The petitioner, who is a third party to the proceeding initiated by
the first respondent in Cr.No.32/2002 under Sections 465,468,471,42 0 and
120-B IPC and transferred to the file of the second respondent for
investigation, has come forward to file the above criminal original petition
on averments such as that he is having multifarious business activities of
mining, purchase and sale of minerals under the names and styles of
M/s.Abirami Mineralas and Chemicals, M/s.Sekar Mines and Sekar Sales Syndicate
Etc. and the respondents 1 and 2, under the pretext of doing investigation in
the said case on an alleged confession said to have been made by the prime
accused in the said case viz. Prabhakaran that in order to over come certain
difficulties, he paid a sum of Rs.16 lakhs to the petitioner, have given
instructions to the banks to freeze the accounts of the petitioner, which, the
petitioner came to know from the letters dated 14.9.2002 addressed by the
Salem Branches of Allahabad Bank and the State Bank of India. The petitioner
would further state that he has no business dealings or any connection with
the said Prabhakaran and that all his business transactions are covered by
cheques and drafts not only keeping the accounts intact but also the tax being
paid in the manner required by law.
2. The petitioner, further extracting Section 102 of the Code of
Criminal Procedure, which empowers the Police Officer to invoke the power to
freeze the bank accounts, would submit that the Section empowers the
Investigating Officer to seize the property suspected to have been stolen or
creates suspicion of the commission of an offence and without these
ingredients being specified, the power granted under Section 102 Cr.P.C.
cannot be invoked by the Investigating Officer to freeze the bank accounts of
the petitioner as the first and second respondents have resorted to; that the
allegation that the bank account is a sequel to the discovery of the
commission of the offence is illegal and consequently, the direction of the
respondents 1 and 2 issued to the banks to freeze the accounts and deposits of
the petitioner is equally illegal; that the respondents 1 and 2 have not
followed the procedures established by law; that the petitioner's accounts are
the business accounts and the direction issued by the respondents 1 and 2 to
freeze the same is susceptible to have great impact and serious consequences
on his business; that there was no notice to him by the respondents and on
such grounds, the petitioner would ultimately pray to the relief extracted
supra.
3. No counter would be filed on the part of the respondents, but the
learned Government Advocate on the criminal side would argue on instructions
of the respondents and therefore this Court is left with no option but to
decide the above petition in consideration of the facts pleaded, having regard
to the materials placed on record and upon hearing the learned counsel for
both, in which event it comes to be seen that the petitioner is an independent
businessman doing business in mining, purchase and sale of minerals under the
names and styles of different companies and that his bank accounts have been
ordered to be frozen by the banks concerned including that of some of his
family members at the instance of the respondents requiring the banks to
freeze the accounts of the petitioner and his companies thus restraining them
from operating the accounts consequent to the requisitions made on the part of
the first and second respondents vide their letters dated 2.9.2002 and
5.9.2002.
4. It further comes to be known that the respondents have resorted to
initiate measures to freeze all the bank accounts of the petitioner and some
of his family members on ground that in the confession statement alleged to
have been given by an accused viz. Prabhakaran in Cr.No.32/2002, while he was
interrogated by the respondents for the offences alleged to have been
committed on his part under Sections 465,4 68,471,420 and 120-B IPC registered
on the file of the first respondent, he had stated that to ward-off some of
the inconveniences which came in the way of operating his business, he paid
certain amounts to the petitioner and this statement of the accused in the
said case investigated by the respondents 1 and 2 is alleged to have given the
cause of action for ordering the freezing of the bank accounts of the
petitioner, who is otherwise in no way connected to the said criminal case
alleged to have been registered against the said Prabhakaran and investigated
into by the respondents and it is the admitted case of the respondents that
the petitioner is neither an accused in the said case nor had he been
connected in any other manner regarding the commission of the offence
registered and investigated into by the respondents.
5. In the above circumstances, the only question that rages supreme
for consideration is `whether it is necessary or incumbent on the part of the
respondents 1 and 2 to have ordered the freezing of the bank accounts of the
petitioner and that of his family members?'
6. Section 102 of the Code of Criminal Procedure is the provision of
law which empowers the Police Officer to do certain acts in the course of
investigation wherein the Police Officer may seize any property which may be
alleged or suspected to have been stolen or which may be found to be under
suspicious circumstances regarding the commission of the offence. This is
only regarding seizure of properties having some nexus with the commission of
the offence in which event the Police Officer shall seize the property and
entrust the same with the custody of the Court and there is no specific
mention in the Section regarding the freezing of the accounts which have been
rendered by the upper forums of law by means of legal propositions only in
adherence to which, the Police Officer could request or order the banks to
freeze the accounts of such persons following such procedures required under
such circumstances.
7. For the application of the Section, the basic requirements are
that the properties sought to be seized or frozen must be either stolen
properties or they should have been found to have some nexus with the alleged
offence which is under investigation of the Police Officer concerned. So far
as the case in hand is concerned, neither any of the requisitions or orders
made on the part of the first and second respondents with the banks wherein
the petitioner is maintaining the accounts, speaks about such requirements of
this provision of law under Section 102 of the Code of Criminal Procedure nor
has it been brought forth during the arguments regarding the nexus of the
accounts being maintained or operated on the part of the petitioner in the
banks with the felon and therefore, preliminarily, it could be concluded that
the warranting ingredients of the Section 102 of the Code of Criminal
Procedure have not been brought in to the fact situation of the case in hand.
8. Further, on the part of the respondents, they have also not made
it clear or explained to the effect as to what is the object sought to be
achieved by ordering the bank accounts of the petitioner frozen. This Court
is not able to see, by such of the acts perpetrated on the part of the
respondent in ordering to freeze the bank accounts of the petitioner, any
constructive purpose to be served regarding the investigation of the case
registered against a third party on different grounds nor is it the case of
the respondents that the operation of the bank accounts by the petitioner is
having any nexus or impact or susceptible to impair the investigation.
9. The procedure contemplated by the legal propositions in such event
of ordering the freezing of the accounts of any party are also not taken care
of by the respondents since it is well established that in case of freezing of
a bank account, the police officer should do two things: he should inform the
concerned Magistrate forthwith regarding the prohibitory order and he should
also give notice of seizure to the accused and allow him/her to operate the
bank account subject to his/her executing the bond undertaking to produce the
amounts in Court as and when required. Even this condition in the event of
notice has been imposed only against the accused and the petitioner not being
an accused, it is farfetched that such conditions are required to be imposed
on the petitioner and therefore, so far as the petitioner operating his bank
accounts are concerned, this Court is unable to see that such operation is
having any nexus or relevance regarding the investigation of the offence
registered against the actual accused wherein the subject matter is entirely
different having no relationship with the allegation of some confession made
by the accused and it is farfetched to freeze the bank accounts of the
petitioner and his family members as the respondents No.1 and 2 have resorted
to, which is not only undesirable to have resorted to on the part of the
respondents 1 and 2 but also with no useful purpose to be served in the case
under their investigation.
10. At this juncture, it is relevant to consider the value of the
confession of an accused while in custody of the police which is a weak piece
of evidence based on which the respondents are not supposed to initiate such
drastic steps to impair the business of anyone who is not an accused in the
case ordering to freeze the Bank Accounts or obstructing such persons from
operating their accounts. In these circumstances, the only irresistible
conclusion that could be arrived at by this Court is to order that the
respondents 1 and 2 in order to freeze the petitioner's bank accounts have
acted in excess than what they are empowered by law particularly when such
powers are required to be invoked with utmost restraint while resorted against
third parties such as the petitioner.
11. During arguments, the learned counsel for the petitioner besides
submitting that the said confessional statement given by the said Prabhakaran
has been retracted, has also brought to the notice of this Court the recent
order passed by a learned single Judge of this Court in a similar application
filed by none other than the son of the petitioner in Crl.O.P.No.24398 of 2002
whereby the learned single Judge, by his order dated 11.10.2002, having
assessed the operational sphere of the petitioner's business and the act
perpetrated on the part of the respondents in ordering to freeze the bank
accounts of the petitioner's son and further analysing Section 102 of the
Cr.P.C. and commenting on the same relating to the requisition made on the
part of the respondents to freeze the accounts of the petitioner and his son,
would find absolutely no justification and would ultimately revoke the
prohibitory order issued by the Deputy Superintendent of Police, CBCID,
Coimbatore against the son of the petitioner in the same manner as it has been
done on the part of the first and second respondents pertaining to the
accounts of the petitioner herein in one and the same subject matter. This
Court has had the occasion to go through the said order and is in perfect
agreement of not only the conclusions arrived at by the learned single Judge,
but also the manner in which the conclusions have been arrived at.
12. On the part of the respondents, the learned Government Advocate
would also cite a judgment of the learned single Judge of this Court delivered
in C.ARANGANAYAGAM vs. STATE, BY DIRECTORATE OF VIGILLANCE AND ANTI
CORRUPTION, ERODE DETACHMENT, EROD D ANOTHER reported in 2000 MLJ (crl.)20
where, in a case registered by the Directorate of Vigillance and Anti
Corruption for the commission of the offence on the part of the accused under
Section 13(2) r/w.13(1)(3) of the Prevention of Corruption Act, the learned
single Judge, has arrived at the conclusion that
Every Police Officer acting under Section 102(1) Cr.P.C. shall forthwith
report the seizure to the Magistrate having jurisdiction. Simply because the
first respondent failed to comply with Section 102(3), Criminal Procedure
Code, the entire freezing of the account is not vitiated.
This judgment is in a case of corruption wherein the accounts of the accused
therein have been frozen and in a case of corruption, the investigation is
done entirely on a different platform and therefore the decision arrived at by
the learned single Judge pertaining to the facts and circumstances encircling
the said case have absolutely no bearing on the facts and circumstances and
the position of law regarding the case in hand and therefore the norms held
therein cannot be applied to this case.
In result,
(i) the above criminal original petition succeeds and the same is allowed.
(ii)The directions of the respondents 1 and 2 given to the Allahabad Bank,
Salem and the State Bank of India Siruthozhil Branch, Salem by their
requisitions dated 2.9.2002 and 5.9.2002 to freeze the accounts of the
petitioner and his firms are hereby set aside.
Index: Yes
Internet: Yes
Rao
To
1.The Inspector of Police,
Shevapet Police Station, Salem.
2.The Inspector of Police,
Suramangalam Police Station,
Salem.
3.The Dy.Superintendent of Police,
CBCID., Coimbatore.
4.The Public Prosecutor,
High Court, Madras.