Rajasthan High Court - Jodhpur
Smt. Kailash Kanwar Rathore vs State Of Rajasthan (2025:Rj-Jd:26095) on 27 May, 2025
Author: Manoj Kumar Garg
Bench: Manoj Kumar Garg
[2025:RJ-JD:26095]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 3311/2025
1. Smt. Kailash Kanwar Rathore W/o Hukam Singh,
Aged About 50 Years, R/o Farara, Ps Rajnagar, Dist.
Rajsamand, Raj.
2. Vikram Singh S/o Hukam Singh, Aged About 24
Years, R/o Farara, Ps Rajnagar, Dist. Rajsamand, Raj.
3. Narayan Singh S/o Hukam Singh, Aged About 29
Years, R/o Farara, Ps Rajnagar, Dist. Rajsamand, Raj.
----Petitioners
Versus
State Of Rajasthan, Through Pp
----Respondent
For Petitioner(s) : Mr. Divik Mathur
Mr. Pravin Kumar Choudhary
For Respondent(s) : Mr. Deepak Choudhary, AAG
Mr. Kuldeep Kumpawat, AAAG
Mr. Laxman Ram Bishnoi, SHO.
P.S. Kelwa, District Rajsamand
HON'BLE MR. JUSTICE MANOJ KUMAR GARG
Order
REPORTABLE
27/05/2025
The present misc. petition under Section 528
B.N.S.S/482 Cr.P.C. has been filed by the petitioner against
the order dated 26.03.2025 passed by learned District Judge,
Rajsamand in Criminal Case No. 20/2025 whereby, the
learned Judge dismissed the revision and affirmed the order
dated 23.01.2025 passed by Chief Judicial Magistrate,
Rajsamand dismissing the application filed by the petitioners
against de-freezing their Bank accounts in connection with
[2025:RJ-JD:26095] (2 of 12) [CRLMP-3311/2025]
FIR No. 147/2024 registered at Police station Rajnagar,
District Rajsamand.
Briefly, the facts of the case are that the complainant
Pushkar Patidar has lodged an FIR No. 147/2024 against the
main accused Hukam Singh and other persons including the
present petitioners for offence under Sections 420, 406, 381,
120-B IPC. During investigation, the police freezed the Bank
accounts of the petitioners. Being aggrieved, the petitioners
preferred an application before the Chief Judicial Magistrate,
Rajsamand who dismissed the said application vide order
dated 23.01.2025. Being aggrieved, the petitioners preferred
a revision petition before the learned Sessions Judge,
Rajsamand, which too came to be dismissed.
Learned counsel for the petitioners submits that the
primary allegation of embezzlement pertains exclusively to
the main accused, Hukam Singh, and Bhim Singh. It is
noteworthy that the bank account of Hukam Singh has
already been frozen; however, the present petitioners, who
are the wife and sons of Hukam Singh, are not alleged to
have committed any act of embezzlement. Counsel further
contends that the investigating agency has indiscriminately
frozen the petitioners' bank accounts and halted all
transactions therein, despite the absence of any direct nexus
with the alleged offence. Such action, he argues, is arbitrary
and unlawful. It is also argued that the petitioners are duly
registered Income Tax payers, and all their transactions are
transparent and accountable. Consequently, the freezing of
their entire bank accounts amounts to an unjust deprivation
[2025:RJ-JD:26095] (3 of 12) [CRLMP-3311/2025]
of their right to carry on lawful business activities.
Additionally, even if the powers under Section 102 of the
Criminal Procedure Code are assumed to be applicable, the
freezing of the petitioners' bank accounts is illegal for want of
compliance with the mandatory provisions of Section 102(3)
of the Cr.P.C., which stipulates that such action must be
reported to the concerned Magistrate. Learned counsel
emphasizes that investigating authorities cannot circumvent
the procedural safeguards prescribed under criminal law.
Therefore, he submits that the impugned orders are liable to
be quashed, and a direction be issued to the bank to permit
the petitioners to operate their bank accounts freely. Learned
counsel for the petitioner placed reliance on the judgment of
Delhi High Court in the case of Muktaben M. Mashru Vs.
State of NCT of Delhi & Ors reported in 2019 : DHC 6520
and order passed by co-ordinate Bench of this Court in the
case of Shree Radhe Enterprises Vs. Reserve Bank of
India & Ors (S.B. Civil Writ Petition No. 7177/2025) decided
on 01.05.2025.
Per contra, learned Public Prosecutor contended that
the authority of the investigating officer to seize an article
pursuant to Section 102 of the Criminal Procedure Code
remains unimpaired, and that even the absence of a formal
report to the concerned Magistrate regarding such seizure
does not ipso facto invalidate the seizure itself.
The investigating officer present in person candidly
acknowledged that no information regarding the seizure of
the bank account, in accordance with Section 102 of the
[2025:RJ-JD:26095] (4 of 12) [CRLMP-3311/2025]
Cr.P.C., which mandates reporting such seizure to the
concerned magistrate, was conveyed to the concerned
magistrate. It is evident that this requirement has been
demonstrably violated in the present case.
I have heard learned counsels for the parties and
carefully gone through the entire material on record.
The unwarranted freezing of bank accounts by
investigating authorities in a mechanical manner has
emerged as a growing concern confronting Indian businesses
and corporate entities. Such actions are frequently
predicated solely on mere allegations or suspicions that
tainted funds have been credited into the accounts of
innocent parties, be they business entities or individuals,
without the necessity of the accused being formally charged
or even named in the First Information Report (FIR).
Consequently, accounts may be frozen during the course of
investigations, irrespective of the account holder's direct
involvement in any offence. This practice can severely impair
the operational functioning of a business and inflict
significant financial hardships upon the concerned parties,
often plunging them into dire straits.
In this discourse, this Court seeks to delineate the
statutory procedural safeguards and legal position on this
issue and expound on the legal remedies available to an
aggrieved party in cases of arbitrary freezing of bank
accounts. Therefore, to understand the scope of powers that
the investigating authorities possess to freeze a bank
account, one needs to dive into the source of the power
[2025:RJ-JD:26095] (5 of 12) [CRLMP-3311/2025]
itself. This source can be traced to Section 102 of the Code of
Criminal Procedure, 1973. The purpose of Section 102 of the
Cr.P.C. is to secure the property which has been or suspected
to be stolen or which has a direct nexus with the commission
of a crime from being 'disposed of' or 'destroyed'. Such a
measure of seizing property ensures that the court is able to
get back the property concerned. Section 102 of the Cr.P.C.
falls under Chapter VII which deals with the 'Processes to
Compel the Production of Things'. The provision states:
(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, 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, 2[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:]
[2025:RJ-JD:26095] (6 of 12) [CRLMP-3311/2025]
[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.]
After perusal of the Section 102(3) of the Cr.P.C. it is
clear that the investigation officer shall forthwith report the
seizure to the Magistrate having jurisdiction. The Hon'ble
Supreme Court of India and High Courts of the different
States repeatedly held that the provision under Section
102(3) of Cr.P.C. requires that the police officer shall
forthwith report the seizure to the Magistrate having
jurisdiction. In the case on hand, the account was frozen
during investigation and the same was not informed to the
concerned Magistrate concerned even till now. Thus, the
condition contemplated under Section 102(3) of Cr.P.C. to
forthwith report the seizure before the Magistrate has not
been complied with.
On an analysis of Section 102 of the Cr.P.C., the
following broad essentials emerge:
a) The use of the terms such as 'seize' and 'produce' as
included in the provision indicate that the phrase 'any
property' as used under Section 102 of the Cr.P.C. will
apply only to movable property and excludes immovable
property.
[2025:RJ-JD:26095] (7 of 12) [CRLMP-3311/2025]
b) For the purpose of Section 102 of the CrPC, the
property must be either:
Alleged or suspected to have been stolen; or
Have a nexus between the property and the
commission of the crime.
It is noteworthy that the most frequently violated
condition under Section 102 pertains to the requirement of
informing the Magistrate about the seizure of property.
Specifically, Section 102(3) of the Cr.P.C. mandates that
"every police officer acting under sub-section (1) shall
forthwith report the seizure to the Magistrate having
jurisdiction." A breach of this mandatory procedural
requirement often provides the judicial basis for courts to
order the de-freezing of bank accounts, thereby safeguarding
the rights of the parties involved.
The Madras High Court in the case of T. Subhulakshmi
Vs. The Commissioner of Police and Ors. Reported in
2013 (3) MWN (Cr.) has observed that:-
"27 From the dictum laid down in the judgments relied
on by the learned senior counsel for the petitioners it is
clear that the bank account is a property within the
meaning of Section 102 of Cr.P.C. and sub-section (3) to
Section 102 requires the reporting of seizure of the
property to the concerned Magistrate forthwith, which is
mandatory in nature. Moreover, the freezing of bank
account is an act of the investigation and therefore, the
duty is cast upon the Investigating Officer under Section
102(3) of Cr.P.C. to report the same to the Magistrate,
since the freezer of the bank account prevents the
person from operating the bank account pursuant to an
[2025:RJ-JD:26095] (8 of 12) [CRLMP-3311/2025]
investigation by the Police in a criminal case registered
against him. If there is any violation in following the
procedures under Section 102 of Cr.P.C., the freezing of
the bank account cannot be legally sustained. Since in
the case on hand the 2nd respondent-Police has not
reported the freezing of the bank accounts of the
petitioners herein to the concerned Magistrate forthwith,
which is mandatory under Section 102(3) of Cr.P.C., the
proceedings of the 2nd respondent-Police in freezing of
the bank accounts of the petitioners herein are not
legally sustainable."
The Delhi High Court in the case of Muktaben
M.Mashru v. State (NCT of Delhi), decided on 29.11.2019,
held that if the procedures under Section 102 are not
followed, the freezing of the Bank Account is not legally
sustainable. The relevant paragraphs are extracted below:
"31. In the case of T.Subbulakshmi v. The
Commissioner of Police (supra), it was held that if
there is any violation in following the procedures
under Section 102 Cr.P.C., the freezing of the Bank
Account cannot be legally sustained. Freezing of
Bank Account is an act of investigation by the
police and therefore, duty is cast upon the IO
under Section 102 Cr.P.C. to report the same to
the Magistrate forthwith as freezing prevents a
person from operating his Bank Account.
32. Further, in the case of Uma Maheswari v. State
rep. by Inspector of Police, MANU/TN/2766/2013,
the Court held that reporting of the freezing of the
Bank Accounts is mandatory. Failure to do so will
vitiate the freezing of the bank account. It shall be
reported 'forthwith' to the jurisdiction Magistrate.
The phrase 'shall' employed in Section 102(3)
[2025:RJ-JD:26095] (9 of 12) [CRLMP-3311/2025]
Cr.P.C. is held to be mandatory in nature and
violation of it goes to the root of the matter.
33. Recently, in the case of Manish Khandelwal v.
State of Maharashtra, MANU/MH/2041/2019,
decided on 30.07.2019, the Court rejected the
contention that non-compliance of the procedure
laid down under Section 102 Cr.P.C. is only an
irregularity and will not vitiate freezing of the
Bank Accounts. It was held that in case the
mandatory provision under Section 102 Cr.P.C.
has not been followed then it would entail the
consequence of giving directions to defreeze the
Bank Account. The duty of reporting to Magistrate
any seizure of Bank Account is cast upon the IO
as freezing of the Bank Account prevents the
person from operating the Bank Account pursuant
to investigation. If there is any violation in
following the procedures under Section 102 Cr.P.C,
freezing of account cannot be legally sustained."
In the case of Uma Maheswari & Anr. v. State rep.
by Inspector of Police, decided on 29.11.2019, the Court
held that reporting of the freezing of the bank accounts is
mandatory. Failure to do so will vitiate the freezing of the
bank account. It shall be reported 'forthwith' to the
jurisdiction magistrate. The phrase 'shall' employed in
Section 102(3) Cr.P.C. is held to be mandatory in nature and
violation of it goes to the root of the matter. The relevant
portions of the aforesaid judgment reads as under:
"33. In seizing the properties, the investigating
officer has to follow certain procedures. That has
been prescribed in Section 102 Cr.P.C. It runs as
under:
[2025:RJ-JD:26095] (10 of 12) [CRLMP-3311/2025]
"102. Power of police officer to seize certain
property.-
xxxxxxxx
41. In pursuing investigation under Section 102
Cr.P.C., the Code empowered the police officers to
deprive a person of his properties. In this context,
the phrase, "shall" employed in Section 102(3)
Cr.P.C., is held to be mandatory in nature. Violation
of it goes to the root of the matter.
xxxxxxx
44. The Investigation Officer has suspected that
the moneys swindled were secreted by the accused
persons in their Bank accounts. Thus, he took
steps to freeze the Bank accounts.
45. We have elaborately seen that such freezing of
the Bank accounts shall be reported to the
jurisdiction Magistrate. When it is to be reported
has been stated in Section 102(3) Cr.P.C. It is
stated therein that it shall be reported "forthwith"
to the jurisdiction Magistrate. The reporting of the
freezing of the Bank accounts is mandatory. Failure
to do so will vitiate the freezing of the bank
account. In this back drop of the matter, the word
"forthwith" shall mean 'immediately', 'without
delay', 'soon'.
46. In this case, the freezing of the Bank accounts
were done on 30.04.2013 and on 3.5.2013.
However, the Investigation Officer has reported
this to the learned XI Metropolitan Magistrate,
Saidapet only on 27.6.2013. This will not be
reporting of the freezing of the Bank account to
the Magistrate forthwith. Thus, there is breach of
mandatory requirement of law. Thus, the freezing
of the Bank accounts is vitiated."
[2025:RJ-JD:26095] (11 of 12) [CRLMP-3311/2025]
Therefore, taking into consideration the submissions of
both the parties as the legal position and judicial
pronouncements, more specifically in view of the judgments
discussed hereinabove, this Court has no hesitation to hold
that the reporting of the freezing of bank accounts is
"mandatory". Failure to do so, apart from other conditions,
will vitiate the freezing of bank account, which should be
'forthwith' reported to the concerned Magistrate and non-
compliance of this mandatory requirement goes to the root of
the matter. If there is any violation in following the
procedures under Section 102 of the Cr.P.C., the freezing of
the bank accounts cannot be legally sustained.
Additionally, the above discussion leads to the
conclusion that, while delay in forthwith reporting the seizure
to the Magistrate may only be an irregularity, total failure to
report the seizure will definitely have a negative impact on
the validity of the seizure. In such circumstances, account
holders like the petitioners, most of whom are not even
made accused in the crimes registered, cannot be made to
wait indefinitely hoping that the police may act in tune with
Section 102 and report the seizure as mandated under Sub-
section (3) at some point of time.
In this view aforesaid discussion, the Criminal Misc.
Petition is hereby allowed. The impugned orders dated
26.03.2025 passed by learned District Judge, Rajsamand in
Criminal Case No. 20/2025 and the order dated 23.01.2025
passed by Chief Judicial Magistrate, Rajsamand refusing to
de-freeze the Bank accounts of the petitioners are hereby set
[2025:RJ-JD:26095] (12 of 12) [CRLMP-3311/2025]
aside, and it is hereby directed to the bank to de freeze the
accounts of the present petitioners. However, in the interest
of justice, it would be appropriate to impose a condition
whereby the petitioners shall execute bonds before the Trial
Court, undertaking to produce the requisite amount in Court
whenever required.
Stay application is also disposed of.
(MANOJ KUMAR GARG),J
3-BJSH/-
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