Allowed

The Church of South India Trust Association (Csita) v. Union of India

Karnataka HC20 Jan 2024WP/10731/2020

Case brief

AI extract

What is this about?

Church challenged FIR, bank-account seizure, and PMLA attachment over compensation received for land acquired for metro work, with the Union claiming defence ownership of leased church land. The court held the title question was civil, quashed the criminal proceedings and attachment, and directed refund of compensation to BMRCL for deposit before the land acquisition authority.

What did the court decide?

FIR Crime No.262/2019, seizure order dated 17.09.2019, provisional attachment and ECIR BGZO/03-2020/1176 quashed; compensation retransmitted to BMRCL for deposit before the LARR Authority.

The Church of South India Trust Association (Csita) Vs… — Money Laundering | Karnataka HC (2024)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20^TH DAY OF JANUARY, 2024 BEFORE

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THE HON’BLE MR. JUSTICE R.NATARAJ

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WRIT PETITION NO.10731 OF 2020 (GM-RES)

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BETWEEN:

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THE CHURCH OF SOUTH INDIA TRUST ASSOCIATION (CSITA) A CORPORATION CONSTITUTED UNDER THE PROVISIONS OF THE INDIAN COMPANIES ACT, 1913, HAVING ITS OFFICE AT NO.5, 'SYNOD SECRETARIAT', WHITES ROAD, ROYAPETTAH, CHENNAI-600014, REPRESENTED BY ITS DULY CONSTITUTED ATTORNEYS, REV. PRASANNA KUMAR SAMUEL AND REV. PAUL DANASHEKARAN, THE BISHOP AND SECRETARY, REPSPECTIVELY OF THE KARNATAKA CENTRAL DIOCESE, NO.20, CSI COMPOUND, 3^RD CROSS, MISSION ROAD, BENGALURU-560027.

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PETITIONER

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(BY SRI. B.V. ACHARYA, SENIOR ADVOCATE FOR SRI. ARUN B.M., ADVOCATE)

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AND:

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UNION OF INDIA BY MINISTRY OF DEFENCE, NEW DELHI-110001.

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DEFENCE ESTATE OFFICER KARNATAKA CIRCLE, K.KAMARAJ ROAD, BENGALURU-560042.

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MAJOR/LT. COL. QUARTERMASTER CMP CENTRE AND SCHOOL, PIN 900493, C/O 56 APO

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STATE BY ASHOKNAGAR POLICE

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BY ITS STATION HOUSE OFFICER

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STATE BANK OF INDIA BY ITS MANAGER, SUBHAMANAGAR BRANCH, BENGALURU-560027.

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DIRECTORATE OF ENFORCEMENT BENGALURU ZONAL OFFICE, 3^RD FLOOR, B BLOCK, BMTC, SHANTHINAGAR TTMC, K.H. ROAD, SHANTHINAGAR, BENGALURU-560027. BY ITS DEPUTY DIRECTOR.

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RESPONDENTS (BY SRI.RAJAT SUBRAMANYAM, HIGH COURT GOVERNMENT PLEADER FOR RESPONDENT NO.4;

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SRI. K. ARAVIND KAMATH, SENIOR ADVOCATE FOR SRI. UNNIKRISHNAN M., ADVOCATE FOR RESPONDENT NOS.1 TO 3;

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SRI. BRIJESHCHANDRA GURU, ADVOCATE FOR RESPONDENT NO.5;

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SRI. H. JAYAKARA SHETTY, CENTRAL GOVERNMENT STANDING COUNSEL FOR RESPONDENT NO.6)

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THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE COMPLAINT DATED 17.08.2019 FILED BY THE 3^RD RESPONDENT BEFORE THE 4^TH RESPONDENT POLICE, VIDE ANNEXURE-A AND ETC.

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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDER ON 21.11.2023 AND COMING ON FOR PRONOUNCEMENT OF ORDER THROUGH VIDEO CONFERENCE THIS DAY, THE COURT MADE THE FOLLOWING:-

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ORDER

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The petitioner has sought for quashing the complaint dated 17.08.2019 filed by the respondent no.3 before the respondent no.2 and the consequent first information report in Crime No. 262/2019 registered by the respondent and the consequent order dated 17.09.2019 under Section 102 and 91 of Cr.P.C. seizing the bank account of the petitioner as well as the provisional attachment order No. 6/2020 dated 08.09.2020 issued by the respondent no.6 and the proceedings initiated by it in ECIR No. BGZO/ 032020/1176 dated 09.01.2020.

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The respondent no. 4 registered Crime No. 262/2019 for the offences punishable under Section 420 of IPC, on the information furnished by the respondent no. 3 and took up investigation. The respondent no.3 claimed that as per the records available with the respondent no.2 relating to Bengaluru Military Station, All Saints Church, Bengaluru was located on defence land in Sy. No. 275 of Civil and Military Station, Bengaluru Kasabsa. He claimed

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that four acres of this land was leased by the Quarter Master General to the Church during the year 1865, an additional four acres in the year 1884 and one acre in the year 1898. He claimed that the land belonged to the Ministry of Defence and the Church only enjoyed the use of the land by virtue of the lease. He claimed that the Church of South India had entered into sale agreement for transfer of defence land measuring 7426.886 sq.mts. leased to All Saints Church with Bengaluru Metro Rail Corporation Ltd., (BMRCL) through KIADB on 04.04.2019. He alleged that entire process of negotiation of sale of the leased land between CSI and BMRCL / KIADB was carried out without any intimation to the Defence Estate Officer, Bengaluru or to the Ministry of defence. He alleged that approximately Rupees Sixty crores was accepted by CSI for transfer of the said defence land to BMRCL for land measuring 2627.615 sq.mts. of which a sum of Rupees Thirty Crores was deposited in respect of 1012 sq.mts. while the balance 3797.271 sq.mts. of land was under the process of notification for the transaction to be processed.

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He therefore alleged that since the title belonged to the Ministry of Defence, the land transferred between CSI and BMRCL was illegal. He alleged that any agency entering into any transaction in respect of a defence land is illegal. He therefore claimed that the compensation for the defence land had to be credited into the Consolidated Fund of India as the Ministry of Defence was the rightful owner. He therefore requested the respondent no. 4 to initiated suitable criminal against CSI for entering into illegal transaction with BMRCL through KIADB for transfer of defence land and stop all further transaction of the land till the investigation is completed.

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Following this, the respondent no.4 registered Crime No. 262/2019 for an offence under Section 420 of IPC and took up investigation. The respondent no.4 passed an order of seizure of the bank account of the petitioner u/s 91 of Cr.P.C. in terms of an order dated 17.09.2019. The respondent no. 6 followed suit and initiated proceedings under section 5(1) of the PMLA Act, 2002 r/w Rule 3 of the

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PML (Issuance of Provisional Attachment Order) Rules, 2003 and after considering the material on record, passed an order dated 08.09.2020 provisionally attaching a sum of Rs.59,52,01,366/- lying in the accounts of the petitioner at State Bank of India, Sudham Nagar Branch.

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Being aggrieved by the aforesaid the petitioner has filed this petition challenging the initiation of proceedings against it.

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The learned senior counsel representing the petitioner submitted that following the proposal to acquire portion of the property owned by CSI, a letter dated 30.01.2017 was addressed by the Karnataka Central Diocese to BMRCL enclosing therewith all documents of title and requested it to correspond only with it on matters of acquisition. Following this, a notification under Section 28(1) was published on 16.03.2017 in the name of the petitioner and a final notification under Section 28(4) was published on 27.02.2018 showing the name of the petitioner as the owner / occupant. He claimed that after

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the compensation was deposited into the account of the petitioner, the respondent No.2 addressed a letter dated 05.07.2019 calling upon the petitioner to disclose the authority under which it had accepted the compensation along with supporting documents. This was followed by a letter dated 18.07.2019 addressed to Metro requesting it not to initiate action for acquisition without the concurrence of the Ministry of Defence. He contended that along with this letter the respondent no. 2 had enclosed an extract of the land granted to various organizations which included 11 acres of land granted to the All Saints Church during the years 1865, 1884 and 1898. He therefore contended that the petitioner was fully aware of the grant of the land in question to CSI. He contended that a meeting was scheduled at the headquarters of the respondent no. 3 on 24.08.2019 where the petitioner was requested to attend. However since the Bishop and other officers of the Karnataka Central Diocese were out of the

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Country, a communication was sent on 23.08.2019 to defer the meeting to any date after the first week of

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September, 2019. He contends that even before a meeting could be held to sort out the issues, the account of the petitioner was seized following which respondent no.6 had passed a provisional attachment order. The learned senior counsel contended that the petitioner is the owner of the land measuring 11 acres in sy. No. 275 of Bengaluru Civil Lines. He invited the attention of the court to an order of grant made by the then President at the Court of His Highness, the Maharaja of Mysuru on 04.11.1884 and submitted that this was granted to the Lord Bishop and Arch Deacon of Madras to be held by his successor. He next contended that the khata of the property granted to the petitioner in the records of the Bruhat Bengaluru Mahanagara Palike shown the name of the petitioner as the owner. He further contended that in terms of a deed dated 13.09.1905, duly registered, it was stated that an extent of land was granted to the Lord Bishop of Madras in terms of an instrument of grant dated 17.12.1884. He therefore submits that there were ancient documents which establish that from the year 1884 it was

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recognizned that the land was granted absolutely to the petitioner by the erstwhile Maharaja of Mysuru under his name, seal and authority. He also referred to a deed of sale dated 18.04.1972 executed by the petitioner in favour of BWSSB in respect of 9255.05 sq.yards lying within the church compound, where too it was mentioned that an extent of ten acres was acquired by the petitioner in terms of two orders of grant for four acres and six acres respectively of which the former was in the year 1865 and the latter was on 17.12.1884. He therefore contended that there are enormous documents which indicated that the property claimed by the petitioner was its own and therefore the respondent no.3 had no subsisting right, title or interest in the property and hence he could not allege that the land granted was for the purpose of a lease to the Church. He therefore contended that the complaint lodged by the respondent no.3 was baseless and was an attempt to give a civil dispute a criminal flare.

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Elaborating further he contended that from the year 1831 the State of Mysuru was administered by the British and a Commissioner was appointed who was respondentdesignated as Chief Commissioner after the year 1862. He claimed that certain historical events occurred during the later part of 18^th century paving the way for “Rendition of Mysuru in 1881” by the British Crown concerning the accession of Maharaja Chamarajendra Wodeyar to the Princly State of Mysuru. An instrument of transfer was executed on 01.03.1881, which recognized the paramountacy of the British and the Maharaja was placed in possession of the territories of Mysuru and was installed in the administration. He claimed that in respect of the British Cantonments in the said territories of Mysuru, the Maharaja had agreed that he shall grant free of all charge such land as may be required for such cantonments and shall renounce all jurisdiction within the lands so granted. He claimed that accordingly His Highness the Maharaja executed a memorandum of assignment of lands for Bangalore Cantonment on 05.04.1881 assigning the land

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forming the civil and military station, Bangalore and renouncing the exercise of all jurisdiction over those land in favour of the British crown. He contended that the cantonment of Bangalore comprised both civilian and military areas and not the cantonment area in the popular sense. He contended that All Saints Church, Bangalore was consecrated on 17.10.1870 on the land obtained in the year 1865. After the rendition and assignment in the year 1881 as aforesaid, there was a grant of the adjacent portion by the Govt. of India on 17.12.1884 in favour of the Lord Bishop and the Arch Deacon of Madras which was duly registered. He therefore contended that the portion of the land acquired by BMRCL was the place which belonged to All Saints Church. He contended that the Indian Church Act, 1927 was enacted consequent to the dissolution of a legal union between the Church of England and the Church of England in India which came into effect from 01.01.1928. As a result, All Saints Church was an Indian Church contained in Section 1 of the said Act and the property owned by it was held for the furtherance of

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religious, educational and philanthropy. He contended that u/s 6(1) of the said Act the Indian Church trustees (for short ‘ICT) was to be incorporated to a Royal Charter to represent the Indian Church and vesting of the properties in it without licence. He claimed that this implied that the ICT had full ownership in perpetuity of the Churches and the appurtenant land. Accordingly the ICT was incorporated on 11.06.1929 as a result of which all property was to vest in the ICT. After the Indian Independence Act, 1947, the jurisdiction exercised by the Crown Representative in the Bangalore Civil Station and Military Area was restored to His Highness, the Maharaja of Mysuru. Following this, two enactments amongst others came into existence on 04.08.1947 and 05.08.1948 respectively, namely the Retrocession (Miscellaneous Provisions) Act, 1947 and the Retroceded Area (Application of Laws) Act, 1948. Under Section 3 of Act, 1947 all rights to or interests in any immovable property situate in the retroceded area which, prior to the date of retrocession were granted by the Crown, were recognized and declared

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to have been validly granted or derived. He therefore contends that the respondent no. 3 cannot continue to claim that the land granted to the petitioner was leased to it and that the ownership of the land lay with the Ministry of Defence. He thus contended that the initiation of criminal proceedings against the petitioner is wholly unwarranted and deserves to be set at naught.

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Per contra, the learned counsel for respondents no. 1 to 3 filed a detailed statement of objections disputing the documents relied upon by the petitioner. It claimed that the petitioner could never become the owner of the property based on a transfer deed executed by the Indian Church Trustees to the Church of South India. They contended that the respondent no.1 was the owner of the property and any claim made by the petitioner does not confer any right in its favour. They also claimed that nine guntas of land which was sought to be acquired belonged to the respondent no.1. They contended that 11 acres of land was leased to All Saints Church by the respondent

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no.1 through the Quarter Master General in three tranches, i.e., during 1865, 1884 and 1898. They contended that the petitioner suppressed that the grant was not absolute but was in the form of a lease. They contended that the entire land bearing sy. No. 275 of Bangalore Civil Lines belonged to the respondent no.1 which was reflected in the Military Land Register maintained by the respondent no.2 and that the registers so maintained have a presumptary value. It enclosed an extract of the register which indicated that the land in sy. No. 275 of Bangalore Civil Lines measuring 231 acres 9 guntas was its estate. It also placed on record a letter dated 15.05.1953 addressed by the Secretary to the Government of Mysore to the Military Estate Officer, Madras enclosing therewith a copy of the existing list of military leases which included the lease of 11 acres of land to All Saints Church, Bangalore which indicated that the first grant was in perpetuity, free of rent, for the purpose of building a church and school while the second was for the purpose of building a parsonage and other church

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buildings while the third was to extend the compound of church and parsonage. It also disclosed that the properties could be resumed by giving one month’s notice on paying the value of the buildings erected thereon. He contended that the All Saints Church was not included in the second schedule to the Indian Church Act, 1927 and the same is evident from a letter dated 23.03.1948 addressed by the Government of India to various authorities. They thus contended that the petitioner cannot claim that the provisions of the Act of 1927 was applicable to the petitioner. They contended that the transfer of a portion of the granted land by the petitioner in favour of the BWSSB was illegal and without any authority. They contended that the Government of India was looking after the Churches under the ecclesiastical affairs and later it decided to wind up and transfer the churches and properties to different authorities. In terms of a notification dated 23.03.1948 it wound up the ecclesiastical affairs of the churches with effect from 01.04.1948 and all the Anglican churches found in the

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second schedule to the Indian church Act, 1947 were vested in the Indian Church Trustees. Under Rule 28 to 30 of the Indian Church (India) Statutory Rules, 1940 contain the consequences of the breach of the rules and violations of the same wound render it to liable for suitable action under law and the property could be resumed. They contended that a conjoint reading of the Rules 1940 read with the notification dated 23.03.1948 made it clear that the Indian Church Authorities had only beneficial rights to possess, use and control the site and building but the ownership was not vested or transferred to the church authorities at any point of time. They claimed that this position was made clear by a notification dated 03.08.1965 issued by the Ministry of Defence which declared that “after independence, the Churches will be vested in the Central Government and this vesting in ownership continues”. They contended that the military land register maintained by the respondent no.2 was upheld by a coordinate bench of this court in R.S.A. No. 699/2002.

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With these and other contentions the respondent no.1 to 3 claimed that the petitioner had no right, title or interest in the land acquired and therefore the complaint lodged by the respondent no.3 against the petitioner was justified.

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The respondent no.6 has also filed a statement of objections contending that once an offence under Section 420 of IPC is registered, the same being a scheduled offence under the PMLA Act, the respondent no.6 was justified in initiating action. It contended that before passing the impugned provisional order it had recorded the statements of all the parties concerned and after following the required procedure and after considering the entire material on record. It contended that in the grant certificate relied upon by the petitioner there is no mention of any survey number to identify the property and that the land acquired by BMRCL and the property granted to the petitioner were one and the same. It contended that the grant relied upon by the petitioner clearly disclose that it

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was only for the time being and no title therefore was conferred upon the Arch Deacon of Madras. It contended that in the statement of Dr. Prasanna Kumar Samuel, Bishop-CSI, Karnataka Arch Diocese, he accepted that no title was conveyed under the grant order dated 17.12.1884. It therefore contended that the proceedings initiated against the petitioner and the provisional order of attachment were justified.

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The petitioner filed its rejoinder to the statement of objections filed by respondents 1 to 3 claiming that the Government of Karnataka had not at any point of time claimed title to the subject land. It contended that under Annexure-R4 it was confirmed that the property was leased to the petitioner in the year 1865, 1884 and 1898 by the Quarter Master General to the All Saints Church authorities. It contended that there was no document to establish that the Maharaja of Mysuru had assigned the lands in question to the military authorities. It also contended that there was no document to establish that

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the subject property found part of Sy. No. 275 of Bangalore Civil Lines measuring 231.09 acres. It claimed that the records of the military land register and the sketch produced as Annexures-R1 and R2 were misconceived and placed on record a map showing the existence of All Saints Church in the civil and military station. It claimed that there was no document to establish that the Quarter Master General had granted the land to All Saints Church in 1865, 1884 and 1898. It contended that under Section 3 of the Crown Grants Act, 1895, all conditions and limitations contained in any grant shall be valid. They also placed on record a colour copy of the grant of land dated 17.12.1884 which was referred to in the registered document dated 13.09.1905.

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In support of his contentions, the learned senior counsel has relied upon the following judgments.

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(1) (1982) 2 SCC 134 (Government of Andhra Pradesh Vs. Thummala Krishna Rao and Another) where it was held that in a summary enquiry under Section 6 and 7 of the A.P. Land Encroachments Act, 1905, the title of the encroached property cannot be appropriately

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decided and such dispute has to be decided in a properly constituted suit.

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(2) (2007) 12 SCC 1 (Inder Mohan Goswami and another Vs. State of Uttaranchal and Others) where it is held that the veracity of the allegations made by the parties could be ascertained only on the basis of evidence and documents by a civil court and such dispute being purely a civil nature, initiation of criminal proceedings, is clearly an abuse of process of court.

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(3) (2018) 13 SCC 374 (Medmeme, LLC and Others Vs. Ihorse BPO Solutions Private Limited) where the court after noticing that the case was primarily alleging breach of contract in not making payment for the services rendered could be a civil dispute and initiation of criminal proceedings is an abuse of the process of law.

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(4) (2019) 2 SCC 401 (Vinod Natesan Vs. Stateof Kerala and Others) where it is held that when ingredients of Section 406 and 420 were not satisfied and did not disclose any criminality but instead indicated that a civil dispute was converted into a criminal dispute, courts would not hesitate to terminate the proceedings.

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(5) (1998) 8 SCC 1 (Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others) where it is held that when a notice is issued by an authority without jurisdiction, the High Court can entertain a writ

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petition under Article 226 of the Constitution of India even if an alternative statutory remedy is provided.

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I have considered the submissions made by the learned senior counsel for the petitioner as well as the learned counsel for the respondent no.1 to 3 and the learned counsel for respondent no.6. I have also perused the documents placed along with the writ petition as well as the statement of objections and the rejoinder.

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In the instant case while the petitioner claimed that a part of the land in its possession which was proposed to be acquired by KIADB for BMRCL, belonged to it on the basis of absolute grants made in its favour, the respondents 1 to 3 contended to the contrary and claimed that those grants were not absolute but were in the nature of a perpetual lease, free of rent and that no title was conferred on the petitioner. The petitioner claimed that it had received the compensation of rupees sixty crores from BMRCL which the respondents 1 to 3 claimed and contended that the petitioner had committed an act of

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fraud by receiving the compensation though it was not entitled to do so. The petitioner has tried to justify its title by referring to various documents and also to various enactments while the respondents 1 to 3 have claimed that the property vested in the Government of India and that the leases granted to the petitioner were also recognized and entered in the concerned register maintained in usual course. Therefore the moot question is “whether the land acquired by BMRCL was owned by the petitioner or not? And whether the petitioner, being a lessee had fraudulently claimed and received the compensation?”

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The answer to both these questions would tilt the balance in favour of the petitioner and or the respondents 1 to 3. This court in exercise of its power under Article 226 of Constitution of India or under 482 of Cr.P.C. can certainly not go into the aforesaid questions, which can only be done by a civil court which could render a finding of fact that either the petitioner or the respondents 1 to 3

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are the owners of the land acquired by KIADB. If only the respondents 1 to 3 had raised their claim to the compensation being disbursed to the petitioner, the procedure contemplated under Section 64 of the Right to Fair Compensation (Transparency in Land Acquisiton, Rehabilitation and Resettlement) Act, 2013 would have been complied with. As rightly contended by the learned counsel for the petitioner this is definitely a civil dispute that needs to be properly addressed and the respondent no.4 would not be in a position to adjudicate this complicated question of fact. Therefore, without expressing any opinion on the merits or the allegations made by the respondents 1 to 3, this court deems it fit to appropriate to pass the following order.

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ORDER

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(1) Writ Petition is allowed in part ;

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(2) The first information report registered by the respondent no.4 in crime no. 262/2019 for the offence punishable under section 420 of IPC and the consequent order of seizure dated 17.09.2019 by the respondent no.4 and the provisional order

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of attachment dated 08.9.2020 passed by the respondent No. 6 in F. No. ECIR/BGZO/03-2020/ 1176 are quashed.

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(3) The respondent no.5 is directed to retransmit the amount of compensation credited into the account of the petitioner at SBI Bank, Sudham Nagar Branch, (account no. 54042192645, 38448359323, 38448356865, 38567192184, 38678200258) to the account of the BMRCL, Bangalore forthwith. (4) The BMRCL is directed to deposit the compensation amount before the Land Acquisition, Rehabilitation and Resettlement Authority, Bengaluru City after notifying the petitioner and the respondents 1 to 3 so as enable them to make appropriate claim before the authority.

Sd/JUDGE

bvv

WP NO. 10731/2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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[THE CHURCH OF SOUTH INDIA TRUST ASSOCIATION (CSITA) VS. UNION OF INDIA AND OTHERS]

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RNJ

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16.02.2024

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(VIDEO CONFERENCING / PHYSICAL HEARING)

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ORDER ON 'FOR BEING SPOKEN TO'

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The petitioner has moved this petition for ‘Being Spoken To’ on the ground that the petitioner had sought for quashing the proceedings initiated by respondent No.6 in ECIR No.BGZO/ 03/2020/1176 dated 09.01.2020, but the same is not considered.

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In view of the law declared by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Others Vs. Union of India and Others¹ the quashing of the predicate offences by this Court in terms of the Order dated 20.01.2024, the registration of the case by respondent No.6 in ECIR No.BGZO/03/2020/1176 dated 09.01.2020 also deserves to be quashed. Consequently, in addition to the prayers granted to the petitioner vide Order dated 20.01.2024, the proceedings initiated by respondent No.6 in ECIR No.BGZO/03/2020/1176 dated 09.01.2020 is quashed.

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This order shall be read in conjunction with the main order.

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Sd/JUDGE

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Bvv List No.: 19 Sl No.: 1

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1 2022 Online SC 929

The Church of South India Trust Association (Csita) v. Union of India

Case brief

What is this about?

What did the court decide?

The Church of South India Trust Association (Csita) v. Union of India

Case brief

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What did the court decide?

What the court decided

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