Nagpur District Central ... vs State Of Maharashtra And Ors.
2003 Latest Caselaw 866 Bom

JUDGMENT

R.S. Mohite, J.

1. Heard Shri Dharmadhikari, Advocate for the applicant, Shri Gawai, Government Pleader for respondent Nos. 1 and 2, Shri Chaudhari, Advocate for respondent Nos. 3 and 4 and Shri Samarth, Advocate for respondent No. 5.

2. By this application, filed under Section 482 of Criminal Procedure Code, Nagpur District Central Co-operative Bank, which is a Co-operative Society registered under the provisions of Maharashtra Co-operative Societies Act, being the applicant before this Court seeks to quash and set aside an order dated 25-11-2002 issued by respondent No. 2 under Section 102 of the Criminal Procedure Code, seizing an amount of Rs. 25 crores which, according to the order, is an amount being the proceeds of the crime and which is due and payable to the Wardha District Central Co-operative Bank, who are joined as respondent No. 5 in this application.

3. The brief chronological facts of the case which gives rise to filing of this application are as under:

(a) A company by the name of Home Trade Limited, of which four persons by the name of Sanjay Agarwal, Ketan Seth, Subodh Bhandari and N. S. Trivedi, are Directors, hatched a scheme to cheat several Co-operative Banks in Maharashtra State of huge amounts running into several crores of rupees, allegedly in conspiracy with the local managements of such Co-operative Banks. The amounts were paid to M/s Home Trade Limited, on a promise by M/s Home Trade Limited to purchase Government securities. After receipt of such huge amounts of money from Co-operative Banks, M/s Home Trade Limited did not hand over the Government securities to the Co-operative Banks from whom they had obtained monies and misappropriated the amounts received by them from such banks. The erstwhile managements of both the present applicant as well as respondent No. 5 Bank, were also allegedly responsible for indulging in such transactions with M/s Home Trade Limited and as a consequence thereof, their banks lost huge amount of assets belonging to their genuine depositors and shareholders.

(b) On 15-3-2001, the Wardha District Central Co-operative Bank, respondent No. 5 herein entered into a contract with M/s Home Trade Limited for purchase of 10.47 percent Government of India 2015, being a security of the total face value of Rs. 25 crores vide contract note No. 6541 dated 15-3-2001.

(c) On 16-3-2001, in pursuance of the said contract, Wardha District Central Co-operative Bank transferred an amount of Rs. 25,24,72,083.33 to the account of M/s Home Trade Limited in their current account bearing Account No. 17031 in Maharashtra Co-operative Bank Limited, Fort, Mumbai. M/s Home Trade Limited never delivered the Government securities as they were required to do under the Contract Note No. 6541. It is the case of the prosecution that investigation has showed that they had never intended to give any such securities to Wardha District Central Co-operative Bank and after cheating the said bank, attempts were made through circuitous financial transactions to misappropriate the money belonging to the Wardha District Central Co-operative Bank.

(d) The money received by M/s Home Trade Limited from Wardha District Central Co-operative Bank was transferred on 16-3-2001 in its entirety to another account of M/s Home Trade Limited, bearing Account No. 2364 in Janata Sahakari Bank Limited, Pune. On the next bank working day i.e. on 19-3-2001, from this account, an amount of Rs. 10 crores was shifted into an account of "Hoogly Trading Investments", bearing Account No. 2468 also in the Janata Sahakari Bank Limited. On the same day, this amount of Rs. 10 crores was once again transferred into the account of another company by the name of "Maniram Consultants and Investments Private Limited", bearing Account No. 2566 in Janata Sahakari Bank Limited. On the same day, it was again shifted to a third account standing in the name of "Dalhousie Securities Private Limited" bearing Account No. 2515 in Janata Sahakari Bank Limited. Out of the balance amount remaining in the account of M/s Home Trade Limited, in Account No. 2364 of Janata Sahakari Bank Limited, an amount of Rs. 15 crores were transferred on 19-3-2001 to the Account of "Poddar Trading Company" bearing Account No. 2465 in Janata Sahakari Bank Limited. On the same day, out of this amount, an amount of Rs. 13.49 crores was transferred to an account of "Maniram Consultants and Investments Pvt. Limited" bearing Account No. 2566 in Janata Sahakari Bank Limited and the remaining part of Rs. 1.51 crores was shifted to the account of "Dalhousie Securities Private Limited" bearing Account No. 2515 with Janata Sahakari Bank Limited. On the same day, the amount of Rs. 13.49 crores lying in the account of "Maniram Consultants and Investments Private Limited" as aforesaid in Account No. 2566 was once again transferred to another account of "Dalhousie Securities Private Limited", being Account No. 2515 in Janata Sahakari Bank Limited."

(e) As a net result of these transactions, on 19-3-2001, an amount of Rs. 25 crores out of the monies taken by "M/s Home Trade Limited" from the Wardha District Central Cooperative Bank were regrouped in the account of "Dalhousie Securities Private Limited" bearing account No. 2515. From here, by a further transaction on the same day, i.e. on 19-3-2001, the entire amount of Rs. 25 crores was once again transferred to the account of "Euro Discover India Limited" bearing Account No. 2599 in Janata Sahakari Bank Limited and by a further transaction also dated 19-3-2001, this amount was transferred by Euro Discover India Limited into the account of Nagpur District Central Co-operative Bank i.e. the applicant before the Court, being a part component in a cheque of Rs. 40 crores which was transferred from the account of M/s Euro Discover India Limited to the applicant on that day.

(f) It is a specific case of the applicant that as far as they are concerned, they received this cheque of Rs. 40 crores from M/s Euro Discover India Limited by way of a repayment of an investment of Rs. 40 crores which the Bank had made with M/s Euro Discover India Limited at Mumbai at an interest rate of 20% per year, on 15-9-2000. It is their case that this amount of Rs. 40 crores had been invested by the applicant Bank with M/s Euro Discover India Limited through four cheques bearing Nos. 286253, 286282, 286281 and 286284, each of the value of Rs. 10 crores and debited in their account on 15-9-2000. The applicant bank relied upon several documents to show that they had infact invested an amount of Rs. 40 crores with M/s Euro Discover India Limited on 4-9-2000, the most relevant of which are as under:

(i) A xerox copy of a page from an account scroll which showed the debit of four cheques of Rs. 10 crores each as aforesaid.

(ii) A xerox copy of a Resolution dated 14-9-2000 of their Board of Directors, resolving to effect the deal of investing Rs. 40 crores with M/s Euro Discover India Limited.

(iii) A xerox copy of a written proposal dated 14-9-2000 for investment of Rs. 40 crores received from M/s Euro Discover India Limited.

(iv) A xerox copy of a letter dated 14-9-2000 from the applicant Bank to the Chief Accountant, Head Office Nagpur, recording that they were placing Rs. 40 crores as an investment with M/s Euro Discover India Limited.

(v) A xerox copy of their letter dated 14-9-2000 written to M/s Euro Discover India Limited, confirming that the applicant Bank was placing Rs. 40 crores as a investment against securities of Rs. Five lakhs equity shares of "M/s Home Trade Limited" having market value of Rs. 40 crores plus and also calling upon M/s Euro Discover India Limited to lodge Rs. 13,50,000/- equity shares of Ways India limited, having market value of Rs. 40 crores as collateral securities and for tendering the personal guarantee for Sanjay Agarwal, Ketan Seth, Subodh Bhandari and N. S. Trivedi each for Rs. 16 crores.

(vi) A xerox copy of letter of comfort/guarantee executed by Sanjay Agarwal before a Notary on 14-9-2000 undertaking to share 1/3 guarantee of buy back of shares in the event of default on the part of Euro Discover India Limited and further undertaking to guarantee the due payment on demand from the Borrower, either alone or jointly, with any other person or persons.

(vii) A xerox copy of similar letters of comfort/guarantee was given by Ketan Seth, Euro Discover India Limited and N. S. Trivedi.

(viii) A xerox copy of a letter dated 14-9-2000 issued by Euro Discover India Limited to the applicant Bank agreeing to furnish the required securities.

(ix) A xerox copy of a Promissory Note dated 15-9-2000 executed by Euro Discover India Limited, promising to pay a sum of Rs. 40 crores on 13-9-2001 against value received on 15-9-2000.

(x) A xerox copy of two Resolutions, one dated 28-8-2000 passed by the Shareholders of Euro Discover India Limited under Section 293(l)(d) generally authorizing the Board of Directors to borrow money and a second dated 13-9-2000 specifically relating to this transaction of Rs. 40 crores.

(xi) A xerox copy of three post dated cheques given by Euro Discover India Limited to the applicant Bank, the first being Cheque bearing No. 829435 dated 13-9-2001 drawn on Janata Sahakari Bank Limited, Pune, for an amount of Rs. 40 crores towards repayment of principal amount, the second being a cheque bearing No. 829434 dated 13-3-2001 drawn of Janata Sahakari Bank Limited, Pune, for an amount of Rs. 4 crores being the six monthly interest on the principal amount of Rs. 40 crores and thirdly being a cheque No. 829437 dated 13-9-2001 for an amount of Rs. 4 crores drawn on Janata Sahakari Bank Limited, Pune, being the second half yearly interest on principal amount of Rs. 40 crores.

(xii) A xerox copy of three cheques of the amount of Rs. 16 crores each executed by three guarantors i.e. Sanjay Agarwal, Ketan Seth and N. S. Trivedi each dated 13-9-2001 and for the total amount of Rs. 48 crores to cover the guaranteed amount of principal plus due interest.

These documents were annexed by the applicant - Bank to an affidavit dated 14-2-2003, in order to support their case that they had an investment transaction with M/s Euro Discover India Limited whereby they forwarded an amount of Rs, 40 crores by way of an investment on 15-9-2000.

(g) It was further the applicant's case that in pursuance of the aforesaid transactions, they received an amount of Rs. 4 crores by way of interest on 13-3-2001 from M/s Euro Discover India Limited, prematurely received back the principal amount of Rs. 40 crores on 19-3-2001 and received a further amount Rs. 10,95,890/- by way of further interest from 13-3-2001 to 20-3-2001. It was lastly their contention that on 20-3-2001, they entered into a fresh investment by forwarding an amount of Rs. 40,44,20,666.67 with M/s Home Trade Limited.

(h) On 24-6-2002, Wardha District Central Co-operative Bank having realised that they had been cheated of the amount of over Rs. 25 crores, lodged a criminal complaint with the local Crime Branch, Wardha. The complaint was registered by the police under Crime No. 124 of 2002 and investigation commenced. That till today 13 persons are shown as accused in this criminal investigation, who include Sanjay Agarwal, Ketan Seth, Subodh Bhandari and N. S. Trivedi, all Directors of M/s Home Trade Limited and the erstwhile Directors and Chairman of Wardha District Central Co-operative Bank.

(i) In the course of investigation, the police were required to piece together diverse financial and complicated transactions and therefore, they engaged the services of a firm of Chartered Accountant by the name of Y. C. Dalai and Associates, who investigated the financial transactions and ultimately by their covering letter dated 12-9-2002 indicated that the amount of Rs. 25 crores were transferred by M/s Home Trade Limited to the applicant - Bank through Bank transactions executed between 16-3-2001 to 19-3-2001. The manner in which these transactions were effected was further confirmed by the statement of Sanjay Agarwal dated 27-6-2002 and Subodh Bhandari dated 8-10-2002. It was also independently confirmed by a Bank certificate issued by Janata Sahakari Bank Limited, Pune on 30-8-2002. The flow fund chart indicating that money involved in the crime ultimately came to the account of the applicant is annexed to the written submissions made on behalf of respondents No. 3 and 4 dated 12-12-2000 and which is also a part and parcel of the charge sheet. The Bank Certificate dated 30-8-2002 issued by Janata Sahakari Bank Limited is also on record as Annexure B to the same written submissions and also is a part of the charge sheet.

(j) The investigation further revealed that the Directors of M/s Home Trade Limited i.e. Sanjay Agarwal, Ketan Seth, Subodh Bhandari and N. S. Trivedi were also the common directors in all the companies i.e. Hoogly Trading and Investment, Maniram Consultants and Investments Company Limited, Dalhousie Securities Private Limited, Poddar Trading Company and Euro Discover India Limited. These companies were therefore, merely front companies for the four accused i.e. Sanjay Agarwal, Ketan Seth, Subodh Bhandari and N. S. Trivedi.

(k) In this background, on 21-10-2002, the Investigating Officer issued a notice to the applicant Bank stating that investigation had revealed that an amount of Rs. 25 crores from the amount of Rs. 25,24,72,083.33 obtained by M/s Home Trade Limited from Wardha District Central Co-operative Bank had been deposited in the account of the applicant vide Cheque No. 829988 dated 19-3-2001. The notice stated that this amount of Rs. 25 crores was the subject matter of a crime and was payable to Wardha District Central Co-operative Bank. It called upon the applicant to furnish their reply within seven days as to why legal steps should not be taken to recover an amount of Rs. 25 crores from the applicant - Bank.

(l) By their letter dated 30-10-2002, the applicant - Bank replied to the Investigating Officer's notice stating that the amount received by them on 19-3-2001 was received by them by way of repayment of investment of Rs. 40 crores made by the company with Euro Discover India Limited and that thus amount of Rs. 40 crores received by them from Euro Discover India Limited had no connection or nexus with the money obtained by M/s Home Trade Limited from Wardha District Central Co-operative Bank.

(m) After consideration of the reply, the Investigation Officer found the same unsatisfactory and ultimately on 25-11-2002, the Investigation Officer issued the impugned order addressed to the Maharashtra State Co-operation Bank Limited stating that an amount of Rs. 25 crores due to the Wardha District Central Co-operative Bank and proved by documentary evidence to be the subject matter of a crime, was recoverable from the Nagpur District Central Cooperative Bank. The order further stated that therefore Bank Account No. 103/5751, (which according to the advocate for the applicant should have been Account No. 101/5751) with the Maharashtra State Co-operative Bank Limited was frozen to the extent of Rs. 25 crores and no transaction for this amount be allowed.

(n) By their letter dated 26-11-2002, the Maharashtra State Co-operative Bank informed the applicant Bank of the freezing of their Account No. 101/5751 and enclosed the impugned order.

(o) The present Criminal Application came to be filed on 28-11-2002.

4. The contentions made on behalf of the applicant can be summarized as under:

(a) That insofar the bank was concerned, the amount of Rs. 40 crores received from Euro Discover India Limited was by way of premature repayment of an earlier investment made with the said company on 15-9-2000. They were, therefore, a bona fide recipient of the money in a regular commercial transaction without notice that any part of the money was a subject matter of a crime.

(b) That in any case, even assuming that they had received money which was the subject matter of the crime, yet, after receipt of the said money, the Bank had already used the amount for its business. In this regard, reliance was placed upon an entry in the Account Scroll dated 20-3-2001 which indicated that an amount of Rs, 40,44,20,666.67 had been forwarded to M/s Home Trade Limited in the ordinary course of the business of the applicant - Bank. The contention was that by a subsequent bank transaction, the money which was a subject matter of the crime had left the bank and gone back to M/s Home Trade Limited and, therefore, this money could not be seized in a police investigation.

(c) That the amount of Rs. 25 crores seized by the impugned order could not be said to be "any property which was found under circumstances which creates suspicion of the commission of any offence" within the meaning of Section 102 of the Criminal Procedure Code, 1973 and in view of the judgment of the Apex Court in the case of State of Maharashtra v. Tapas D, Neogy, reported in 1999 Cri. L.J. 4305, under Section 192 of the Criminal Procedure Code only a bank account of "an accused or any of his relation" could be seized.

(d) That, on the date of the passing of the impugned order, the Bank account of the applicant- Bank bearing Account No. 101/5751 did not contain an amount of Rs. 25 crores and in fact contained a much lesser amount and therefore, the impugned order was bad in law.

5. On behalf of respondents No. 1, 2, 3 and 4, similar submissions were made by way of reply to the applicant's contentions, which can be summarized as follows :

(a) As regards the first contention of the applicant contained in para (4-a), it was contended that from the document produced on the record, it was doubtful and a matter of further investigation as to whether the amount of Rs. 40 crores received by the applicant - Bank on 19-3-2001 was in fact received by way of repayment of the investment said to have been made with M/s Euro Discover India Limited on 15-9-2000. In this connection, the learned Government Pleader, appearing on behalf of respondents No. 1 and 2 pointed out several features which according to him appeared suspicious. He pointed out that the amount of Rs. 40 crores were infact not due till 13-9-2001 as could be seen from the post dated cheque for the amount of Rs. 40 crores given at the time of making investment by M/s Euro Discover India Limited. He pointed out that in the Account Scroll produced by the bank along with their additional affidavit dated 28-2-2002, the cheque Nos. in respect of all other bank transactions were specifically shown but no cheque numbers were mentioned in respect of interest amount of Rs. 4 crores said to be received on 13-3-2001, principal amount of Rs. 40 crores received on 19-3-2001 and further interest of Rs. 10,95,890/- said to be received on 20-3-2001. Jt was contended that in these set of suspicious circumstances the applicant Bank was not certified by the Court to be a bona fide recipient of money and the matter would have to be investigated further in order to find out if the management of the applicant bank was not actively involved in the hiding of the money which was a subject matter of crime. However, the investigation already completed established that the amount of Rs. 40 crores from the money taken from Wardha District Central Co-operative Bank on 16-3-2001 was a part of the amount of Rs. 40 crores paid through the account of M/s Euro Discover India Limited into the account of applicant Bank. It was contended that the amount of Rs. 40 crores included an amount of Rs. 25 crores belonging to Wardha District Central Co-operative Bank and which was a property of the said bank, taken away through the offence of cheating and misappropriation which could be seized by an order under Section 102 of the Code of Criminal Procedure.

(b) As regards the contention of the applicant contained in para (4-b), by way of reply, it was contended that according to the applicants themselves, they had admitted the receipt of an amount of Rs. 40 crores from M/s Euro Discover India Limited. Investigation had revealed that this included the amount of Rs. 25 crores from the applicant bank by way of a premature repayment of an earlier investment made with M/s Euro Discover India Limited on 15-9-2000. If this be so, then according to the applicant's own showing the amount received back became a part of the assets of the applicant bank. Merely because of a subsequent business transaction of the applicant Bank, giving back an amount of Rs. 40,44,20,666.67 ps. to another company i.e. M/s Home Trade Limited, the applicant - Bank could not be heard to say that the amount of Rs. 25 crores could not be recovered from them.

(c) As regards the contention of the applicant in para (4-c), it was contended that having discovered that the amount of Rs. 25 crores which were a subject matter of cheating and misappropriation from the Wardha District Central Co-operative Bank had through circuitous financial transactions have ultimately been parked with the applicant - bank, supposedly in a repayment of earlier investment, it could not be said that there was no circumstance which created the suspicion of the commission of any offence within the meaning of Section 102 of Criminal Procedure Code. It was further contended that the term "any property" mentioned in Section 102 of Code of Criminal Procedure, 1973, was a term of wide import and has not been limited by the judgment of the Apex Court in the case of State of Maharashtra v. Tapas D. Neogy (supra).

(d) As regards the contention of the applicant raised in para (4-d) above, it was contended that once the applicant bank took the stand that the amount was received in repayment of an earlier investment then upon receipt of amount of Rs. 40 crores on 19-3-2001, the same became the part of the assets of the bank and could be seized under Section 102 of the Criminal Procedure Code notwithstanding the fact that any particular account of the bank did not have the full amount at a subsequent point of time and because of subsequent banking transaction carried on in the usual course of business and in any case if there was a lesser amount in any particular account, that by itself did not vitiate the impugned order against that bank account.

6. On behalf of the Wardha District Central Co-operative Bank -respondent No. 5, it was submitted that the amount of Rs. 25 crores should be returned back to them as they were the owners of the money, it was submitted that the impugned order was legal and the seizure should be permitted.

7. I have anxiously considered the submissions made by both sides and by observations and findings thereon are as under:

(a) As regards the contention of the applicant Bank outlined in para (4-a) on the material presently available on record, I am unable to give a positive finding on the question if the amount of Rs. 40 crores was received by the bank on 19-3-2001 in a bona fide commercial transaction, being a premature repayment of an earlier investment. On their own showing, the earlier management of the bank had been dealing with Mr. Sanjay Agarwal, Mr. Ketan Seth and Mr. N. S. Trivedi, who are accused in the crime and shown to be capable of engineering a financial labyrinth, since 2000. It must also be kept in mind that the erstwhile management of the applicant-Bank are also co-accused with Mr. Sanjay Agarwal and his associates in a separate crime and are alleged by the police to have been acting in tandem. In this background, if a closer look is taken at the documents produced in proof of the investment transaction dated 16-9-2000, it must be concluded that there does not exist any document which could not have been brought into existence by the erstwhile Directors of the applicant-Bank, acting in tandem with Mr. Sanjay Agarwal and his associates. The account sheet produced to show the investment transaction dated 16-9-2000 will have to be verified by cross checking with the entries in the incoming account and other ancillary bank documents. The originals will have to be seen by the investigating authority to determine the authenticity. The fate of shares said to have been given as security will have to be seen. However, in my view, even if this investment is found to be genuine, the amount of Rs. 40 crores by way of premature repayment of this investment, it would not help the applicant Bank to evade the seizure of any component thereon, which is the subject matter of an offence. This must be so as on repayment of the investment, Rs. 40 crores would become an asset of the applicant-Bank. If any part thereof is found to be the subject matter of a crime, it can be seized and ultimately returned to whosoever is found to be its real owner. The remedy of the applicant-Bank will only be to seek compensation against the persons who paid them such tainted money. To hold otherwise will provide a legal avenue to launder money which is the subject matter of crime through banks whose managements are willing and will render the real owners without legal means to recover their lost assets.

(b) As regards the contentions of the applicant Bank contained in para (4-b), in my view the subsequent transaction dated 20-3-2001, whereby an amount of Rs. 40,44,20,666.67 ps. is shown to have been forwarded to "Home Trade Limited" is an independent commercial transaction in the ordinary course of bank business. The commercial risks involved with this and any subsequent bank transactions rests solely with the applicant-Bank, just as they would be entitled to any benefits accruing therefrom. In my view, any such subsequent transactions cannot affect any rights vested in the police to seize property under Section 102 of the Code of Criminal Procedure, 1973. The fact that the amount of Rs. 40,44,20,666.67 ps. was given from the same account into which the money was received from "M/s Euro Discover India Limited", cannot make any difference to the legal position as for the purpose of determining the right to seizure, banks assets cannot be compartmentalised into individual accounts. If such compartmentalization were allowed, it would be the easiest thing to avoid seizure by transferring it to another account or investing it in different assets.

(c) Insofar as the contentions of the applicant bank contained in para (4-c) are concerned. The argument turns on the wording of Section 102 of Code of Criminal Procedure which requires that before making the seizure any property of which seizure is intended must be found under circumstances which creates suspicion of the commission of any offence. It was contended that in the present case, the finding of the money in the bank did not create suspicion of the commission of any offence but the situation is the other way around i.e. as a result of an investigation, into an alleged crime, subsequently the money is traced to the applicant Bank. The argument is not new. It was infact made and even accepted by a Division Bench of the Delhi High Court in the case of M/s Swaran Sabharwal v. Commissioner of Police, reported in 1988 Cri.LJ, 241. The relevant portion of the observations are reproduced as under :

"6. We are not able to accept this argument. In the first place we are not quite sure whether monies deposited in a bank account can be 'seized' by means of a prohibitory order as has done in the present case under the provisions of Section 102. But assuming that a bank account is 'property' within the meaning of the section, it should be property "found under circumstances which create the suspicion of the commission of an offence", to justify action under Section 102. In other words, it applies where a police officer comes across certain property in circumstances which create in his mind a suspicion that an offence has been committed. Thus in the cases cited by counsel action under Section 102 was upheld where a public servant was found in possession of moneys in his bank account far in excess of his known sources of income, when a person was found in possession of a large quantity of small coins for sale in contravention of Defence of India Rules, where a trader was found to have stored a large number of bags of rice in contravention of rules and orders and where a person was found standing on a public road with a bag containing several bundles of currency notes. The position here is different. Here, it is not the discovery of the property that has created the suspicion of an offence. There are no circumstances attendant upon the bank account or its operation that have led officer to suspect that some offence has been committed somewhere. The discovery of the bank account here is a sequel to the discovery of the commission of the offence. The police suspect that some of the proceeds realised by the sale of official secrets have been passed on to the petitioner by her husband. This, we think, is not sufficient to attract Section 102 as it cannot be since that the bank account has been traced or discovered in circumstances which have made the police aware of the commission of an offence. " (Emphasis provided)

However, this cannot be good law after the judgment of the Apex Court in the case of State of Maharashtra v. Tapas D. Neogy, reported in 7999 Cri.LJ. 4305, in which after noticing the aforesaid judgment of the Division Bench of the Delhi High Court, in para 6, Section 102 of the Code of Criminal Procedure was interpreted by the following observations :

"6. A plain reading of Sub-section (1) of Section 102 indicates that the Police Officer has the power to seize any property which may be found under circumstances creating suspicion of the commission of any offence. The legislature having used the expression "any property" and "any offence" have made the applicability of the provisions wide enough to cover offences created under any Act. But the two pre-conditions for applicability of Section 102(1) are that it must be 'property' and secondly, in respect of the said property there must have been suspicion of commission of any offence," (Emphasis provided)

To similar effect are further observations made in para 12 and the same are reproduced as under:

"We are, therefore, persuaded to take the view that the bank account of the accused or any of his relation is 'property' within the meaning of section 102 of the Criminal Procedure Code and a police officer in course of investigation can seize or prohibit the operation of the said account if such assets have direct links with the commission of the offence for which the police officer is investigating into. The contrary view expressed by Karnataka, Gauhati and Allahabad High Courts, does not represent the correct law." (Emphasis provided)

The second leg of the argument that in the aforesaid case, the Apex Court laid down the law that "only a bank account of an accused or any of his relations" can be seized under Section 102 of the Criminal Procedure Code must also be held to be an untenable argument. The relevant observations of the apex Court in para 12, upon which reliance was placed are already reproduced hereinabove. In my view, this is not the ratio of the aforesaid case in which the apex Court expressly observed that there was no justification for a narrow interpretation of section 102 of the Criminal Procedure Code. The case before the Supreme Court was one relating to a joint bank account held by the mother and brother and hence it was in this context that the observations of the apex Court were made and must be read. In my view, the word "any property" occurring in Section 102 of Criminal Procedure Code must be given the widest possible meaning and must include such property found or parked anywhere and in any form, whether tangible or intangible. Property transferred electronically would be one form of such intangible property. A clue can be had from Section 452(5) of the Criminal Procedure Code which deals with the Order for disposal of property at the conclusion of trial which reads as under :

"In this section, the term "property" includes, in the case of property regarding which an offence appears to have been committed, not only such property as has been originally in the possession or under the control of any party, but also any property into or for which the same may have been converted or exchanged, and anything acquired by such conversion or exchange, whether immediately or otherwise."

True, this definition of property is restricted to the Section but in the scheme of the Code, any property seized under Section 102 would ultimately be the property required to be disposed under Section 452 of the Criminal Procedure Code.

(d) This brings me to the last contention of the applicant as contained in para (4-d) i.e. that on the date of seizure, Bank Account No. 101/5751 did not have an amount of Rs. 25 crores. This argument is really a facet of an argument made earlier as the amount of Rs. 40 crores received on 19-3-2001 was reduced by subsequent banking transactions. I have already hold that such subsequent transactions have no bearing or effect on the right of the police to seize under Section 102 of the Criminal Procedure Code, 1973. Bank Account No. 101/5751 is a part of the assets of the Bank and cannot be treated in isolation. In any case, the amount lying in a bank account cannot be the criteria for deciding the legality of the impugned order.

8. The advocate for the applicant stated that if the amount was seized in execution of the impugned order, great hardship will be caused to the applicant Bank and the consequence to the Bank and others would be severe. This has been highlighted by averments made in Criminal Application No. 2137 of 2003 filed by the applicant-Bank for the purpose bringing such details on record. The emphasis is on the fact that the amount in the bank account seized does not necessarily belong to the applicant bank. Illustrations are given to show how flow of funds to MSEB, consumers of electricity, Urban Co-operative Banks, farmers, unemployed youths and others will be affected. The stage of seizure of property with the aid of Section 102 is not the stage of deciding conflicting claims of persons who claim to be entitled to the seized property. The seizing of the account by itself would only prevent the applicant Bank from making further investments out of the amount and to that extent secure the amount. Once the amount is secured, there exist provisions in the Code, both at the interim and final stage of the trial to seek the return of any amount genuinely due to any person. That claim is decided judicially and the order so passed can be subjected to further scrutiny by higher Courts.

9. In the result, Criminal Application must fail and rule must stand discharged. Accordingly, criminal application is dismissed and rule stands discharged.