Case: Tejkumar Balakrishna Ruia Vs. A.K.Menon

2. The appellant became a notified person under the provisions of Section 3(2) of the Act on 2-7-1992. On 9-10-1994, he was appointed as an advisor by Killick Nixon Ltd. with effect from 8-10-1994. By reason of such appointment he is entitled to be paid consultancy fees in the sum of Rs. 5000 per month by the said Company. By a letter dated 7-8-1995, to the Manager, Dena Bank, the appellant applied to open a new current account in his name to be operated by him. On 6-9-1995, the appellants advocates were informed that the matter had been referred to the Head Office of the bank and by a letter dated 27-10-1995, that the matter had been referred to the custodian appointed under the Act. The petitioner filed a petition on 23-11-1995 in the Special Court and sought a declaration that the income "earned by way of the aforesaid employment is not liable for attachment" and permission "to open a new bank account and operate the same in the normal course"3. The petition was dismissed by the order under appeal. The Special Court proceeded upon the basis that the appellant was "genuinely seeking release of an income which he is earning from his services". However, the Special Court said that if the interpretation which the appellant wanted it to give was accepted, it could result in a very clever method of siphoning off assets which could and must stand attached. The Special Court noted that even after 3 years monies which had been siphoned off had not been traced. It was thus evident that the notified parties or some of them had monies or assets which were lying in some undisclosed place. One of the simplest methods to bring such moneys into the open and start using them was to ostensibly render services to somebody else who then paid the notified party the purported income or for somebody to give to the notified party a gift or for a notified party to suddenly inherit some assets. This would become a method to defeat the object of the Act and could not be permitted. The Special Court then dealt with the provisions of Section 3(3) and held that the words therein "on and from the date of the notification" meant that all assets which were available on the date of the notification and all assets which became available from and after that date stood attached. The term property had a wide connotation and included present and future property. Thus, if some notified party inherited or was gifted some property or earned some income subsequent to being notified, such property or income would stand attached and be available for distribution under the Act

Court's reasoning:
5. In our view, the terms of sub-section (3) of Section 3 are clear. By reason thereof, the property that belongs to a notified person stands attached simultaneously with the issue of the notification that makes him a notified party. The words "on and from the date of notification" indicate the point of time at which the attachment takes effect; this is reiterated by the words "shall stand attached simultaneously with the issue of the notification". This also indicates that no separate notification or order in regard to the attachment isIt seems to us that to give to Section 3(3) the wide meaning that has been ascribed to it in the judgment and order under appeal would render it perilously close to being held unconstitutional, for it would deprive the notified person, so long as he remained a notified person, from earning a livelihood. Even to say that such interpretation would reduce a notified person to beggary would not be accurate (sic in accurate) because the alms that he received, being his property, would standThe apprehension expressed by the Special Court does not appear to be well founded : if what a notified person obtains by way of purported income or gift or inheritance is really his own money, such money would, upon establishment of the fact, stand attached automatically under the provisions of Section 3(3). In any event, it is for Parliament to enact a law that meets all contingencies. The courts must interpret the law as it reads. While a purposive interpretation is permissible where two interpretations are possible, the purposive interpretation must be such as preserves the constitutionality of theIt is perhaps necessary to make clear that the income or usufruct of attached property is also attached property. Thus, if the property be shares, dividends and bonus and rights shares thereon would also be attached property. It is only income generated by a notified person by dint of his own labour which falls outside the net of Section 3(3). In respect of such income, the attachment under Section 3(3) does notFor the purposes of this appeal, we have found it unnecessary to entertain the argument