- Bookmark
- Share
- CaseIQ
Ms. Swaran Sabharwal v. Commissioner Of Police.
Structured Summary of the Provided Opinion
Factual and Procedural Background
The petitioner is Ms. Swaran Sabharwal, wife of Shri Ram Swarup, who held savings bank account No. 1656 with the American Express International Banking Corporation (respondent No. 4). Her writ petition challenged the freezing of that savings account at the instance of respondent No. 2 (Deputy Commissioner of Police, Special Branch, Delhi). The petitioner alleged that she had not been supplied a copy of the order freezing the account and that respondent No. 4 refused to permit her to operate it because of a prohibitory order from respondent No. 2.
Respondent No. 2 had issued a letter dated October 31, 1985 to the manager of the bank stating the subject as regarding ceasing of an account in respect of "Sh. Ram Swarup ... arrested in case FIR No. 216, dated September 23, 1985 under sections 3, 4 and 5, 7 of the Official Secrets Act read with 120B, IPC, P.S. Tughlaq Road, Delhi." The memorandum instructed that Mr. Swaran Sabharwal (described as son of Ram Swarup) holder of account No. 1656 had been arrested and his account "may kindly be ceased forthwith and he may not be allowed to operate his account."
The petitioner challenged the prohibitory order as invalid and sought permission to operate the bank account during the pendency of the writ petition. On interim applications (C.Ms. Nos. 882, 883 of 1986) the court recorded that if the writ petition were ultimately allowed, respondents 1 to 3 would pay 18% per annum interest with effect from October 31, 1985 until the date of allowance; the court ordered accordingly and directed expeditious hearing. The petitioner had earlier approached the Magistrate trying her husband; the Magistrate dismissed her application after the police opposed it on the ground that the bank account was not "case property."
Legal Issues Presented
- Whether the prohibitory order dated October 31, 1985 freezing the petitioner's bank account is valid or should be quashed.
- Whether Section 102 of the Code of Criminal Procedure can be relied upon to justify seizure (or restriction) of a bank account in the circumstances of this case.
- If Section 102 is applicable, whether the procedural requirements of that provision were complied with (notice to Magistrate, notice to person, possibility of bond, etc.).
- What relief (including interest and costs) the petitioner is entitled to if the prohibitory order is quashed.
Arguments of the Parties
Petitioner's Arguments
- The prohibitory order freezing the account is wholly invalid and should be quashed.
- She had not been supplied a copy of the order and was being prevented from operating her bank account unjustifiably.
- She sought permission to operate the account during pendency of the petition (interim relief).
Respondents' Arguments
- The Deputy Commissioner of Police's letter contained an inadvertent error regarding the name/relationship; the original letter sent to the bank was said to be correctly worded.
- The prohibitory order could be sustained by reference to Section 102 CrPC (the power to seize property found under circumstances creating suspicion of an offence).
- Counsel for respondents relied on several authorities to support the proposition that a bank account can be treated as "property" under Section 102 and that the police had reason to believe that funds obtained by the petitioner's husband through offences had been transferred to the petitioner and deposited in this account, justifying seizure.
- Before the Magistrate, the police contended the bank account was not "case property" and that the petitioner's remedies lay elsewhere, leading the Magistrate to dismiss her application.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bhimji Ramji Gujrathi v. Emperor, AIR 4944 Nagpur 366 | To support the proposition that a bank account can be treated as "property" within the meaning of Section 102 CrPC. | The court referred to this as one of the authorities where seizure under Section 102 was upheld in factual contexts involving discovery of property; it used the case to illustrate the type of factual circumstances required but found the present facts distinguishable. |
| Babulal Agar-walla v. Province of Orissa, AIR 1954 Orissa 225 | Similar support for treating bank-related holdings as property for purposes of seizure under Section 102. | The court noted this authority among others showing Section 102 applied where property was found in circumstances creating suspicion; but it held that those factual patterns did not exist here. |
| Krishnan Sukumaran v. Enforcement Officer, Cochin, AIR 1968 Ker. 208 | Authority cited for the proposition that accounts/monies can constitute property for seizure where discovery generates suspicion of an offence. | The court cited it to exemplify cases where Section 102 applied, and distinguished the present matter on the basis that the account here was not discovered in circumstances creating the requisite suspicion. |
| Dr. Gurcharan Singh v. State of Punjab, [1978-80] PLR 514 | Cited in support of the proposition that monies/accounts may be treated as property under Section 102. | The court included this authority among precedents showing the application of Section 102 where property discovery gave rise to suspicion; it concluded those precedents did not carry the present case because the account here was not itself discovered in suspicious circumstances. |
Court's Reasoning and Analysis
The court's analysis proceeded in distinct steps anchored to facts and statutory interpretation:
-
Legality of the October 31, 1985 prohibitory order:
- The court held that the prohibitory order was illegal on its face and should be quashed. It identified a clear "mix-up" in the letter regarding the petitioner's sex and relationship to Ram Swarup: the letter treated the account as if it were in the name of Ram Swarup's son, whereas the petitioner is Ram Swarup's wife.
- More significantly, the letter wrongly stated that the petitioner had been arrested in connection with the Official Secrets Act offences; counsel for respondents conceded she had neither been arrested nor accused of those offences. The court characterized the letter as "reckless" and as showing a "complete non-application of mind" and therefore invalid.
-
Applicability of Section 102 CrPC:
- The respondents relied on Section 102 CrPC (text set out in the opinion) to justify the confiscation/seizure. The court first expressed uncertainty whether monies held in a bank account can be "seized" by means of a prohibitory order in the manner used here.
- Accepting, arguendo, that a bank account could be "property" under Section 102, the court emphasized the statutory requirement that the property be "found under circumstances which create suspicion of the commission of any offence." The court analyzed the precedents cited by respondents and observed that in those cases the property had been discovered in circumstances that themselves gave rise to suspicion (for example, unexplained large bank balances, possession of contraband on a person, storage in contravention of rules).
- By contrast, in the present case the bank account was not discovered in circumstances creating suspicion; rather the account was identified after or as a sequel to the discovery of the alleged offence by the petitioner's husband. The police merely suspected that proceeds of crime might have been transferred to the petitioner, but that suspicion based on the husband's alleged offences did not amount to the kind of discovery-based suspicion contemplated by Section 102.
-
Absence of justification for restraining operation of the account:
- The court observed that the respondents' asserted purpose—establishing that funds had been transferred from the husband to the petitioner—could be achieved by comparing account entries without freezing the account, because account entries are always available for inspection.
- It further noted that the department did not contend that the monies were "case property" (i.e., the property directly involved in the commission of the offence), which undermined the rationale for seizure by prohibitory order.
-
Non-compliance with procedural requirements of Section 102:
- Even assuming Section 102 applied, the court held respondents did not follow its procedural mandates. Adapting Section 102 to bank accounts, the police should have: (a) reported the seizure forthwith to the Magistrate having jurisdiction; and (b) given notice to the petitioner and allowed operation of the account subject to the execution of a bond or other court direction. None of these steps were taken.
- The petitioner was not even provided a copy of the prohibitory order. When she approached the Magistrate trying her husband, the police opposed her request, arguing that the account was not case property; the Magistrate accepted the police position and dismissed her application, leaving her to seek relief by way of writ petition before the High Court.
-
Relief measures and incidental considerations:
- The court applied its earlier interim order (dated May 4, 1986) which had provided for interest at 18% per annum in the event the writ petition was ultimately allowed. The court directed respondents Nos. 1 to 3 to pay interest at the rate of 18% per annum on the balance standing to the petitioner's credit on the date of the prohibitory order (stated as Rs. 42,770.14) from May 4, 1986 until the date of the present order.
- Although counsel for the petitioner sought costs, the court declined to make any orders as to costs, reasoning that interest had been awarded during the pendency of the petition.
Holding and Implications
Holding: The prohibitory order dated October 31, 1985 is quashed.
Direct consequences and orders given by the court:
- The court quashed the prohibitory order by which the petitioner was prevented from operating bank account No. 1656.
- The court directed respondents Nos. 1 to 3 to pay interest at 18% per annum on the amount standing to the petitioner's credit on the date of the prohibitory order (specified as Rs. 42,770.14), running from May 4, 1986 until the date of the court's order.
- The writ petition was disposed of. There will be no order as to costs.
Implications:
The decision's immediate effect is the restoration of the petitioner's ability to operate her bank account and an award of interest for the period specified. The opinion does not state that it establishes any new general legal precedent; rather, the court distinguished the cited authorities on their facts and applied established principles concerning the scope of Section 102 CrPC and the procedural safeguards it requires before property may be treated as seized.
Note: This summary is strictly confined to information contained in the provided opinion and does not add or infer facts beyond the text of that opinion.
S. Ranganathan, J.:— The petitioner, Ms. Swaran Sabharwal, is the wife of Shri Ram Swarup. She maintains a savings bank account with the American Express International Banking Corporation (respondent No. 4), the number of the account being 1656. Her grievance in the writ petition is that the above savings account has been frozen at the instance of respondent No. 2. It is alleged that she has not even been supplied with a copy of the order freezing her account, but that respondent No. 4 is refusing to permit her to operate her account because of such a prohibitory order from respondent No. 2.
2. It is now common ground that the Deputy Commissioner of Police, Special Branch, Delhi (respondent No. 2), has issued to the manager of the American Express Bank, a letter dated October 31, 1985. The subject matter of the letter as set out in the letter reads thus:
“Regarding ceasing of an account in r/o Sh. Ram Swarup s/o ……………… arrested in case FIR No. 216, dated September 23, 1985 under sections 3, 4 and 5, 7 of the Official Secrets Act read with 120B, IPC, P.S Tughlaq Road, Delhi.”
3. The memorandum proceeds to state:
“I am to inform you that Mr. Swaran Sabharwal, s/o. Ram Swarup, Holder of Bank Account No. 1656, has been arrested in the aforesaid case. His account may kindly be ceased forthwith and he may not be allowed to operate his account.”
4. The petitioner contends that this prohibitory order is wholly invalid and that the same should be quashed. The petitioner also applied for permission to operate the bank account during the pendency of the petition. After hearing both the parties, the court made the following order in the interim applications (viz., C.Ms Nos. 882, 883 of 1986):
“Heard. Mr. Lekhi states that it will be acceptable to him if the petitioner is not allowed to operate the bank account but orders are passed to the effect that, if the writ petition is ultimately allowed, respondents 1 to 3 will pay 18% per annum interest with effect from October 31, 1985, till the date of the petition being allowed. We feel that the suggestion is very fair and we order accordingly.”
5. The Bench also directed the expeditious hearing of the petition and the petition now comes up for hearing.
6. There can be no doubt that the prohibitory order dated October 31, 1985, is on the face of it illegal and should be quashed. It discloses a mix-up regarding the sex of the petitioner and her relationship to Ram Swarup who is the accused in FIR 216 referred to in the letter. The letter proceeds on the basis that the account was in the name of the son of Ram Swarup and that it was necessary that his account should be frozen. Counsel for the respondents submits that this was an inadvertent error and that in the original letter sent to the bank, the name and relationship have been set out correctly. But, even granting this, the letter is reckless in setting out the reason for the issue of the prohibitory order. It purports to say that the petitioner had been arrested in connection with the offence under the Official Secrets Act and that it was, therefore necessary to prevent her from operating the account. This is admittedly not correct. Counsel for the respondents concedes that the petitioner has neither been arrested nor accused of the offences mentioned in the letter. The prohibitory order dated October 31, 1985, therefore, discloses no valid or relevant reason for the direction given and discloses a complete non-application of mind to the circumstances in which the order was considered necessary. We, therefore, think that there is no alternative but to quash it.
7. Learned counsel for the respondents contended that the order dated October 31, 1985, could be sustained by reference to section 102 of the Code of Criminal Procedure. This section reads as under:
“102. (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, 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.”
8. Counsel referred to certain judgments to show that a bank account can be treated as “property” within the meaning of the above section: Bhimji Ramji Gujrathi v. Emperor, AIR 4944 Nagpur 366, Babulal Agar-walla v. Province of Orissa, AIR 1954 Orissa 225, Krishnan Sukumaran v. Enforcement Officer, Cochin, AIR 1968 Ker. 208 and Dr. Gurcharan Singh v. State of Punjab, [1978-80] PLR 514. He submitted that a perusal of the bank account of the petitioner with respondent No. 2 shows that monies had been transferred to her by her husband. According to counsel, the police had reason to believe that the funds obtained by the petitioner's husband as a result of the offences with which he is charged have been transferred to the petitioner and deposited in the above-mentioned bank account. He says that, in these circumstances, the seizure of the monies deposited with the bank can be justified by reference to section 102 above-mentioned.
9. We are not able to accept this argument. In the first place, we are not quite sure whether monies deposited in a bank account can be “seized” by means of a prohibitory order as has been done in the present case under the provisions of section 102. But assuming that a bank account is “property” within the meaning of the section, it should be property “found under circumstances which create the suspicion of the commission of an offence”, to justify action under section 102. In other words, it applies where a police officer comes across certain property in circumstances which create in his mind a suspicion that an offence has been committed. Thus, in the cases cited by counsel, action under section 102 was upheld where a public servant was found in possession of moneys in his bank account far in excess of his known sources of income, when a person was found in possession of a large quantity of small coins for sale in contravention of the Defence of India Rules, where a trader was found to have stored a large number of bags of rice in contravention of rules and orders and where a person was found standing on a public road with a bag containing several bundles of currency notes. The position here is different. Here, it is not the discovery of the property that has created the suspicion of an offence. There are no circumstances attendant upon the bank account or its operation that have led the officer to suspect that some offence has been committed somewhere. The discovery of the bank account here is a sequel to the discovery of the commission of the offence. The police suspect that some of the proceeds realised by the sale of official secrets have been passed on to the petitioner by her husband. This, we think, is not sufficient to attract section 102 as it cannot be said that the bank account has been traced or discovered in circumstances which have made the police aware of the commission of an offence.
10. We may further point out that no justification seems to exist for “seizing” the amounts in the bank account. All that the respondents seem to want to establish from the bank account is that some funds were transferred by the petitioner's husband to her. This can be proved at any time by a comparison of the two accounts and since the entries in the accounts are always available, no purpose seems to be served by restraining the operation of the bank account. Since, as we point out below, it is not the case of the department that the moneys in the bank constitute “case property”, i.e, the property involved in the commission of the crimes with which Ram Swarup is charged, the seizure of the monies by the issue of a prohibitory order cannot be upheld.
11. Again, even if the provisions of section 102 are held applicable, the respondents have not followed the requirements of the section. Reading that provision, by adapting it to the case of seizure of a bank account, the police officer should have done two things: he should have informed the concerned Magistrate forthwith regarding the prohibitory order. He should have also given notice of the seizure to the petitioner and allowed her to operate the bank account subject to her executing a bond undertaking to produce the amounts in court as and when required or to hold them subject to such orders as the court may make regarding the disposal of the same. This was not done. Even a copy of the prohibitory order was not given to the petitioner. The police did not seek the directions of the Magistrate trying the offence. Not only that, when the petitioner herself approached the Magistrate who was trying the petitioner's husband under the Official Secrets Act, her request to be allowed to operate the account was opposed by the police contending that the bank account was not “case property” and that the petitioner's remedies lay elsewhere than in the court of the Magistrate. The Magistrate accepted the plea of the police and dismissed the application of the petitioner and directed her to seek remedy elsewhere before the appropriate authority. The petitioner, having lost before the Magistrate, had no other recourse except to file a writ petition praying for the setting aside of the prohibitory order.
12. For the reasons abovementioned, we are of the opinion that the prohibitory order dated October 31, 1985, by reason of which the petitioner was prevented from operating the bank account in question should be quashed. We direct accordingly. In view of the order of this court dated May 4, 1986, we further direct respondents Nos. 1 to 3 to pay the petitioner interest at the rate of 18% per annum on the amount of the balance which stood to her credit on the date of the prohibitory order, namely, Rs. 42,770.14 from May 4, 1986, till the date of this order. Counsel for the petitioner states that he is also entitled to the cost of this petition. Having regard to the fact that the petitioner has been awarded interest during the pendency of the writ petition, we are of the opinion that we should make no orders as to costs.
13. The writ petition is disposed of accordingly. There will be no order as to costs.
Alert