserve Bank of India v.
Peerless General Finance and Investment
Co. Ltd. [(1987) 1 SCC 424] it is observed
that: "That interpretation is best which
makes the textual interpretation match the
contextual." In this case, Chinnappa
Reddy, J. noting the importance of the
context in which every word is used in the
matter of interpretation of statutes held
thus: (SCC p. 450, para 33)

 "Interpretation must depend on
the text and the context. They are the bases
of interpretation. One may well say if the
text is the texture, context is what gives the
colour. Neither can be ignored. Both are
important. That interpretation is best which
makes the textual interpretation match the
contextual. A statute is best interpreted
when we know why it was enacted. With
this knowledge, the statute must be read,
first as a whole and then section by section,
clause by clause, phrase by phrase and
word by word. If a statute is looked at, in
the context of its enactment, with the
glasses of the statute-maker, provided by
such context, its scheme, the sections,
clauses, phrases and words may take
colour and appear different than when the
statute is looked at without the glasses
provided by the context. With these glasses
we must look at the Act as a whole and
discover what each section, each clause,
each phrase and each word is meant and
designed to say as to fit into the scheme of
the entire Act. No part of a statute and no
word of a statute can be construed in
834 INDIAN LAW REPORTS ALLAHABAD SERIES
isolation. Statutes have to be construed so
that every word has a place and everything
is in its place."

 If we examine the scope of Rule
3(2) particularly along with other General
Rules, the context in which Rule 3(2) is
made is very clear. It is not enacted to
supersede the Special Rules."

21. Similarly, in the case of
Commissioner
of
Income
Tax
Vs.
Hindustan Bulk Carriers reported in
(2003) 3 SCC 57, the Hon'ble Supreme
Court again observed that the statute must
be read as a whole and one provision of the
Act should be construed with reference to
other provisions in the same Act so as to
make it consistent enactment of the whole
statute. The relevant paragraph no.18 of
Hindustan Bulk Carrier's case (supra) is
being quoted as under:

 "18. The statute must be read as
a whole and one provision of the Act
should be construed with reference to other
provisions in the same Act so as to make a
consistent enactment of the whole statute."

22. The Hon'ble Supreme Court
again in the case of Government of A.P.
Vs. J.B. Educational Society reported in
(2005) 3 SCC 212 observed that there is no
doubt that both Parliament and the State
Legislature are supreme in their respective
assigned fields. It is the duty of the Court to
interpret
the
Legislation
made
by
Parliament and the State Legislature in
such a manner so as to avoid any conflict.
However, if the conflict is unavoidable and
the two enactments are irreconcilable, then
by the force of non-obstante clause in
Clause-1 of Article 246 of the Constitution
of India, the Parliamentary Legislation
would
prevail,
notwithstanding
the
exclusive power of the State Legislature to
make a law with respect to the matter
enumerated in the State List. The relevant
paragraph no.10 of Educational Society's
case (supra) is being quoted as under:

 "10. There is no doubt that both
Parliament and the State Legislature are
supreme in their respective assigned fields.
It is the duty of the court to interpret the
legislations made by Parliament and the
State Legislature in such a manner as to
avoid any conflict. However, if the conflict
is unavoidable, and the two enactments are
irreconcilable, then by the force of the non
obstante clause in clause (1) of Article 246,
the parliamentary legislation would prevail
notwithstanding the exclusive power of the
State Legislature to make a law with
respect to a matter enumerated in the State
List."

23. From the above legal position,
it
is
clear
that
the
concept
of
"inconsistency" is found in Article 254 of
the Constitution of India. Article 254 of the
Constitution of India has a marginal note
which speaks about the inconsistencies
between the laws made by the Parliament
and the laws made by the Legislatures of
the State. The Article aforesaid goes on to
State that if the law made by the State is
repugnant to the law made by the
Parliament, then the law made by the
Parliament to the extent of repugnancy
would prevail. The said Article, being a
constitutional provision, deals with the
complex subject of the quasi and federal
structure we have in India.

24. In the present case, the
question is regarding the repugnancy of the
Act, 2002 and the Gangster Act. The
subject of making criminal law is in Entry-I
and its procedure in Entry-II of the
8 All. Canfirm Homes Ltd. & Anr. Vs. State of U.P. & Ors.
835
Concurrent List of the Constitution of
India, wherein the Parliament and State
Legislature are competent to legislate in
view of Article 246 of the Constitution of
India. The UP Gangster Act is criminal law
and UP State Legislature is competent
under Entry I and II of the Concurrent List
to enact UP Gangster Act that provides
penalties to gangster and also procedure to
attach and confiscate the property of a
gangster acquired through illegal means.
However, Act 2002 is referable to Entry 45
and 95 of List I. For reference, Entry 45
and 95 of the Union List (List I) and Entry
I and II of the Concurrent List (List III) are
being quoted as under:

 "Union List (List I)

 Entry 45-Banking

 Entry 95-Jurisdiction and powers
of all courts, except the Supreme Court,
with respect to any of the matters in this
list; admiralty jurisdiction.

 Concurrent List (List III)

 Entry I- Criminal law, including
all matters included in the Indian Penal
Code at the commencement of this
Constitution but excluding offences against
laws with respect to any of the matters
specified in List I or List II and excluding
the use of naval, military or air forces or
any other armed forces of the Union in aid
of the civil power.

 Entry
II-Criminal
procedure,
including all matters included in the Code
of
Criminal
Procedure
at
the
commencement of this Constitution."

25. The object of the Act, 2002 is
to ensure that dues of secured creditors
including banks, financial institutions are
recovered from the defaulting borrowers
without any obstruction and without
intervention of courts or Tribunals, while
the object of the Gangster Act is to provide
speedy and transparent procedure to punish
the gangster, to establish an efficient
recovery system with respect to the
property
of
gangsters
and
incidental
benefits acquired by them through crime.
The conjoint reading of the Act, 2002 and
Gangster Act shows that there is no
overlapping between them.

26. This court is of the view that
Article 254 of the Constitution of India
will apply only in those cases where there
is inconsistency between the law made by
the Parliament and law made by the
Legislature of State on the subject of
List-III (Concurrent List) but there is no
inconsistency between the Act, 2002 and
the Gangster Act, as object of the Act,
2002 and Gangster Act are different and
both the Acts operate in different fields,
and both Acts were enacted in different
lists. (List I and List III).

27. Now coming back to the
controversy involved in present case, the
inquiry, as per Section 16 of the Gangster
Act, would be, whether the property
purchased by the Gangster, as a result of
commission of an offence under the
Gangster Act and not the issue that who
will have first right over that property.
Therefore, the petitioners can file an
application before
the Special Court
(Gangster Act) in case crime no.466 of
2022 to claim their right over the property
by showing that property was not the result
of commission of crime by the accused,
Rakesh Sharma, but it was purchased
through a bank loan, as the property in
question was mortgaged to the bank,
836 INDIAN LAW REPORTS ALLAHABAD SERIES
therefore, the bank is entitle to take its
possession, as provided in Section 17 of the
Gangster Act.

28. In view of the above, the
petitioners
argument
has
no
force.
Accordingly present petition is dismissed.
However,
liberty
is
granted
to
the
petitioners to file their objection or claim
before the Special Court (Gangster Act),
Ghaziabad, regarding House No.78 Sector
Delta-3, Greater Noida, Gautam Budh
Nagar, Uttar Pradesh and the court below
will consider the same, in accordance with
law, on its own merits.
----------
(2024) 8 ILRA 836
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 14.08.2024

BEFORE

THE HON'BLE SIDDHARTHA VARMA, J.
THE HON'BLE RAM MANOHAR NARAYAN
MISHRA, J.

Criminal Appeal No. 1093 of 1983

Murari ...Appellant
Versus
State of U.P. ...Respondent

Counsel for the Appellant:
Sri Daya Shankar Mishra, Sri Krishna Kapoor