Clear scheme to misappropriate property & incur losses upon public exchequer: Apex Court asks Trial Court to expeditiously decide 19-yr-old case pertaining to frauds involving government lands
Justices Vikram Nath & Prashant Kumar Mishra [26-04-2024]

Read Order:THE STATE OF ODISHA v. NIRJHARINI PATNAIK @ MOHANTY & ANR [SC- CRIMINAL APPEAL NO. 2270 OF 2024]

Tulip Kanth

New Delhi, April 29, 2024: While observing that the intentional undervaluation of land and the strategic involvement of accused respondents in manipulation of the GPA highlighted a clear scheme to misappropriate government property, the Supreme Court has set aside the Orissa High Court’s judgment whereby the SDJM’s order for taking cognizance of offence against the respondents, was quashed.

The incident pertains to the year 2005, when an FIR was lodged by the then Special Secretary to the Government in the General Administration (G.A.) Department, alleging a widespread conspiracy involving the forgery of documents to facilitate the illegal transfer of valuable government land to private entities. Following the FIR, the Police initiated investigations that culminated in a chargesheet filed against ten individuals, including the present respondents, accusing them of engaging in a criminal conspiracy under sections 420, 467, 468, 471, 477A, 120B and 34 IPC.

The chargesheet detailed that the respondents, along with other co-conspirators, allegedly utilized forged documents such as Hata Patas, Ekpadia, and rent receipts to manipulate judicial processes and revenue records to illegally acquire government lands. These documents were purportedly produced in various revenue and civil courts to secure favorable orders, which were then used to substantiate false claims of ownership over the disputed properties.

Central to the allegations was a transaction involving the sale of land situated in the heart of Bhubaneshwar, initially leased to one Kamala Devi under dubious circumstances before the independence of India. After her demise, her legal heir, Kishore Chandra Patnaik, continued to assert rights over the property based on this lease, which had been previously declared non-genuine by the competent authorities.

In the year 2000, Kishore Chandra Patnaik, through a General Power of Attorney granted Anup Kumar Dhirsamant (accused no. 5), a real estate developer, the authority to manage and dispose of the property. It was alleged that this GPA was later found to be interpolated towards transactions favourable to the Respondents and the other accused persons. Following the interpolation, Dhirsamant executed sales of substantial portions of the land to the respondents at rates grossly undervalued, as per the market rates at the time and transactions that were finalized without proper scrutiny of the title's legitimacy or the GPA's authenticity.

In 2015, the SDJM, Bhubaneshwar passed an order of cognizance for offence u/s 420, 467, 468, 471, 477(A), 120(B) and 34 IPC and issue of process against the Respondents and the other accused persons which was challenged by the Respondents before the Orissa High Court. This appeal,by the State of Orissa, arose out of the judgment of the High Court quashing the order passed by the SDJM, Cuttack for taking cognizance of offences.

The Division Bench of Justice Vikram Nath & Justice Prashant Kumar Mishra opined that the impugned order of the High Court merited reconsideration. The investigation into Respondent No. 1 (accused no. 7) and Respondent No. 2 (accused no. 10) revealed their critical roles in the misuse of GPA and subsequent property transactions, presenting a strong prima facie case for further examination. 

Initially, Kishore Chandra Patnaik granted a GPA to M/s Millan Developer and Builders Pvt. Ltd., represented by Anup Kumar Dhirsamanta. This GPA was registered outside the proper jurisdiction by including a small, unrelated parcel of land to falsely extend the Sub-Registrar of Khandagiri's authority. This setup was key to the subsequent illegal activities.

The manipulation of the GPA where specific terms were altered to misrepresent the authority granted, was carried out with the help of a junior clerk (accused no.3). This act of forgery was a deliberate attempt to circumvent the legal procedure for transferring property. 

It was noted that following this forgery, extensive lands were sold at significantly lowered values. Specifically, lands in the heart of Bhubaneswar city were acquired for as little as Rs 9,000 per acre, whereas the prevailing market rates exceeded Rs. 50 lakhs per acre. 

“Such drastic undervaluation raises substantial questions regarding the intent behind these transactions, indicative of a deliberate scheme to evade appropriate stamp duties and registration fees, causing considerable loss to the state”, it said while also adding that part of this land was bought under suspicious conditions by Respondent No. 1 and accused no.8 in transactions managed by accused no. 2, who was temporarily in charge of the Sub-Registrar's office. 

“The intentional undervaluation of this land and the strategic involvement of Respondent No. 1, in conjunction with the revocation of the GPA due to its fraudulent tampering, highlight a clear scheme to misappropriate government property and incur losses upon the public exchequer”, the Bench held.

The Top Court stated that Respondent No. 1, who is the wife of Respondent No. 2, the Managing Director of M/s Z Engineer Construction Pvt. Ltd., was central to the planning and execution of these transactions. Both respondents, along with their connections in the Real Estates Developers Association and their familiarity with key figures in the real estate sector, played pivotal roles in this conspiracy. Their professional positions and industry influence were misused to facilitate and conceal these transactions.

“This Court believes that dismissing the case at the preliminary stage, especially when linked to a broader pattern of similar frauds involving government lands as part of a larger conspiracy, risks undermining the integrity of multiple ongoing investigations and judicial processes. Such a decision would be detrimental to the investigation of similar fraudulent schemes against public assets”, the Bench asserted.

Thus, allowing the appeal, the Bench ordered, “As the FIR is of the year 2005, the Trial Court is directed to decide the trial expeditiously.”