The Patna High Court has set aside a 2016 order confiscating movable and immovable properties belonging to Lalita Devi and her late husband, observing that important sources of income, including agricultural and rental income, were not properly considered.
Justice Chandra Shekhar Jha delivered the judgment on August 29, 2026, in Criminal Appeal (SJ) No. 898 of 2016.
Background of the Case
The matter arose from Vigilance P.S. Case No. 12 of 1995 concerning allegations of disproportionate assets against Lalita Devi’s husband, Dwarika Nath Rai, who had served as a Superintending Engineer in the Public Health Engineering Department, Bihar.
The vigilance case related to a check period from February 1963 to May 1989. A charge-sheet was filed in 2004, while confiscation proceedings were subsequently initiated under the Bihar Special Courts Act, 2009.
The Special Court at Bhagalpur passed the confiscation order on September 30, 2016. By then, Dwarika Nath Rai had died on March 31, 2016. Lalita Devi had also obtained an earlier order from the High Court quashing proceedings against her.
Court’s Observation on Agricultural Income
The High Court found that the confiscation authority had failed to properly examine agricultural income claimed by Lalita Devi and her husband.
Records included a Circle Officer's report estimating agricultural income from the husband's inherited land at around Rs.70,000 per annum. Lalita Devi had also disclosed agricultural and rental income in her income-tax return. The Court noted that these materials were not adequately considered.
The Court observed:
“Thus, this Court is of the considered view that non-consideration of the agricultural income of the appellant is bad in the eyes of law in view of Nirankar Nath Pandey case (supra).”
The Court further noticed that an inventory prepared in 1995 was considered despite falling outside the relevant check period. It also found that construction of the second floor, completed after the check period, had not been properly dealt with.
Death of Public Servant and Earlier Discharge
The High Court also examined the effect of Dwarika Nath Rai’s death during the confiscation proceedings. It held that the proceedings were essentially an inquiry and could not simply continue on the basis of documents filed by a co-accused after the public servant had died.
The Court also relied upon the earlier order in Lalita Devi’s favour, observing that her discharge had attained the status of an acquittal for the purpose under consideration.
The Court held that proceeding against the deceased public servant without an opportunity for a fair inquiry also raised a violation of natural justice.
Decision
The High Court concluded that the confiscation order could not be sustained on both the merits of the property assessment and the subsequent death of the public servant, coupled with Lalita Devi’s earlier discharge.
“Thus, on both scores, this Court is convinced enough that the present impugned confiscation order is fit to be declared ‘annulled’/set-aside...”
Accordingly, the appeal was allowed and the September 30, 2016 confiscation order passed by the Special Court, Vigilance, Bhagalpur, was set aside/quashed.
Case Details:
Case Title: Smt. Lalita Devi v. The State of Bihar
Case Number: Criminal Appeal (SJ) No. 898 of 2016
Judge: Justice Chandra Shekhar Jha
Decision Date: 29 August 2026
