1 Cri-Appln-4376-with-Cri-WP-1520
PGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
Criminal Application No.4376 of 2009
Mr.Vinoskumar Ramachandran Valluvar .. .. Applicant
V/s.
The State of Maharashtra
(Through Sr.P.I. Tardeo Police Station,
Mumbai vide C.R. No.7/08) .. .. Respondent
ig WITH
Criminal Writ Petition No.1520 of 2009
Essar Logistics Ltd. .. .. .. Petitioner
v/s.
1.Vinoshkumar Ramchandran Valluvar
2.State of Maharashtra .. .. Respondents
Mr.Pavan S. Patil with Mr.Vishwajeet Mohite and Mr.Sandip
Babar i/by Mr.Abhay Ostwal for Applicant in Criminal
Application No.4376/2009 and for Respondent No.2 in Writ
Petition No.1520/2009.
Mr.P.A. Pol, Government Pleader for Respondent No.1.
Mr.Mahesh Jethmalani with Mr.Pranav Badheka and Mr.Prashant
Pawar i/by Mr.Rishi Bhuta and Mr.Manoj Khatri for
Petitioner in Writ Petition No.1520/2009 and Respondent No.
2 in Criminal Application No.4376/2009.
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CORAM : B.H. MARLAPALLE,
R.C. CHAVAN &
SMT.ROSHAN DALVI, JJ.
Date of reserving the judgment : 18th February 2011
Date of pronouncing the judgment : 18th March 2011
JUDGMENT : (SMT.ROSHAN DALVI,J.)
1.A short point of law under Section 102 of the Criminal
Procedure Code (Cr.P.C.) is a part of this reference.
The
Police
movable
Officer
property
is
being a
entitled
bank
to
account
seize
which
during
a
investigation is the subject-matter of the reference.
The learned Single Judge (Bobde, J.) has formulated the
question for reference thus:
Whether section 102 of the Code of Criminal
Procedure requires the issuance of a notice to a
person before or simultaneously with the action
of attaching the Bank account?
2.The case of State of Maharashtra vs. Tapas D. Neogy,
(1999)7 SCC 685 has settled the law relating to seizure
of bank accounts. The bank accounts are held to be
property capable of seizure. We are called upon to
answer the question under reference as to when the bank
account is seized or sought to be seized, whether a
notice to the person who is the account-holder, is
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required to be given before or at the time of such
action of seizure.
3.The main contention on behalf of the person, whose bank
account is seized, is the right of natural justice
the right of being heard and being informed of such an
action as an aspect of audi alteram partem doctrine. It
is contended that his right of natural justice would be
impinged, hampered, restricted and even denied if prior
to or at the time of the seizure of the bank account he
is not given notice of the action. The main contention
on the part of the opponent is that the doctrine of
audi alteram partem cannot be extended to a notice at
or before seizing of a bank account by a Police Officer
as it is a part of an act of an officer during
investigation which excludes the procedural requirement
of the principle of giving notice as an incident of the
right of natural justice of a person. It is contended
that it would be counter-productive and self-
destructive if an Investigating Officer, upon being
convinced of such an action to be taken during
investigation under Section 102 of the Cr.P.C., would
be enjoined to inform the party whose account is sought
to be frozen, of such an act. It is argued that by its
very nature and more specially in the current
technological set up of banking and financial
transactions any person even remotely can operate his
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account such as to withdraw or transfer its contents
completely to thwart the Police action. Hence it is
contended that the notice at the time of freezing of
the bank account or immediately prior thereto is not
required to be given.
4.The action of seizing a movable property, which
includes freezing of the bank account, is taken under
Section 102 of the Cr.P.C. which runs thus:
102. Power of police officer to seize certain
property.- (1) Any police officer may seize any
property which may be alleged or suspected to
have been stolen, or which may be found undercircumstances which create suspicion of the
commission of any offence.
(2) Such police officer, if subordinate to the
officer in charge of a police station, shall
forthwith report the seizure to that officer.
(3) Every police officer acting under sub-
section (1) shall forthwith report the seizure
to the Magistrate having jurisdiction and wherethe property seized is such that it cannot be
conveniently transported to the Court or where
there is difficulty in securing proper
accommodation for the custody of such property,
or where the continued retention of the propertyin police custody may not be considered
necessary for the purpose of investigation, he
may give custody thereof to any person on his
executing a bond undertaking to produce the
property before the Court as and when required
and to give effect to the further orders of the
Court as to the disposal of the same:
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Provided that where the property seized under
sub-section (1) is subject to speedy and naturaldecay and if the person entitled to the
possession of such property is unknown or absentand the value of such property is less than five
hundred rupees, it may forthwith be sold by
auction under the orders of the Superintendent
of Police and the provisions of sections 457 and458 shall, as nearly as may be practicable,
apply to the net proceeds of such sale.
(Emphasis supplied)
This is the stage of investigation. Just as much as the
Investigating
Officer is vested with the powers of
seizing a movable property such as, for example, a
knife used during the commission of a particular
offence, he is invested with the like powers to seize
the bank accounts. It need hardly be stated that for
each seizure of movable property, such as a knife, the
Investigating Officer is not required to inform any
accused whose knife it would be, to inform him of his
action either before or at the time of such seizure.
The argument relating to the notice is made typical for
a bank account which has been held to be capable of
seizure by freezing in the case of Tapas D. Neogy
(supra).
5.On behalf of Respondent No.1 in the above Petition,
whose bank account has been seized, a number of
judgments, not directly on this point, have been shown
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to us.
6.In the case of Dr.Shashikant D. Karnik vs. State of
Maharashtra, 2008 Criminal Law Journal 148, it has been
held that the provisions of Section 102 are to be
complied before an order of seizure is passed.
Consequently, the fact of seizure is required to be
communicated or reported to the relevant Magistrate. In
that case, it was argued that the notice was required
to be given to the Petitioner whose account was sought
to be seized because it would affect him adversely. It
was argued that in such a case the Petitioner would
withdraw all the amounts and hence it was further
argued that the notice could have been given to him and
attachment of the account could have been made
simultaneously. In that case, the Division Bench
allowed the Petition upon noticing four essential
requirements of Section 102 breached by the
Investigating Officer.
7.In the case of R. Chandrasekar vs. Inspector of Police,
Salem, 2003 Criminal Law Journal 294, the Petitioner
challenged the order of freezing his bank account as he
was not served any prohibitory order but was only
intimated by his bankers about the action. The accounts
came to be frozen upon a confessional statement made by
the accused relating to a transaction the accused had
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with the Petitioner. The Petitioner was not at all
involved in the case nor had anything to do with the
business of the accused. The accused had collected
deposits from various persons and had failed to repay.
He was charged with offences under Sections 465, 468,
471, 420 and 120 of the Indian Penal Code. His
confessional statement showed that the Petitioner s
father had received Rs.5 Lakhs and certain other
amounts from him. It was observed that that was not a
case of discovery of property. That had created
suspicion that an offence was committed. There were no
circumstances attendant upon the bank account or its
operation that have led the Police to suspect that some
offence had been committed. The bank account was a
sequel to the discovery of the commission of the
offence. Hence it was held in paragraph 9 of the
judgment that that was not sufficient to attract
Section 102 of the Cr.P.C., though it was sought to be
shown by the Investigating Officer that some funds were
suspected to be transferred by the Petitioner s father
to the Petitioner s bank account. It was held that such
a suspicion could have been verified by comparison of
the entries in the two accounts and that did not
justify freezing of the account of the Petitioner at
all. It was held in paragraph 11 of the judgment that
mandatory requirement of Section 102 of Cr.P.C.
enjoining the Police Officer to report the seizure to
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the Magistrate and to give notice to the Petitioner and
to allow him to operate the bank account subject to
executing a bond undertaking to produce the amount in
Court when required not having been given and the
prohibitory order not served upon the Petitioner, the
action under Section 102 was illegal.
8.In the case of Rajamani vs. Inspector of Police, Salem,
2003 Criminal Law Journal 2902, the bank account of a
third party was sought to be frozen. The nexus between
the account of the third party and the alleged offence
was not established. The seizure was held to be
illegal.
9.In the case of Padmini vs. Inspector of Police,
Tirunelveli, 2008(3) Crimes 716 (Mad.) following the
case of R. Chandrasekar (supra), it was held that when
no report was made to the Magistrate of the seizure and
when at that time no notice was issued to the
Petitioner, the seizure could not be justified.
10.In the case of B. Ranganathan vs. State, 2003 Criminal
Law Journal 2779 when the bank account not only of the
accused but other members of his family was seized
without following the procedure under Section 102 of
Cr.P.C. requiring information to be given to the
concerned Magistrate with notice of seizure to the
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accused, the seizure itself was held to be bad. In this
case, there was no authority granted to freeze the bank
account by the Superintendent of Police.
11.A reading of the aforesaid judgments shows that when
the seizure is challenged it may be held to be invalid
if the requirements of Section 102 of the Cr.P.C. are
not followed by the Investigating Officer or if, based
upon the facts of the case, the account of the account
holder may be held not prone to seizure. The
consideration of issuing the notice, if any, was at the
time the seizure was to be reported to the Magistrate
and not before or at the time of seizure itself.
12.It may be mentioned that Section 102 requires the
Police Officer to report the seizure to the Magistrate
having jurisdiction or to his immediate superior. It
may also be mentioned that Section 102 mandated the
execution of the bond undertaking in case of a seized
property which cannot be conveniently transported to
the Court so that custody of it could be given to the
person from whom it is seized upon the execution of the
bond to produce the property when required before the
Court. In a case where the discovery of the account did
not create suspicion of the commission of the offence
the seizure itself was held unjustified.
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13.In the case of Swaran Sabharwal vs. Commissioner of
Police, 1988 Criminal Law Journal 241, which preceded
the the case of Tapas D. Neogy (supra), the question
relating to whether the bank account was property was
inter alia considered which has later been settled in
the case of Tapas D. Neogy (supra).
14.The relevant words in Section 102(2)(3) report the
seizure specifically show that the seizure duly
effected has to be reported thereafter (1) to the
officer and (2) to
ig the Magistrate. The conjunction
and in Section 102(3) shows the two-fold action
required of the Investigating Officer (1) to report the
seizure to the Magistrate having jurisdiction and (2)
when the property is seized is not transportable to
give custody to any person upon executing a bond. Sub-
section (3) though requires the Investigating Officer
to report the seizure to the Magistrate does not enjoin
him to inform, intimate or report the fact to any
accused or any other person whose bank account is
frozen or whose property is seized.
15.Our attention has been rightly drawn by the Ld.
Counsel on behalf of Respondent No.1 in the above
Petition to the case of Gurudevdatta Vksss Maryadit vs.
State of Maharashtra, (2001) 4 SCC 534, which lays down
the elementary rule of literal interpretation of the
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plain meaning of a Statute which is clear and
unambiguous such a provision has to be given its
plain meaning. No further words are required to be
imported therein. Each word is required to be given
effect to. Consequently, in Section 102(2)(3) the word
report must relate only to the two authorities
mentioned in the aforesaid two sub-sections and none
else.
16.The Learned Senior Counsel on behalf of the Petitioner
drew our attention ig to the judgment in the case of
Unique Butyle Tube Industries (P) Ltd. vs. U.P.
Financial Corporation, (2003) 2 SCC 455, which mandates
a Court not to read anything into a statutory provision
which is plain and unambiguous. It observes thus:
A statute is an edict of the legislature. The
language employed in a statute is the
determinative factor of legislative intent.
The first and primary rule of construction is
that the intention of the legislation must befound in the words used by the legislature
itself. The question is not what may be
supposed and has been intended but what has
been said, Statutes should be construed, not
as theorems of Euclid , Judge Learned Handsaid, but words must be construed with some
imagination of the purposes which lie behind
them . (See Lenigh Valley Coal Co. v.
Yensavage.) This view was reiterated in Union
of India v. Filip Tiago De Gama of Vedem Vasco
De Gama (SCC p.284, para 16).
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The legislative casus omissus cannot be
supplied by judicial interpretative process.
17.The judgment, upon which the point of reference can
be fully answered relied upon by the learned Senior
Counsel on behalf of the Petitioner, is the case of
Union of India vs. W.N. Chadha, AIR 1993 SC 1082. The
case related to freezing of account in Swiss Bank under
a Letter Rogatory. In that case, the Letters Rogatory
were sought to be issued upon a Swiss Bank to freeze a
particular account by the Special Judge, CBI. This was
without notice
to the account-holder.
principle of audi alteram partem and upon the premise
Upon the
that no one was to be condemned unheard under the
humanising principle of law and fairness to secure
justice, the High Court sought to set aside the Letters
Rogatory. That was the investigating stage of
collecting evidence. It was contended that the accused
had no right to control or interfere in any manner with
the evidence which was to be collected and, therefore,
that, by its very nature, could not affect any right of
an accused giving the accused the extension of the rule
of audi alteram partem at that stage. In paragraphs 77,
78, 79, 80 and 81 of the judgment, it has been observed
thus:
77. The rule of audi alteram partem is not
attracted unless the impugned order is shown
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13 Cri-Appln-4376-with-Cri-WP-1520his property. In the present case, no such
consequences have arisen from the letter
rogatory. If the letter rogatory is acceptedby the foreign Court and acted upon it will
then disclose only the relevant facts aboutthe identity of the account holders, quantum
of the amounts standing in the names of the
individual account holders representing the
credit of Bofors money and the nature of suchaccounts. The follow up consequences would be
that the corpus of the offence would be
preserved intact from preventing the
withdrawal of the money from those accounts or
closure of the accounts by the account holderstill the merit of the case is decided.
78. In fact the Special Judge in Delhi is not
possessed with any power or authority to
deprive the liberty of the respondent residing
out of the jurisdiction of Indian Courts and
having his property in question in a foreign
country. Only in case where a public officer
has got such a power, the question of fair
play in action will be attracted. This rule
was explained by Lord Denning M.R. in Schmidt
v. Secretary of State of Home Affairs (1969) 2
Chancery Division 149 stating that where a
public officer has power to deprive a person
of his liberty or his property, the general
principle is that it has not to be done
without his being given an opportunity of
being heard and of making representations on
his own behalf.
79. The above explanation is quoted in Maneka
Gandhi (AIR 1978 SC 597).
80. The rule of audi alteram partem is a rule
of justice and its application is excluded
where the rule will itself lead to injustice.
In A.S. de Smith s Judicial Review of
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Administrative Action, 4th Ed. at page 184, it
is stated that in administrative law, a prima
facie right to prior notice and opportunity to
be heard may be held to be excluded by
implication in the presence of some factors,
singly or in combination with another. Those
special factors are mentioned under items (1)
to (10) under the heading Exclusion of the
audi alteram partem rule .
81. Thus, there is exclusion of the
application of audi alteram partem rule to
cases where nothing unfair can be inferred by
not affording an opportunity to present and
meet a case. This rule cannot be applied to
defeat the ends of justice or to make the law
lifeless, absurd, stultifying and self-
defeating or plainly contrary to the common
sense of the situation and this rule may be
jettisoned in very exceptional circumstances
where compulsive necessity so demands.
Hence it was observed that:
89. …… when the investigating officer is
not deciding any matter except collecting the
materials for ascertaining whether a primafacie case is made out or not and a full
enquiry in case of filing a report under S.
173(2) follows in a trial before the Court or
Tribunal pursuant to the filing of the report,
it cannot be said that at that stage rule ofaudi alteram partem superimposes an obligation
to issue a prior notice and hear the accused
which the statute does not expressly
recognise. The question is not whether audi
alteram partem is implicit, but where the
occasion for its attraction exists at all.
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90. Under the scheme of Chap.XII of the Code
of Criminal Procedure, there are various
provisions under which no prior notice oropportunity of being heard is conferred as a
matter of course to an accused person whilethe proceeding is in the stage of an
investigation by a police officer.
(Emphasis supplied)
Further upon considering the case of State of Haryana
v. Bhajan Lal, 1992 Supp(1) SCC 335 at 359 upon citing
the decision of the Privy Council in the case of
Emperor v. Khwaja Nazir Ahmad, AIR 1945 PC 18, the
Supreme Court while distinguishing the right of the
accused to hearing under specific Sections 227, 228,
239, 235 and 248 of the Cr.P.C. observed thus:
91. …… the field of investigation of any
cognizable offence is exclusively within thedomain of the investigating agencies over
which the Courts cannot have control and have
no power to stifle or impinge upon the
proceedings in the investigation so long asthe investigation proceeds in compliance with
the provisions relating to
investigation……
92. More so, the accused has no right to have
any say as regards the manner and method of
investigation. Save under certain exceptions
under the entire scheme of the Code, the
accused has no participation as a matter of
right during the course of the investigation
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16 Cri-Appln-4376-with-Cri-WP-1520final report under S.173(2) of the Code or in
a proceeding instituted otherwise than on a
police report till the process is issued underS.204 of the Code, as the case may be.
The Court observed that under Chapter XII, which
related to investigation, the accused had no right of
prior notice or hearing as that part of the Code was
silent in this respect . The Court further laid down
the object why it was so and that was to preserve
secrecy in the mode of investigation lest valuable
evidence would be lost. The Court further distinguished
the aspect of attachment of money of the accused and
freezing of the accounts during investigation.
Considering that opportunity of hearing to be given to
the accused before taking action would frustrate the
proceeding, obstruct the action, defeat the ends of
justice and make the provisions of law relating to
investigation lifeless, absurd and self-defeating, it
set out the total lack of statutory obligations in that
behalf.
18.It is, therefore, clear that like any other property
a bank account is freezable. Freezing the account is an
act in investigation. Like any other act, it commands
and behoves secrecy to preserve the evidence. It does
not deprive any person of his liberty or his property.
It is necessarily temporary i.e. till the merit of the
case is decided. It clothes the Investigating Officers
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with the power to preserve a property suspected to have
been used in the commission of the offence in any
manner. The property, therefore, requires to be
protected from dissemination, depletion or destruction
by any mode. Consequently, under the guise of being
given information about the said action, no accused,
not even a third party, can overreach the law under the
umbrella of a sublime provision meant to protect the
innocent and preserve his property. It would indeed be
absurd to suggest that a person must be told that his
bank account, which is suspected of having been used in
the commission of an offence by himself or even by
another, is being frozen to allow him to have it closed
or to have its proceeds withdrawn or transferred upon
such notice.
19.The question before us, therefore, is stark in its
framing. The word before or simultaneously in the
question specifically requires us to consider whether
before freezing the account or at the time of freezing
the account a notice has to be issued upon the
concerned person. Our answer can only be in the
negative. Section 102 of the Cr.P.C. does not require
issuance of notice to a person before or simultaneously
with the action of attaching (his) bank account. We
answer accordingly.
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20.The above Criminal Application and the Criminal Writ
Petition be sent to the concerned Court for disposal on
merits.
(B.H. MARLAPALLE,J.)
(R.C. CHAVAN, J.)
ig (SMT.ROSHAN DALVI, J.)
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