Whether freezing of bank accounts of the accused can legally sustain under Section 102 CrPC when the accused has been charged of the offences under the Prevention of Corruption Act? Lets’ analyse the question in light of the judgments and the law governing the field.
Recently, the Supreme Court while hearing a criminal appeal has held that it is not possible to sustain the freezing of the bank account of the appellant taking recourse to Section 102 Cr.P.C. as the Prevention of Corruption Act is a Code by itself.
The criminal appeal was filed against the order passed by the High Court of Karnataka after dismissing the revision petition of the appellant.
Factual Background of the Case:
The respondent had filed a charge sheet against 14 accused persons including the appellant alleging the commission of offences punishable under Section 13(1)(a) read with 13(2) of Prevention of Corruption Act, 1988 and Sections 420, 465, 468, 471, 120B of IPC r/w 34 of IPC. It was alleged by the respondent that the appellant and other accused persons in connivance with the officials of BBMP have been involved in the commission of a large scale fraud to the tune of Rs. 56.37 Crores. During the course of investigation, the bank accounts of the appellant were seized under section 102 CrPC and were restrained from operating the said accounts.
Proceeding before the Trial Court:
On coming to know of the freezing of the account, the appellant filed application under section 451 r/w 457 of CrPC with a prayer to defreeze the account on the ground that investigating officer failed to comply with the requirements of Section 102 CrPC and the accounts maintained by the appellant has no nexus with the offence alleged against the accused. However, the application came to be dismissed by the trail Court. The order of dismissal was later assailed by the appellant by filing revision petition before the High Court of Karnataka.
Proceeding before the High Court in Revision:
The appellant assailed the impugned order of the trial court mainly on two grounds. Firstly, that the allegations made in the charge sheet, on the face of it, indicate that neither the BBMP not the State has sustained any loss in respect of the alleged transaction and Secondly, the requisite formalities have not been followed by the investigating officer in effecting the seizure under Section 102 Cr.P.C.
The Hon’ble High Court said that Section 102 CrPC empowers the investigating officer to seize the property suspected to have been stolen or any property which is found under circumstances which create suspicion of the commission of any offence. The Section 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, 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 thousand 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.”
The High Court had observed that this provision does not cast any obligation on the Investigating Officer to issue prior notice to the accused or any opportunity to the account holder to operate the account seized or frozen during the course of investigation. The only mandate prescribed under sub-section (2) of section 102 of Cr.PC is that, if the seizure is effected by the Police Officer sub-ordinate to the officer-in-charge of the Police Station, he shall forthwith report the seizure to the officer-in-charge of the Police Station and as per sub-section (3), the Police Officer effecting the seizure shall forthwith report the seizure to the Magistrate having jurisdiction and nothing more. This mandatory requirement appears to have been duly complied.
Ultimately the High Court found the petition devoid of merits and was therefore dismissed. The same order of dismissal was challenged by the appellant by way of filing the instant criminal appeal before the Hon’ble Supreme Court.
Proceedings before the Supreme Court:
The criminal appeal was filed against the judgment and order of the High Court of Karnataka. While hearing the criminal appeal the Hon’ble Court examined the only question that whether the attachment of bank account of the appellant is sustainable in exercise of powers under Section 102 Cr.P.C.
The Court observed that freezing of bank account of the appellant cannot sustain by taking recourse to Section 102 Cr.P.C as the Prevention of Corruption Act is a Code by itself and accordingly the Court set aside the impugned order.
Section 18A of the Prevention of Corruption Act provides for the seizure and attachment of property. It may be noted that the procedure provided under this Section can only be adopted whenever the accused is charged of the offences under the Prevention of Corruption Act and not otherwise as the PC Act is a special legislation and a code itself. Accordingly, the Supreme Court has very rightly held that the freezing of bank accounts of the accused involved in the commission of offences under PC Act cannot sustain by taking recourse to Section 102 Cr.PC.
Ratan Babulal Lath vs The State of Karnataka
SLP No. 2987/2021
Coram: Justice Sanjay Kishan Kaul and Justice M. M. Sundresh