State of West Bengal vs S. K. Ghosh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 140 of 1959

Decision Date: 16 April 1962

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, N. Rajagopala Ayyangar

In the matter titled State of West Bengal versus S. K. Ghosh, the judgment was delivered on 16 April 1962 by a bench of the Supreme Court of India comprising Justices K. N. Wanchoo, Bhuvneshwar P. Sinha, P. B. Gajendragadkar, and N. Rajagopala Ayyangar. The case was reported in 1963 AIR 255 and 1963 SCR (2) 111, with later citation in R 1984 SC1194 (26). The statutes involved were the Criminal Law Amendment Ordinance of 1944 (No. 38 of 1944), specifically sections 13(3) and 12(1); the Criminal Law Amendment Ordinance of 1943 (No. 29 of 1943) as amended by the Criminal Law (1943 Amendment) Amending Ordinance of 1945, section 10; Article 20(1) of the Constitution of India; and sections 120B, 409, and 53 of the Indian Penal Code, 1860.

The respondent, who had served as Chief Refugee Administrator of the Burma Refugee Organisation from November 1942 to August 1944, was charged under sections 120B and 409 of the Indian Penal Code before the Second Special Tribunal established under the 1943 Ordinance as amended. The Tribunal found the respondent guilty and imposed a sentence of five years’ rigorous imprisonment together with a fine of Rs 45 lakh, concluding that the money obtained through the offences exceeded that amount. The respondent appealed, and the High Court affirmed both the conviction and the sentence. The matter was further appealed to this Court, which upheld the High Court’s finding that at least Rs 30 lakh had been misappropriated and declined to interfere with that determination.

Subsequently, the Provincial Government, invoking section 3 of the 1944 Criminal Law Amendment Ordinance, applied to the District Judge for attachment of certain properties alleged to have been purchased with the misappropriated funds. The District Judge ordered attachment of those properties. Later, relying on section 13 of the 1944 Ordinance, the District Judge directed that Rs 30 lakh, together with the costs of attachment, be forfeited to the Union of India from the attached properties, and that the remaining fine of Rs 45 lakh be recovered from the residual value of those properties. The District Judge also instructed the receiver to report on the valuation, as well as the costs of attachment and management of the attached assets.

The respondent challenged this order before the High Court. A two‑judge Division Bench of the High Court agreed to set aside the District Judge’s order. One judge held that because no order had been obtained under section 12(1) of the 1944 Ordinance, no application could be entertained under section 13(3) of that Ordinance. The other judge reasoned that forfeiture was not prescribed as a punishment under the 1944 Ordinance, and that the Ordinance, having come into force after the offence was committed, could not impose forfeiture without violating Article 20(1) of the Constitution. The State of West Bengal appealed this High Court decision.

In this appeal the Court considered the contention that because the 1944 Ordinance became effective only after the offence had been committed, any forfeiture ordered under that Ordinance would violate Article 20(1) of the Constitution. The State of West Bengal appealed the earlier judgment. The Court held that the High Court’s order must be set aside and that the District Judge’s order should be restored. The Court explained that Section 12(1) of the 1944 Ordinance required, at the prosecution’s request, that the court make a finding regarding the amount of money or the value of the property that had been obtained by the accused through the commission of the offence. This requirement was satisfied whether the request was made by written application or orally, and a court finding in accordance with the section fulfilled the statutory duty. The Court further observed that a finding made under Section 10 of the 1943 Ordinance, as amended in 1945, also fulfilled the requirement of Section 12(1) of the 1944 Ordinance. Of the two categories of property contemplated by Section 3 of the 1944 Ordinance for attachment, Section 12 dealt only with determining the value of the property that had actually been procured by the offence, and the Criminal Court was required to evaluate only that property and no other. Because the property attached in the present case was not property obtained by the commission of the offence, the Criminal Court’s function was limited to declaring the amount of money that had been procured by the offence. It was for the District Judge, in considering forfeiture under Section 13(3), to value any other properties purchased with that money, and the District Judge performed that valuation in this case. The Court held that forfeiture under Section 18(3) of the 1944 Ordinance did not constitute a penalty within the meaning of Article 20(1) of the Constitution, nor could it be equated with forfeiture of property under Section 53 of the Indian Penal Code. The Ordinance did not provide for any punishment or penalty; it provided only for the attachment of money or property obtained by the offence, or of any other property of the offender where the former was unavailable, to prevent disposal or concealment of such property. The forfeiture provision was therefore a more expeditious method of realizing government money or property than a civil suit, and it did not affect the right to recover the fine imposed by the Criminal Court in connection with the offence. Since the provision was not concerned with any punitive conviction, Article 20(1) could not be applied to orders made under it. The Court referred to Rao Shiv Bahadur Singh v. State of Vindhya Pradesh, (1953) SCR 1188, for support. The judgment was delivered in Criminal Appellate Jurisdiction, Criminal Appeal No. 140 of 1959, appealed from the Calcutta High Court’s order dated 20‑22 August 1958 in Criminal Appeal No. 176 of 1958, with counsel representing the appellant and the respondent.

In this appeal, the Court considered a certificate that had been issued by the Calcutta High Court. The respondent had been appointed Chief Refugee Administrator of the Burma Refugee Organisation in November 1942 and continued in that position until 25 August 1944, when he was suspended. It was alleged that, while serving as Chief Refugee Administrator, the respondent had conspired with certain individuals to misappropriate large sums of money that belonged to the Government and that were under his control. Because of those allegations, the respondent’s suspension took effect on 25 August 1944 and an investigation into the alleged offences was opened. Following the commencement of the investigation, the respondent was arrested in October 1944; he later obtained bail. Subsequently, on 21 July 1945, the respondent faced prosecution before the Second Special Tribunal that had been constituted under the Criminal Law Amendment Ordinance No. 29 of 1943 (referred to as the 1943‑Ordinance). The prosecution was based on sections 120‑B and 409 of the Indian Penal Code. While the trial proceeded, the legislature enacted the Criminal Law Amendment Ordinance No. 38 of 1944 (the 1944‑Ordinance). The purpose of that Ordinance was to prevent the disposal or concealment of money or other property that had been obtained through certain scheduled offences under the Indian Penal Code; section 409 of the Penal Code was among the offences covered, as was any conspiracy to commit such an offence. Section 3 of the 1944‑Ordinance authorised the Provincial Government, when it had reason to believe that a person had committed a scheduled offence, to apply to the District Judge having jurisdiction over the area where the person ordinarily resided or carried on business. The application could seek the attachment of money or other property that the Government believed had been obtained by the offender in the course of the offence. If the specific money or property could not be attached, the Government was permitted to request attachment of other property of the offender that was of a value roughly equivalent to the unattachable assets. This provision operated in a manner similar to an attachment before judgment in a civil proceeding, allowing the Provincial Government to secure either the directly implicated assets or, failing that, other assets of comparable value, even though no offence had been alleged concerning the latter assets. Accordingly, on 21 November 1944, the Provincial Government filed an application under section 3 before the District Judge seeking attachment of certain properties on the ground that those properties had been purchased with money that the respondent allegedly obtained through offences punishable under sections 120‑B and 409 of the Indian Penal Code.

The Provincial Government, relying on the 1944 Ordinance, applied for attachment of certain properties on the basis that the respondent had bought those properties with money that he had obtained by committing offences under sections 120‑B and 409 of the Indian Penal Code. A second application for attachment of additional properties was filed on 22 February 1945. After hearing the respondent, the District Judge ordered that both groups of properties be attached and subsequently extended the attachment orders at various times. These attachment orders were made even before the respondent’s matter was referred for trial before the Special Tribunal. The Special Tribunal, after a lengthy trial, finally convicted the respondent on 31 August 1949. While the trial was pending, the Criminal Law (1943 Amendment) Amending Ordinance, No. 12 of 1945 (hereinafter “the Ordinance”) came into force on 12 May 1945. The Ordinance amended section 10 of the 1943 Ordinance, providing that when a person charged before a Special Tribunal for an offence listed in the Schedule is found guilty, the Tribunal must, regardless of any provision of the Indian Penal Code, impose a fine that is not less than the amount of money or value of property that the offender obtained by means of the offence. Consequently, when the Special Tribunal found the respondent guilty of the offences under sections 120‑B and 409, it sentenced him to five years’ rigorous imprisonment and imposed a fine of forty‑five lakh rupees on the charge of conspiracy. The Tribunal explained that the fine was set at that amount because it believed the money obtained by the respondent through the offence exceeded forty‑five lakh rupees. The respondent appealed the conviction to the High Court, which affirmed both the conviction and the fine. However, the High Court observed that the money misappropriated by the respondent in the conspiracy was at least thirty lakh rupees. The High Court nevertheless did not alter the fine, holding that the amended section 10 of the 1943 Ordinance only prescribed the minimum fine and that the Special Tribunal retained discretion under ordinary law to impose any higher amount. The respondent then appealed to this Court, which dismissed the appeal. This Court held that the findings clearly showed that at least thirty lakh rupees had been misappropriated by the respondent as a result of the conspiracy, and therefore the minimum fine had to be of that magnitude; but, considering the serious nature of the defalcation and the position of trust in which he had

In this case the Supreme Court had earlier concluded that, given the respondent’s position of trust, it could not interfere with the sentence, and the judgment was delivered on 12 December 1956. Subsequently, on 8 January 1957 an application was filed before the relevant District Judge invoking section 13 of the 1944 Ordinance; the application prayed that, since the courts had found the respondent had procured at least Rs 30 lacs by committing the offences listed in the Schedule to the 1943 Ordinance, the properties that had been attached under section 3 of the 1944 Ordinance and were then in the hands of a receiver should be confiscated and that the receiver should be ordered to deliver all such properties to the Government of India. The District Judge issued an ex parte order granting this application on 10 January 1957. After that, the respondent and his wife each filed applications seeking the vacating of the ex parte order, and the District Judge accordingly vacated the order on 11 May 1957. Finally, after hearing the respondent and his wife, the District Judge passed a final order on 22 March 1958, which is the order now under appeal. The principal objection raised before the District Judge concerned the absence of any finding under section 12 of the 1914 Ordinance, and the contention that, without such a finding, the Judge lacked authority to act under section 13 of the 1944 Ordinance. The District Judge rejected this objection, construing sections 12 and 13(3) of the 1944 Ordinance to mean that the sum of Rs 30 lacs together with the costs of attachment must first be forfeited to the Union of India from the attached properties, after which the fine of Rs 45 lacs could be recovered from the remaining assets. Because forfeiture required valuation of the properties, the Judge directed the receiver to report the cost of attachment, including management expenses, and ordered both parties to submit their estimates of the properties’ values, stipulating that if the parties could not agree a court‑appointed valuer would assess the properties. The respondent then appealed this order to the High Court, challenging the District Judge’s jurisdiction and the procedure followed. A Division Bench of the High Court, comprising Justices Mitter and Bhattacharya, heard the appeal. Two principal points were raised before the High Court: first, that no proceedings under section 12 of the 1944 Ordinance had been instituted regarding the money obtained through the offence and no finding had been made under that section, rendering the District Judge’s action under section 13 ultra vires; and second, that even assuming jurisdiction existed, the proceedings could not continue because they would contravene Article 20(1) of the Constitution.

The appellant argued that the proceedings could not be continued under section 13 of the 1914‑Ordinance because they would run afoul of article 20(1) of the Constitution. The first judge, Mitter J., interpreted sections 12 and 13 of the 1914‑Ordinance to mean that action under section 13 could be taken only after an order under section 12 had been obtained. In his view, no such order under section 12 existed; the only finding was that the respondent had obtained at least thirty lakh rupees by committing the offence charged under section 10 of the 1943‑Ordinance as amended in 1945. That finding, according to Mitter J., did not satisfy the requirement of section 12. Consequently, he held that no proceeding could be launched under section 13 for the forfeiture of property valued at thirty lakh rupees and that the only remedy available was the recovery of a fine of forty‑five lakh rupees. Because of this conclusion, Mitter J. did not express any opinion on whether article 20(1) of the Constitution applied to the present case.

The second judge, Bhattacharya J., disagreed with the interpretation given by Mitter J. He held that the District Judge possessed jurisdiction to forfeit property worth thirty lakh rupees under section 13. However, he also observed that section 53 of the Indian Penal Code treats forfeiture as a form of punishment distinct from a fine, and that the forfeiture contemplated by the 1944‑Ordinance had not yet been effected. On that basis, he argued that article 20(1) of the Constitution would apply. His reasoning rested on the fact that the 1944‑Ordinance came into force on 23 August 1944, whereas the substantive period during which the offences were committed ended in July 1944. Since forfeiture was not prescribed as a punishment before the 1914‑Ordinance and the 1944‑Ordinance became operative after the offences had been committed, he concluded that ordering forfeiture would violate article 20(1). Accordingly, Bhattacharya J. concurred with Mitter J. that the order of the District Judge should be set aside, though he arrived at that conclusion on a different ground.

Subsequently, the State of West Bengal applied for a certificate under the appropriate provision, the certificate was granted, and the matter thus entered this Court. The appellant now contends that Mitter J.’s view—that a specific order under section 12 of the 1944‑Ordinance was a prerequisite—was incorrect. The appellant further asserts that, in substance, an order under section 12 had already been made by the trial court, which would confer jurisdiction on the District Judge to forfeit property up to the value of thirty lakh rupees under section 13. Additionally, Mitter J. had previously held that it was the duty of the trial court to value the property attached under section 12, and because such valuation had not been carried out, that formed another basis for refusing action under section 13.

The appellant argued that the Court’s failure to value the property attached under section twelve constituted an additional reason for holding that no forfeiture could be ordered under section thirteen. This argument challenged the view expressed by Mitter J. The appellant also disputed the opinion of Bhattacharya J. that article twenty of the Constitution applied to the present facts, contending that the forfeiture provision in section thirteen of the 1944 Ordinance was not a punishment but merely a mechanism for the Government to recover money that had been embezzled by the respondent. Accordingly, the appellant maintained that article twenty could not be invoked. It was further submitted that the Government could have instituted a civil suit to recover the misappropriated funds or property, and that section thirteen merely provided a speedier method for achieving the same objective. Counsel for the respondents, on the other hand, endorsed the High Court’s approach on both issues and urged that there was no justification for disturbing the order previously rendered by the High Court. The Court first examined the interpretation advanced by Mitter J. concerning sections twelve and thirteen of the 1944 Ordinance. The relevant statutory language of the two sections was then set out for consideration.

Section twelve of the Ordinance reads: “Criminal Courts to evaluate property procured by scheduled offence: (1) Where before judgment is pronounced in any criminal trial for a scheduled offence it is represented to the Court that an order of attachment of property has been passed under this Ordinance in connection with such offence, the Court shall, if it is convicting the accused, record a finding as to the amount of money or value of other property procured by the accused by means of the offence. (2) In any appeal or revisional proceedings against such conviction, the appellate or revisional court shall, unless it sets aside the conviction, either confirm such finding or modify it in such manner as it thinks proper. (3) In any appeal or revisional proceedings against an order of acquittal in a trial such as is referred to in sub‑section (1), the appellate or revisional Court, if it convicts the accused, shall record a finding as referred to in that sub‑section. Section thirteen provides: “Disposal of attached property upon termination of criminal proceedings: (1) Upon the termination of any criminal proceedings for any scheduled offence in respect of which any order of attachment of property has been made under this Ordinance or security given in lieu thereof, the agent of the Provincial Government shall without delay inform the District Judge, and shall—where criminal proceedings have been taken in any Court— furnish the District Judge with a copy of the judgment or order of the trying Court and with copies of the judgments or orders, if any, of the appellate or revisional Courts thereon. (2) Where it is reported to the District Judge under sub‑section (1) that cognizance of the alleged scheduled offence has not been taken or where the final judgment or order of the criminal Courts is one of acquittal, the District Judge shall forthwith withdraw any orders of attachment of property made in connection with the offence, or where security has been given in lieu of such attachment, order such security to be returned.”

The District Judge was required to act on the information provided by the agent of the Provincial Government. Accordingly, the Judge had to withdraw any order of attachment of property that had been made in connection with the offence, and if security had been supplied in lieu of such attachment, the Judge had to order that the security be returned. Where the Criminal Courts finally convicted the accused, the Judge was obliged to order that, from the property of the convicted person that had been attached under the Ordinance or from the security given in its place, an amount or value be forfeited to His Majesty. That amount was to be the sum identified in the final judgment or order of the Criminal Courts as having been procured by the convicted person through the offence, together with the cost of attachment as fixed by the District Judge. In addition, if the final judgment or order imposed or upheld a fine—whether the fine stood alone or was part of a composite sentence—the Judge could, without prejudice to any other method of recovery, direct that the fine be recovered from the remaining portion of the attached property or from the security that had been furnished in lieu of attachment.

In a situation where the sums ordered to be forfeited or recovered under the preceding provision exceeded the value of the property attached belonging to the convicted person, and where property belonging to any transferee of the convicted person had also been attached under section 6, the District Judge was required to order that the balance of the forfeiture amount, together with the cost of attachment of the transferee’s property as determined by the Judge, be forfeited to His Majesty from the transferee’s attached property or from the security supplied in place of that attachment. The Judge could also, without prejudice to any other recovery method, order that any portion of the fine which had not been recovered from the convicted person’s property be recovered from the transferee’s attached property or from the corresponding security. If, after the implementation of the orders made under the foregoing subsections, any property remained under attachment for a scheduled offence or any security remained with the District Judge, the Judge was compelled to withdraw the lingering attachment order or, as appropriate, to return the remaining security. The judgment further noted that the authority to apply for attachment was set out in section 3 of the Act, that section 5 dealt with the investigation of objections to attachment, and that under subsection 3 of section 5 the District Judge was empowered to make an attachment absolute, to vary it by releasing part of the property, or to withdraw the order altogether. In the case presently before the Court, the District Judge had exercised such powers.

In the present case the District Judge confirmed the attachment order as absolute, and the properties have remained under attachment since that time. It is appropriate to note that section 3 of the relevant Act allows for two categories of property to be attached: first, property that has been obtained through the commission of the offence, whether that property takes the form of money, movable assets or other immoral property; second, property that does not fall within the first category. The charge against the respondent was that he had embezzled money. An application for attachment under section 3 was filed because the respondent had utilised the money obtained by the offence to acquire certain properties. Consequently, the properties that were attached were not themselves the proceeds of the offence but rather other properties purchased with those proceeds. Nevertheless, section 13 applies irrespective of whether the attached property belongs to the first or the second category, and the District Judge possessed jurisdiction to order forfeiture of the attached property under section 13, provided that the conditions of section 12 were satisfied. The issue that required determination, therefore, was the interpretation of section 12(1). That subsection provides that, before the trial court pronounces its judgment, if a representation is made to the court that an attachment order under section 3 has been issued in connection with the offence, then, on convicting the accused, the court shall record a finding regarding the amount of money or the value of other property that the accused procured by means of the offence. In essence, section 12(1) obliges the trial court to be asked to record a finding on the quantum of money or the value of other property obtained by the accused through the offence for which he is being tried. The statute does not prescribe a specific procedure for making that representation to the court. In the Court’s view, the requirement of section 12(1) is fulfilled when, at the request of the prosecution, the trial court furnishes a finding on the amount of money or the value of other property procured by the accused. Such a representation may be made by a formal application or even orally, as long as the court ultimately records the requisite finding; this, in the Court’s opinion, satisfies the statutory mandate of section 12(1). It is not necessary for the court, when delivering the finding, to explicitly state in the order that the finding is made on a representation under section 12(1). The Court also observed that, under section 10 of the 1943 Ordinance as amended in 1945, when imposing a fine the court must make a finding as to the amount of money or the value of other property found to have been procured by the offender, a requirement that aligns with the purpose of section 12(1).

Section ten of the 1943 Ordinance, as amended in 1945, obliges the court, when imposing a fine, to make a finding as to the amount of money or the value of other property that the offender obtained by means of the offence. That finding is required so that the court can comply with the provision that sets a minimum fine. The Court observed that there is no reason why a finding made for the purpose of section ten, which determines the amount of money or value of property procured by the offender, should not also be treated as a finding under section twelve paragraph one of the 1914 Ordinance. In the Court’s view the two findings are identical in effect; the only distinction lies in the procedure. Under section ten the court may issue the finding on its own initiative, whereas under section twelve paragraph one the finding must be made on a representation made by the prosecution. Nevertheless, in either circumstance the result is the same—a determination of the amount of money or value of other property obtained by the offender through the offence. Both statutes therefore require exactly this assessment.

The Court noted that, although in the present case there was no written application by the prosecution under section twelve paragraph one of the 1914 Ordinance, it is possible that the court was asked orally to determine the amount of money or value of property procured by the offence. The Court held that as long as a finding is recorded concerning the amount of money or the value of other property obtained by the offender, the requirement of section twelve paragraph one of the 1944 Ordinance is satisfied. Accordingly, the Court expressed the opinion that the view expressed by Justice Bhattacharya was correct, while the view expressed by Justice Mitter was not. The Court further explained that section thirteen paragraph three of the 1944 Ordinance, which deals with forfeiture, mandates that the final judgment of the criminal court contain a finding as to the amount of money or value of the property pursuant to section twelve. Once such a finding is present, the District Judge will know the exact amount to be forfeited if he is called upon to make a forfeiture order under section thirteen paragraph three. Therefore, the Court concluded that a criminal court’s judgment containing a finding of the amount of money or value of property procured by the offence fulfills the requirement of section twenty‑one of the 1944 Ordinance, and that the stipulation that the finding be made on a prosecution representation is merely a formality. Obviously, even a determination under section ten of the 1943 Ordinance as amended in 1945 of the amount procured by the offence must be at

In this matter, the Court observed that the prosecution was responsible for supplying the material necessary for the determination of the amount procured, and that determination would serve as the basis for fixing the fine under section ten. The Court therefore rejected the view expressed by Mitter J., who had insisted that a specific finding must be framed in terms of “on the representation of the prosecution the court finds under section twelve paragraph one that such‑such amount was procured by means of the offence.” The Court held that such a formulation was unnecessary. It noted that the criminal court in the present case had already made a clear finding concerning the sum of money obtained by the respondent through the offence, specifying that the amount was at least thirty lakh rupees. On the basis of that finding, the District Judge possessed jurisdiction to order the forfeiture of any property attached up to that monetary value. Further, the Court assessed that Mitter J.’s position that property attached under section three of the 1944 Ordinance had to be valued by the criminal court was plainly incorrect and could not be sustained by the language of section twelve paragraph one. Section three authorises two categories of attachment: first, the money or other property directly procured by the offence; second, any other property that is not itself the product of the offence. Section twelve paragraph one requires the criminal court, when money has been procured, to determine the amount of that money, and when other property such as diamonds or rubies has been procured, to assess the value of that property. The provision does not extend to the valuation of property that falls outside the category of property procured by the offence. Consequently, the criminal court was not obliged to evaluate the second class of property listed in section three. In the present case, the only property procured by the offence was money; therefore the criminal court’s task was limited to declaring the amount of money obtained, which it did by finding it to be at least thirty lakh rupees. The property that had been attached under section three was not the property directly procured by the offence. The two applications filed under section three demonstrated that the respondent had initially procured money through the offence and later converted that money into the attached property. Accordingly, the attached property was not the product of the offence, and there was no requirement for the criminal court to value that attached property.

With respect, the Court observed that the error made by Mitter J. lay in confusing the property that was obtained by the commission of the offence with other property that was not obtained by the offence but could nevertheless be attached under section 3. The Court explained that the latter category of property does not need to be valued by the criminal court; instead, its valuation is the responsibility of the District Judge when he considers the question of forfeiture under section 13(3). The Court noted that this is precisely what the District Judge ordered in the present case.

The Court therefore held that the District Judge possessed jurisdiction to order forfeiture of the attached property to the extent of Rs 30 lacs, because that amount had been identified by the criminal court as having been procured by the commission of the offence. To give effect to the forfeiture, the Court stated that the District Judge would naturally have authority to require valuation of the attached property so that he could forfeit it under section 19(3) to the extent of the amount obtained by means of the offence.

The Court then turned to the contention that had earlier received support from Bhattacharya J., namely that the provision of section 13(3) constituted a punishment. The Court observed that, because the 1944 Ordinance was not in force at the time the offence was committed, section 13(3) could not be applied to the respondent without violating Article 20(1), which bars imposing a penalty greater than that which could have been imposed under the law then in force.

Two arguments were raised on behalf of the appellant concerning this point. First, it was argued that the respondent remained in office until 25 August 1944, while the Ordinance became effective on 23 August 1944, and that the conspiracy which generated the money continued after the Ordinance took effect. Consequently, the appellant contended that Article 20(1) could not apply because the respondent was not being subjected to a penalty greater than that which could have been imposed at the time of the offence.

Second, it was contended that the forfeiture provided by section 13(3) was not a penalty within the meaning of Article 2(1); rather, it was merely a mechanism for recovering money belonging to the Government that had been embezzled. The appellant argued that the Government could alternatively institute a suit to recover the embezzled money, and that section 13(3) simply offered a speedier remedy, not a penalty within the scope of Article 20(1). The Court indicated that it was unnecessary for the purpose of the appeal to decide whether the respondent’s continuation in office until 25 August 1944 and the Ordinance’s commencement on 23 August 1944 would remove the case from the ambit of Article 20(1).

The Court concluded that the forfeiture provided under clause 13(3) was not a penalty within the meaning of Article 20(1) and therefore the second argument advanced on behalf of the appellant prevailed. It observed that the 1944 Ordinance stood as an independent enactment and was not merely an amendment to the 1943 Ordinance. Although the 1944 enactment was described as “The Criminal Law Amendment Ordinance,” its substantive provisions dealt principally with the recovery of money or property belonging to the Government that had been obtained by the offender through the commission of the offence. An examination of the sections of the 1944 Ordinance made this clear. Section 3 authorised an application for attachment of property; section 4 provided for an interim attachment; section 5 dealt with the investigation of objections to attachment; section 6 authorised attachment of property belonging to bad‑faith transferees; section 7 concerned execution of attachment orders; section 8 allowed security in lieu of attachment; section 9 dealt with administration of attached property; and section 10 prescribed the duration of attachment. Section 11 set out the procedure for appeals. Subsequent sections 12 and 13 followed, and finally sections 14 and 15 respectively barred certain proceedings and protected actions taken under the Ordinance. From this structure the Court inferred that the Ordinance contained no provision for punishment or penalty; rather, it provided for the attachment of money or property acquired by the offence, or, if such property was unavailable, for the attachment of any other property of the offender, with the purpose of preventing disposal or concealment of that property. Clause 13(3), which was the point of focus, directed that the District Judge should order that, from the property of the convicted person attached under the Ordinance or from the security given in lieu of such attachment, an amount or value determined by the final judgment or order of the criminal courts under clause 12 and found to have been procured by the convicted person through the offence should be forfeited to His Majesty, together with the costs of attachment as assessed by the District Judge. The provision further allowed that, where the criminal court’s final judgment or order imposed or upheld a fine, the District Judge could, without prejudice to any other mode of recovery, direct that the fine be recovered from the residue of the attached property or from the security given in lieu of attachment. The Court held that the forfeiture under clause 13(3) could not be equated with the forfeiture of property provided in clause 53 of the Indian Penal Code. While clause 53 clearly constituted a penalty or punishment within the meaning of Article 20(1), it required an order of forfeiture to be passed by the court trying the offence, where a specific provision for forfeiture existed in the relevant section of the Penal Code. In contrast, the 1944 Ordinance did not contain any provision that imposed a punishment for any offence, and the District Judge, being a principal court of civil jurisdiction, possessed no jurisdiction to try offences under the Indian Penal Code. Consequently, the Court concluded that the order of forfeiture under clause 13(3) could not be regarded as the infliction of a penalty within the meaning of Article 20(1).

The Court noted that the forfeiture provided for in the section of the Indian Penal Code is different from the forfeiture envisaged in the 1944 Ordinance. It observed that the Ordinance contains no provision that creates any kind of punishment for any offence. Moreover, the Court emphasized that the District Judge, who sits in a principal civil court, does not possess jurisdiction to try a criminal offence under the Indian Penal Code. Consequently, an order of forfeiture issued by the District Judge pursuant to section 13(3) of the Ordinance cannot be treated as the imposition of a penalty within the meaning of Article 20(1) of the Constitution.

Article 20(1) concerns the conviction of persons for offences and the imposition of penalties. The provision contains two distinct safeguards. First, it mandates that no person shall be convicted of an offence unless the act charged as an offence violated a law that was in force at the time of its commission. Second, it provides that no person shall be subjected to a penalty greater than that which could have been imposed under the law that was in force at the time the offence was committed. In essence, Article 20 therefore deals exclusively with punishment for criminal offences and enshrines the principles that an act not unlawful at the relevant time cannot be punished, and that a penalty cannot exceed the maximum prescribed by the law applicable at that time.

The Court further explained that the forfeiture power under section 13(3) of the Ordinance does not relate to the imposition of any penalty on a person for having committed an offence. If the forfeiture under section 13(3) were truly a penalty for a convicted offender, the Ordinance would have to contain a clear provision to that effect, and the penalty would have to be imposed by the criminal court that tried the offender. The respondent’s argument, according to the Court, was based solely on the use of the word “forfeited” in section 13(3) and on the presence of the word “forfeiture” in section 53 of the Indian Penal Code.

The Court clarified that while section 53 of the Indian Penal Code treats forfeiture as a penalty, the language in section 13(3) merely provides for the recovery by the Government of money or property that the accused may have obtained by means of the offence, such as through embezzlement. The mere occurrence of the word “forfeited” does not automatically transform the provision into a penalty. The Court pointed out that the term “forfeiture” appears in other statutes without carrying the notion of punishment within the meaning of Article 20(1). As an illustration, the Court referred to section III(g) of the Transfer of Property Act, No. 4 of 1882, which speaks of the termination of a lease by forfeiture, a usage unrelated to penal sanction.

Accordingly, the Court concluded that the forfeiture authority conferred by section 13(3) of the Ordinance, even in cases involving offences such as embezzlement of government money or property, functions as a mechanism for the swift recovery of government assets. This mechanism is distinct from any criminal penalty and therefore does not fall within the scope of the protections guaranteed by Article 20(1).

In this case, the Court observed that forfeiture provided in section 13(3) for offences involving the embezzlement of government money or property functions as a faster means of recovering government assets than a civil suit, which the Government could also initiate without interfering with the right to collect any fine imposed by a criminal court in relation to the offence. The Court referred to Rao Shiv Bahadur Singh v. The State of Vindhya Pradesh, where article 20(1) of the Constitution was examined, and noted that the prohibition against conviction and punishment under ex‑post‑facto laws applies to both statutes enacted after the Constitution and those enacted before it, insofar as they are applied to pending proceedings. The Court further explained that article 20 forbids only conviction or sentencing under an ex‑post‑facto law, not the conduct of the trial itself, and that a trial held under a procedure different from that existing at the time of the offence or before a different competent court cannot be regarded as unconstitutional. Consequently, the Court held that only convictions and punishments defined in section 53 of the Indian Penal Code fall within the ambit of article 20(1). A conviction or punishment imposed under an ex‑post‑facto law would be invalid under article 20(1), but the provisions of section 13(3) that are the subject of the present appeal do not concern conviction or punishment; therefore, article 20(1) has no application to orders made under section 13(3). The Court also noted the citation (1) [1953] S.C.R. 1188, which supports this interpretation.

Counsel for the respondent then drew the Court’s attention to the Criminal Law (1943 Amendment) Amending Ordinance, No 7 of 1946, which further amended section 10 of the 1943 Ordinance. It was uncontested that the 1946 Ordinance, which amended section 10, did not apply to the respondent’s trial. The High Court, in the respondent’s appeal against his conviction, had held that the amendment made by the 1946 Ordinance could not affect a case that was pending before the tribunal on the date the 1946 Ordinance became law. Accordingly, the respondent could not rely on the provisions of section 10 as amended by the 1946 Ordinance, and his case had to be governed by section 10 as it stood after the 1945 amendment. The Court observed that although section 10 of the 1943 Ordinance, as amended in 1945, established a minimum fine, it still allowed the criminal court to impose a fine that exceeded that minimum. This distinction was important for determining the appropriate fine in the respondent’s case.

In this case the Court observed that the provision of section 10 as it stood after the 1945 amendment required only a single fine, which represented the minimum amount, and did not split the fine into two separate parts as the 1946 Ordinance had done. The Court also referred to the High Court’s reasoning in the respondent’s appeal from his conviction, noting that the liability to impose a fine in addition to a term of imprisonment for a public servant guilty of criminal breach of trust, or for a person involved in a criminal conspiracy to commit an offence under section 409 of the Indian Penal Code, was not a new creation of section 10 of the 1943 Ordinance. That liability already existed under the Indian Penal Code, where the court had discretion to impose a fine alongside imprisonment. By contrast, section 10 of the 1943 Ordinance made the imposition of a fine mandatory and fixed a minimum amount, while still leaving the court free to impose a fine of any higher amount. Under the Penal Code, a Court of Session could award any fine it deemed appropriate, and there was no statutory ceiling on that amount except that the fine should not be excessive, as prescribed in section 63 of the Indian Penal Code.

The Court further held that the fine of Rs 45 lacs imposed in the present proceedings bore no relation to the amount that could be forfeited under section 13(3) of the relevant law. Section 13(3) expressly provides that the District Judge must first forfeit attached properties up to the monetary limit determined under section 12; only after that step, if any attached properties remain, may the fine imposed by the criminal court be recovered from those remaining assets. The fact that the criminal court, applying section 10 of the 1943 Ordinance, might have considered the amount of money obtained through the offence in fixing the fine does not alter the construction of section 13(3). Consequently, the District Judge was correct in holding that the attached properties should first be liquidated to the extent of Rs 30 lacs as required by section 13(3), and only thereafter could the Government seek to realize the remaining Rs 45 lacs fine from any surplus property. The respondent therefore could not rely on the amendment made to section 10 by the 1946 Ordinance; the law as it existed in 1945, which applied to the respondent, rendered the District Judge’s order proper. Accordingly, the Court allowed the appeal, set aside the High Court’s order, reinstated the District Judge’s order, and directed that the District Judge proceed with the further steps required by law.