Bombay High Court
Sds Broking And Treading ... vs The State Of Maharashtra on 28 April, 2022
Bench: N. J. Jamadar
WP-4521-2021.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO. 4521 OF 2021
1. SDS Broking & Trading Auctioning Centre
Digitally
signed by OPC Pvt. Ltd.
SHRADDHA
SHRADDHA KAMLESH
KAMLESH TALEKAR
through its M.D. Sudhir Dhananjay Sarode
TALEKAR Date:
2022.04.28
& Anr. ...Petitioners
11:31:47
+0530 Vs.
1. The State of Maharashtra
through Sr.Police Inspector,
Crime Branch (Central Department) ... Respondent
****
Mr.Satish Borulkar a/w. Mr.Manoj Patil i/b Mr.Uday Bhanudas
Gavali for petitioners.
Ms.Anamika Malhotra, APP for respondent-State.
API Shashikant Pawar, Central Unit, Crime Branch, Navi Mumbai,
present.
CORAM : N. J. JAMADAR, J.
CLOSED FOR ORDER ON: 20th APRIL, 2022
PRONOUNCED ON : 28th APRIL, 2022
ORDER :
1. The challenge in this petition is to an order passed by
learned Judicial Magistrate, First Class, Vashi in Other Misc.
Application (Criminal) No.357 of 2021, whereby the prayer of the
petitioners to defreez the bank account Nos.(i) Saving A/c. No.
919010052600469 of Axis Bank Ltd., (ii) Saving A/c. No.
3913158677 of Kotak Mahindra Bank Ltd., (iii) Current A/c.No.
10190002381040 of Bandhan Bank, (iv) Saving A/c. No.
50200000504236 of Bandhan Bank, (v) Current A/c. No.
Shraddha Talekar, PS 1/8
WP-4521-2021.doc
3113972684 of Kotak Mahindra Bank Ltd., (vi) Saving A/c. No. :
3112255290 of Kotak Mahindra Bank Ltd., came to be rejected.
2. The petitioner No.1 is a company incorporated under the
Companies Act, 1956. The petitioner No.2 is the Director of
petitioner No.1. Crime was registered at C.R. No.02 of 2021 against
the petitioners for the offences punishable under sections 294(A)
and, 420 read with 34 of the Indian Penal Code, 1860 ('the Code'),
sections 7(3), 9(1) of Lotteries (Regulation) Act, 1998, sections 4(a)
and 5 of the Maharashtra Prevention of Gambling Act, 1887, and
section 66-D of the Information Technologies Act, 2000. The
petitioner No.2 came to be arrested. Property was seized from the
premises of the petitioners. Bank accounts of the petitioners were
ordered to be freezed.
3. The petitioners preferred an application for return of the
property and de-freezing of the bank accounts. The learned
Magistrate was persuaded to partly allow the application and
return part of the seized property. However, the prayer to de-freez
the accounts came to be rejected. Hence, the petitioners have
invoked the writ jurisdiction of this Court.
4. I have heard Mr.Satish Borulkar, the learned counsel for the
petitioners, and Ms.Malhotra, the learned APP for the State.
Shraddha Talekar, PS 2/8
WP-4521-2021.doc
5. Mr.Borulkar, the learned counsel for the petitioners
canvassed a two-pronged submission. First there was no
justification to order freezing of the accounts of the petitioner No.1
which is a corporate entity. Second, the action cannot be
sustained, as there is a fagrant violation of the mandate
contained in section 102 (3) of the Code of Criminal Procedure,
1973 ('the Code') to forthwith report the factum of seizure to the
jurisdictional magistrate.
6. Ms.Malhotra submitted that indeed there is omission on the
part of the investigating agency to immediately report the freezing
of the accounts to the jurisdictional magistrate. In the aforesaid
view of the matter, in the peculiar facts of the case, it may not be
necessary to delve deep into the aspect as to whether the freezing
of the account satisfies the requirement of sub-section (1) of
section 102 of the Code as the petition deserves to be allowed for
the non-compliance with the provisions contained in sub-section
(3) of section 102 of the Code.
7. Section 102 of the Code reads as under :
Section 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 under
circumstances which create suspicion of the
Commission of any offence.
Shraddha Talekar, PS 3/8
WP-4521-2021.doc
(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 where the
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 property in
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.
[Provided that where the property seized under
Sub-Section (1) is subject to speedy and natural
decay and if the person entitled to the possession
of such property is unknown or absent and 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 and 458 shall, as nearly
as may be practicable, apply to the net proceeds of
such sale.]
8. The requirement of sub-section (3) of section 102 to
forthwith report the seizure of property is couched in a
mandatory form. Under the Code, the Magistrate exercises
supervisory control over the investigating agency in certain areas.
Reporting of the seizure of the property to the jurisdictional
magistrate serves a definite purpose. The legislature, thus,
provided that such report of seizure be made forthwith. The non-
Shraddha Talekar, PS 4/8
WP-4521-2021.doc
compliance with the statutory requirement cannot be brushed
aside as a mere irregularity.
9. A useful reference in this context can be made to a Division
Bench Judgment of this Court in the case of Dr. Shashikant D.
Karnik vs The State Of Maharashtra 1, wherein the requirements
of section 102 were postulated as under :
17 Re-reading of Section 102 of the Cr.P.C. shows that
what is permitted to be done is the seizure of the property
by the Police Officer. Now, as per the view of the Supreme
Court, bank accounts can be seized under Section 102 of
the Cr.P.C. There is no doubt about that, and, since they
are bank accounts, the seizure means their attachment by
the police and the attachment order of the bank accounts
will have the effect of stopping the account holder from
operating those bank accounts. But in any case when the
powers are to be exercised by the police officer under
Section 102 of the Cr.P.C. and they are so exercised, there
is nothing like giving oral instructions of stopping the
operation of the account or written instructions not to allow
operations of the accounts. If such instructions are given
either oral or in writing then they are to be regarded as
attachment of the account. Therefore, what is stated in the
aforesaid affidavit of Mr. Pardeshi, as quoted above, is an
attempt to escape from the consequences of non
compliance to the Section 102 of Cr.P.C. No other provision
of the Cr.P.C. was shown to us by Mr. Mhaispurkar which
empowers the police officer, firstly, to issue orders oral or
written of stopping the operation of account before
attachment or seizure and then pass second order of
attachment of account. There is nothing like empowering
the police officers to issue ad interim or temporary order of
stopping the operation and then final order of attachment
of the account. If they issue any order of stopping operation
of the account, it has to be treated as action under Section
102 of the Cr.P.C. resulting in seizure i.e. attachment of the
account, and, if that is so the compliance to all the three
requirements, is a must.
18. So far as requirement under Section 102(1) is
concerned, it is obligatory upon the police to show that the
1 2008 Cri.LJ 148
Shraddha Talekar, PS 5/8
WP-4521-2021.doc
property which they want to attach or attaching is under
circumstances which create suspicion of the commission of
any offence. From paragraph 5 of the affidavit of Mr.
Pardeshi, ACP attached to ACB, quoted above, and from the
oral submissions made by Mr. Mhaispurkar, it is clear that
till this date the authority who attached the accounts of the
petitioner have not been able to come to any conclusion,
even primafacie case that the amount in the accounts has
any connection with the offence of disproportionate income
of the petitioner. In these circumstances, there is no option
but to hold that any action taken in giving oral instructions
of stopping the operation of the account or in issuing
written directions of stopping the operation of account, is
illegal perse. Section 102 of the Cr.P.C. does not permit any
police officer to seize the property, viz. to attach the
account in the first instance and then to decide whether
the property has any connection with the commission of
any offence. The attachment orders oral or written in this
case are issued in 2002, we are in 2007, but till this date
investigating agency has not been able to come to a
conclusion, as stated in paragraph 5 of the affidavit
reproduced above, that the amount lying in the bank
accounts, is out of the disproportionate income of the
petitioner. In these circumstances, the entire attachment
under oral or written directions has to be struck down as
has been illegal.
19. Second requirement of Section 102(2) of Cr.P.C. is that
the officer seizing the account or attaching the account
subordinate to the officer in charge of Page 0941 the police
station has to forthwith report the seizure or attachment to
his superior i.e. to the officer in charge of the police station.
Even though the State has filed two affidavits of Mr.
Pardeshi, ACP of Anti Corruption Bureau, not a word is
uttered about this requirement of Sub section (2) of Section
102 of Cr.P.C. that the officer ordering attachment of the
accounts oral or in writing whether was subordinate to the
officer in charge of the police station, meaning thereby
whether any superior officer was there in the Anti
Corruption Bureau above him and there was any report by
the said officer to his superior. What is stated in paragraph
6 of the first affidavit of Mr. Pardeshi is that "...on
completion of the open enquiry, the Enquiry Officer on
23.8.2005 submitted his final report". This is not the
compliance to Sub section (2) of Section 102 of Cr.P.C. If the
Officer giving instructions of stopping the operation of the
account of the petitioner to a superior, then it was
necessary for that officer to report this matter to his
superior as required by Sub section (2) of Section 102.
Shraddha Talekar, PS 6/8
WP-4521-2021.doc
20. Third requirement of Sub Section (3) of Section 102,
lays down a mandate that every police officer acting under
Sub-section (1) shall forthwith report the seizure or
attachment of accounts to the Magistrate having
jurisdiction. Admittedly, this is not done in the present
case. Paragraph 5 of the second affidavit of Mr. Pardeshi,
quoted above is very clear in this regard as well as the oral
submission of Mr. Mhaispurkar. It will be therefore clear
that there is absolutely no compliance to any of the
provisions of Sub sections (1), (2) and (3) of Section 102 of
Cr.P.C, in this matter. Consequently, the petition is required
to be allowed and the orders are required to be quashed as
prayed.
(emphasis supplied)
10. Following the aforesaid judgment, this Court in the cases of
Manish Khandelwal Vs. State of Maharashtra & Ors. 2 and Shri
Vilas s/o. Prabhakar Dange Vs. State of Maharashtra 3
has
quashed the actions of freezing of accounts under section 102 for
failure to report the seizure to the jurisdictional magistrate
forthwith.
11. For the foregoing reasons, the petition deserves to be
allowed.
12. Hence, the following order :
ORDER
(i) The petition stands allowed.
(ii) The impugned order, dated 30th July 2021 passed by
the learned 12th Judicial Magistrate, Vashi, Navi Mumbai in
2 Cri.Writ Petition No. 2434/2018 dt.30-07-2019
3 Cri. Writ Petition No.1033/2017 dt.7-12-2017 (Nagpur Bench)
Shraddha Talekar, PS 7/8
WP-4521-2021.doc
Other Misc. Application (Criminal) No.357 of 2021 stands
quashed and set aside.
(iii) The orders of freezing of the accounts of the petitioners
in connection with C.R. No.02 of 2021 stand quashed and
set aside.
(iv) The accounts of the petitioners, viz., (i) Saving A/c. No.
919010052600469 of Axis Bank Ltd., (ii) Saving A/c. No.
3913158677 of Kotak Mahindra Bank Ltd., (iii) Current
A/c.No. 10190002381040 of Bandhan Bank, (iv) Saving A/c.
No. 50200000504236 of Bandhan Bank, (v) Current A/c.
No. 3113972684 of Kotak Mahindra Bank Ltd., (vi) Saving
A/c. No. : 3112255290 of Kotak Mahindra Bank Ltd. stand
de-freezed.
13. All concerned to act on an authenticated copy of this order.
(N.J. Jamadar, J.)
Shraddha Talekar, PS 8/8
