Bombay High Court
Ms Khedri Foundation Thr. Its Managing ... vs The State Of Maharashtra Thr. ... on 17 October, 2024
Author: Vinay Joshi
Bench: Vinay Joshi
2024:BHC-NAG:12022-DB
-- 1 -- Cr.WP No 692.2024 (J).odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
CRIMINAL WRIT PETITION NO. 692 OF 2024
M/s. Kedhari Foundation
A Partnership firm registered under
the provisions of the Indian
Partnership Act, 1932, through its
Managing Partner, K. Sri Harsha .. Petitioner
Shashank, having office at Plot
No.102, High Court Colony,
Vanasthalipuram
Hyderabad - 500 070
Versus
1) State of Maharashtra
Through Panchpaoli Police Station, .. Respondents
Panchpaoli, Nagpur
2) Axis Bank Limited
Ground Floor Kamla Towers,
Plot No.02, Kamptee Road,
Indora Square, Nagpur 440017
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Mr. A.A.Mankar, Advocate for Petitioner.
Mrs.Mayuri Deshmukh, AGP for respondent No.1.
Mr. Yusuf Mohd. Faizal, Advocate for complainant.
Mr. V.M.Gadkari, Advocate for respondent No.2.
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CORAM : VINAY JOSHI AND
ABHAY J. MANTRI, JJ.
DATED : OCTOBER 17, 2024
ORAL JUDGMENT (Per : Abhay J. Mantri, J.)
(1) Rule. Rule is made returnable forthwith. Heard finally, with
the consent of the learned counsel, appearing for the parties.
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(2) The challenge is raised to the requisition/notice dated
24/06/2024, whereby respondent No.1 has directed the Branch
Manager, Axis Bank, to (Debit) freeze the petitioner's bank account
No.918020043462494 and sought a direction against the respondent to
de-freeze the said bank account.
(3) Succinctly the facts are as under:-
The petitioner is a registered partnership firm managing an
Education Institution and retail business. One India Sugars and
Refineries Limited (ISRL) approached the petitioner and sought to
dismantle and remove the machinery and other activities. Accordingly,
on 15/09/2021, the petitioner entered into an agreement of sale to
purchase used machinery and equipment with ISRL. (hereinafter
referred to as the "Principal Agreement").
(4) Mr. Thilakanatha, proprietor of M/s. Medha Associates
(accused No.2) and Mr. J. Amanullah Khan, proprietor of M/s.
Amanullah Khan and Co. approached the petitioner, stating that they
have the necessary skills and expertise to perform the works effectively
as entailed in the Principal Agreement. The sale consideration was
Rs.22,50,00,000/- (Rupees Twenty-Two Crores Fifty Lakhs).
(5) Pursuant to the Sub-contract Agreement, Mr. Thilakanatha
and Mr. J. Amanullah Khan had made part payment in intervals from
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-- 3 -- Cr.WP No 692.2024 (J).odt
time to time, a total amounting to Rs.17,44,48,489/- (Rupees
Seventeen Crores Forty-Four Lakhs Forty-Eight Thousand Four Hundred
and Eighty-Nine) to the petitioner and an amount of Rs.5,05,51,511/-
(Rupees Five Crores Five Lakhs Fifty-One Lakhs Five Hundred and
Eleven) plus GST of 18% has remained to be paid. The petitioner has
produced a copy of ledger statements along with the petition.
(6) Mr. Thilakanatha and Mr. Khan had abandoned the work
without informing the petitioner and failed to fulfill the remaining
obligations under the sub-contract agreement. Therefore, it issued a
notice dated 26/08/2023 to them, calling upon why the clause of
Mediation under the sub-contract agreement should not be invoked.
Accordingly, on 12/12/2023, an arbitration notice was issued to them.
(7) On 24/06/2024, the petitioner received notice from the Axis
Bank, Indora Square Branch, Nagpur, whereby it is informed that the
Investigating Officer of the Panchpaoli Police Station freezes the
petitioner's bank account No.918020043462494. Since the
complainant, Mohd. Asif Mohd. Anis lodged a complaint alleging that
the accused person had done some suspicious transactions on the
petitioner's account. The petitioner, vide letter dated 03/07/2024,
informed the Investigating Officer about the agreement between it and
accused No.2 and requested him to de-freeze his bank account. He has
also addressed a copy of the said letter to the Deputy Police
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-- 4 -- Cr.WP No 692.2024 (J).odt
Commissioner. Despite his request, no action was taken by the
Investigating Officer; therefore, on 07/08/2024, the petitioner sent a
letter to the Commissioner of Police, Nagpur, to appraise the
background of the matter and requested to de-freeze its bank account,
but in vain, hence, this petition.
(8) Respondent No.1 filed a reply and resisted the claim of the
petitioner, contending that on 16/11/2022, accused No.2 transferred an
amount of Rs.11,10,179/- (Rupees Eleven Lakhs Ten Thousand One
Hundred and Seventy-Nine) in the bank account of the petitioner.
Therefore, the Investigating Officer has frozen the said bank account.
It is further contended that the investigation is ongoing, so it would not
be proper to de-freeze the said bank account; hence, he urged for
dismissal of the petition.
(9) It further seems that during the pendency of the petition,
"Axis Bank Limited" was added as respondent No.2. Also, the original
complainant/intervenor has filed the written objection resisting the
claim of the petitioner for de-freezing the said bank account and urged
for dismissal of the petition.
(10) Learned Counsel for the petitioner vehemently contended
that the petitioner has no concern with the alleged crime, but based on
the sub-contract agreement, the accused No.2 transferred an amount
of Rs.17,44,48,489/- (Rupees Seventeen Crores Forty-Four Lakhs
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Forty-Eight Thousand Four Hundred and Eighty-Nine) in the bank
account of the petitioner out of consideration of Rs.22,50,00,000/-
(Rupees Twenty-Two Crores Fifty Lakhs). Therefore, it cannot be said
that the said amount relates to the commission of crime. During the
argument, he took us through principal agreement/sub-contract
agreement/ledger statements and legal notices issued by the petitioner
to the accused No.1. Therefore, he submitted that the action on the
part of the Investigating Officer for freezing the bank account of the
petitioner is arbitrary, illegal, malafide and against the provisions of
law. Hence, he urged the bank account to be de-freezed.
(11) Per contra, Mrs. Mayuri Deshmukh, the learned Assistant
Government Pleader for respondent No.1 and learned Counsel for the
complainant, have strenuously argued that during the investigation, the
Investigating Officer noticed that accused No.2 transferred an amount
of Rs.11,10,179/- (Rupees Eleven Lakhs Ten Thousand One Hundred
and Seventy-Nine) in the bank account of the petitioner and therefore,
the action taken by the Investigating Officer to freeze the said bank
account is just and proper. Thus, they urged the dismissal of the
petition.
(12) Having heard the rival contentions of learned Counsel for
the parties and gone through the record, the short question that arises
before us is whether the notice dated 24/06/2024 issued by the
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-- 6 -- Cr.WP No 692.2024 (J).odt
Investigating Officer for freezing the petitioner's bank account is just
and proper.
(13) On perusal of the notice, it seems that the Investigating
Officer issued the requisition titled as "summons under Section 91, 160
of the Code of Criminal Procedure, 1973 (Cr. P. C.) and Section 4 of the
Bankers Books Evidence Act, 1891", to the Branch Manager, Axis Bank
requesting him for freezing the petitioner's bank account, in fact, under
these sections the Investigation officer was not empowered to freeze
the bank account. The said facts show that notice was not issued under
Section 102 of the Cr.P.C., under which the investigation officer was
empowered to freeze the account. It is pertinent to note that as per
Section 91 of the Cr.P.C., the Investigating Officer may issue
a summons to produce the document or other things. As per Section
160 of the Cr.P.C., the Investigating Officer may seize any property in
relation to the commission of the offence.
In the wake of the above, we would like to reproduce
Section 102 of the Cr. P. C., which reads as under :-
"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.
(2) Such police officer, ...........
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(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, 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."
(14) A plain reading of Sub-Section (1) of Section 102 indicates
that the Police Officer has the power to seize any property that may be
found under circumstances that create suspicion of the Commission of
any offence. Having used the expression of "any property" as an
offence, the legislature has made the applicability of the provisions
wide enough to cover offences created under any Act. It further reveals
that for the applicability of Section 102(1) of Cr.P.C., two preconditions
must be fulfilled, i.e. (1) "property" and (2) the said property must
have been suspected of commission of any offence. In this view of the
matter, two further questions that arise for consideration are :-
(1) Whether the bank account of the accused or any
person in his relation can be said to be a 'property' within
the meaning of Section 102(1) of Cr.P.C.?
and
(2) Whether circumstances exist, creating suspicion of
the commission of any offence in relation to the same ?
In the light of the above, we have to ascertain whether the
Investigating Officer's requisition/notice to freeze the petitioner's bank
account is just and proper.
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(15) On perusal of the record, it reveals that on 15/09/2021, the
Principal Agreement was executed between the petitioner and one
M/s.India Sugars and Refineries Limited. Based on the said agreement,
a Sub-Contract Agreement for sale and purchase was executed
between the petitioner and accused No.2 on 27/04/2022 for
consideration of the amount of Rs.22,50,00,000/- (Rupees Twenty-Two
Crores Fifty Lakhs), to be paid within five months. It is further evident
that pursuant to the said agreement till 16/11/2022, the accused No.2
transferred approximately Rs.17,44,48,489/- (Rupees Seventeen
Crores Forty-Four Lakhs Forty-Eight Thousand Four Hundred and
Eighty-Nine) in the bank account of the petitioner and Rs.5,05,51,511/-
(Rupees Five Crores Five Lakhs Fifty-One Lakhs Five Hundred and
Eleven) plus GST of 18% remains to be paid.
(16) It also emerges that on 11/10/2023, the original
complainant lodged a report against accused Nos.1 and 2 for the
commission of forgery to cheat him. However, it appears from the sub-
contract agreement and ledger statements that pursuant to the said
agreement, accused No.2, from the date of agreement till the payment
of Rs.11,10,179/- (Rupees Eleven Lakhs Ten Thousand One Hundred
and Seventy-Nine) had transferred an amount of Rs.17,44,48,489/-
(Rupees Seventeen Crores Forty-Four Lakhs Forty Eight Thousand Four
Hundred and Eighty Nine) in the bank account of the petitioner by the
series of transactions. Therefore, prima facia, it cannot be said that the
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amount deposited/transferred in the petitioner's bank account was
related to the commission of the crime. As against, it seems that
pursuant to the said agreement, accused No.2 has deposited the
amount in the petitioner's bank account. Moreover, respondent No.1
failed to show that the amount transferred by accused No.2 in the bank
account of the petitioner was in relation to the commission of
the offence as alleged when the petitioner is not aware of the
commission of the offence by the accused No.2. No justification was
given by the respondent No.1 to seizure of the operation of petitioner's
bank account. However, based on the suspicion, he has seized the
operation of the said bank account.
(17) In the light of the above discussion, the provisions of
Section 102 cannot be applied to the case in hand to seize the
operation of the petitioner's bank account. The petitioner has no
concern with the alleged crime, but based on the sub-contract
agreement, the said amount was transferred to its bank account.
Furthermore, the petitioner does not know from which source the
accused No.2 paid the amount to the petitioner.
(16) In the aforesaid background, in our view, the issuance of
the impugned requisition/notice dated 24/06/2024 to freeze the bank
account of the petitioner is unwarranted and against the intent of
the legislature as prescribed under Section 102 of the Cr.P.C.
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(17) Thus, we have no hesitation in concluding that the issuance
of the impugned requisition/notice dated 24/06/2024 issued by the
Investigating Officer to freeze the bank account of the petitioner is
illegal and contrary to the provisions of law and hence, the same is
liable to be set aside. As such, we deem it appropriate to allow the
petition in the following terms :-
ORDER
(a) The impugned requisition/notice dated
24/06/2024, issued by respondent No.1,
Investigating Officer, to freeze the bank account
No.918020043462494 of the petitioner, is hereby
quashed and set aside.
(b) The respondent Nos.1 and 2 are directed
to de-freeze the bank account of the petitioner
with immediate effect subject to tendering an
undertaking to deposit an amount of
Rs.20,00,000/- (Rupees Twenty Lakhs) in this
Court as and when required. The petitioner is
directed to give the undertaking on or before 31 st
October 2024.
(c) Rule is made absolute in the above
terms. No order as to costs.
[ ABHAY J. MANTRI, J. ] [ VINAY JOSHI, J. ]
KOLHE
Signed by: Mr. Ravikant Kolhe PAGE 10 OF 10
Designation: PA To Honourable Judge
Date: 24/10/2024 15:12:50
