Case Title: Ratan Babulal Lath v. The State Of Karnataka
According to the Supreme Court, Section 102 of the Code of Criminal Procedure cannot be used to attach a person's bank account who has been charged under the Prevention of Corruption Act.
"It is not possible to sustain the freezing of the appellant's bank account under Section 102 Cr.P.C. because the Prevention of Corruption Act is a Code in and of itself," a bench of Justices Sanjay Kishan Kaul and MM Sundresh observed while allowing an appeal against a Karnataka High Court decision.
A charge sheet was filed against 14 accused persons in this matter, alleging the conduct of offences punishable under Sections 13(1)(a) read with 13(2) of the Prevention of Corruption Act 1988, Sections 420, 465, 468, 471, and 120B r/w.34 of the Indian Penal Code. They were accused of large-scale fraud of Rs.56.37 crores, which they allegedly committed in collusion with Bruhat Bengaluru Mahanagara Palike (BBMP) officials and private individuals.
The Additional City Civil and Sessions Judge in Bengaluru dismissed the accused's petitions under Sections 451 and 457 of the Cr.P.C. seeking to defreeze bank accounts locked under Section 102 of the Cr.P.C. On two grounds, several of the High Court accused challenged this order. One, the accusations in the charge sheet appear to indicate that neither the BBMP nor the State has suffered any loss due to the purported transaction. Two, the investigating officer failed to follow the required formalities in carrying out the seizure under section 102 of the Cr.P.C. The High Court rejected both of these arguments and maintained the lower court's decision not to order the bank accounts to be unfrozen.
The only question before the Supreme Court was whether the attachment of the appellant's bank account was legal under Section 102 Cr.P.C.
A police officer may seize any item that is said or believed to have been stolen or that is discovered under circumstances that raise suspicion of the commission of any offence, under Section 102 CrPC. According to Section 18A of the Prevention of Corruption Act, the provisions of the Criminal Law Amendment Ordinance, 1944, shall apply to the attachment, administration of attached property, and execution of an order of attachment or confiscation of money or property obtained through an offence under the PC Act, to the extent permitted.
The state stated that they are in the process of applying an application under Section 18A of the Prevention of Corruption Act, 1988, because the previous authorization issued by the Government under Section 3 of the Criminal Law Amendment of Ordinance, 1944, did not take the form of a Government Order.
"Be that as it may, on that account, 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. Given the aforesaid position, the freezing of the account of the appellant cannot be sustained and is, accordingly, set aside.", the court said allowing the appeal.