Sanjay Kumar, C.J.:— Heard Mr. S. Niranjan, learned Additional Government Advocate, appearing for the appellants, and Mr. Ch. Ngongo, learned counsel for the respondent-writ petitioner.
2. Correctness and validity of the order dated 19.03.2020 passed by a learned Judge of this Court in W.P. (C) No. 902 of 2018 is called in question in this writ appeal. By the said order, the learned Judge allowed the writ petition in part, directing the State authorities and the State Bank of India to permit the writ petitioner to withdraw an amount not exceeding Rs. 50 lakh within a week from the date of receipt of the order but restrained the writ petitioner from withdrawing the balance amount after an amount not exceeding Rs. 50 lakh was withdrawn by him, without seeking the Court's leave. Aggrieved by the aforestated positive direction, the State of Manipur and its police authorities are in appeal before us.
3. By order dated 19.03.2021 passed in Misc. Case. (W.A.) No. 25 of 2021, this Court stayed the operation of the order under appeal till the next date of hearing. The order was extended thereafter from time to time.
4. Shorn of needless detail, the relevant facts:— The respondent-writ petitioner (for brevity, ‘the respondent’) is a registered Special Class Contractor of the Public Works Department, Government of Manipur. His bank account, bearing No. 00000020037793394, in the State Bank India at M.G. Avenue Branch, Imphal, was frozen in April, 2018, pursuant to the letter dated 06.04.2018 received by the Bank from the police stating that the account was suspected to be involved in criminal activities and requesting that it be frozen. Aggrieved by this action and claiming that no reason had been furnished therefor, the respondent filed the subject writ petition praying for a direction to the State authorities and the Bank to permit him to withdraw the amount in the frozen account.
5. The affidavit-in-opposition filed by the police authorities disclosed that Cheque No. 015388/20 dated 31.03.2018 for a sum of Rs. 76,55,531/- had been issued in favour of the respondent under Cheque Drawal Authority No. 33/161/2016-W dated 30.03.2018 but on 02.04.2018, the Finance Department (Expenditure Section) addressed a letter to the Principal Secretary (Works) stating that the said Cheque Drawal Authority was a forged/fake one. FIR No. 78(4) 2018 IPS was registered on 02.04.2018 under Sections 420, 468, 120B and 511 IPC along with Section 13(1) of the Prevention of Corruption Act, 1988, in relation thereto. On 03.04.2018, the Executive Engineer, Ukhrul Division, PWD, Manipur, requested the Branch Manager, State Bank of India, M.G. Avenue Branch, not to allow encashment of the said cheque. However, the respondent had deposited the cheque and the amount was credited to his account on 31.03.2018 itself. At that stage, the Additional Superintendent of Police (Law & Order), Imphal West, addressed letter dated 06.04.2018 to the Manager of the Bank, requesting him to freeze the account as it was suspected to be involved in criminal activities.
6. It was in this factual milieu that the learned Judge partly allowed the writ petition with directions. Perusal of the order reflects that the learned Judge was of the opinion that the police were not interested in completing the investigation, which had commenced as long back as in April, 2018, despite freezing the respondent's bank account, which was unfair and unreasonable as it affected his livelihood and he was denied use of the monies lying therein. The learned Judge observed that no notice had been given to him before the account was frozen and he did not even figure as an accused in the FIR. The learned Judge held the delay on the part of the police in completing the investigation against them and noted that no material had been produced to connect the respondent with the alleged offences. Opining that no prima facie case was made out against him and there was no reason to deny him the right of operating his account, the learned Judge permitted him to freely withdraw up to an amount not exceeding Rs. 50 lakh within a time frame and any amount in excess thereof, after seeking the leave of the Court.
7. Mr. S. Niranjan, learned Additional Government Advocate, would contend that the learned Judge erred in granting such relief to the respondent in exercise of writ jurisdiction overlooking the fact that an effective alternative remedy was available to him under the Code of Criminal Procedure, 1973. He would argue that the learned Judge ought not to have permitted withdrawal of a substantial amount of money, which was suspected to be involved in criminal activities, unconditionally and without security.
8. On the other hand, Mr. Ch. Ngongo, learned counsel, would contend that the very seizure and freezing of the bank account was illegal as it was not in keeping with due procedure inasmuch as the police had failed to abide by the mandatory provisions of Section 102 Cr. P.C. He would assert that the delay on the part of the police in reporting the seizure to the Court is fatal as Section 102 Cr.P.C. required such a report to be submitted forthwith. He would argue that the very seizure is liable to be invalidated on that short ground.
9. Both the learned counsel relied upon case law in support of their respective contentions.
10. Section 102 Cr.P.C. deals with the power of a police officer to seize certain property. Section 102(3), to the extent relevant, reads as under:—
‘102. Power of police officer to seize certain property -
(1) *** ***
(2) *** ***
(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……….’
11. The decision of the Supreme Court in State Of Maharashtra v. Tapas D. Neogy . [(1999) 7 SCC 685] puts it beyond doubt that a bank account constitutes ‘property’ for the purpose of seizure in terms of Section 102 Cr.P.C.
12. It is an admitted fact that by the letter dated 06.04.2018 addressed to the Bank, the police directed seizure of the respondent's bank account. Though Mr. Ch. Ngongo, learned counsel, had contended before the learned Judge also that the seizure of the bank account was not in accordance with the procedure laid down in Section 102 Cr.P.C., no finding was recorded in the order under appeal as to the validity of such seizure. Section 102(3) specifically requires that the police officer concerned should ‘forthwith’ report the seizure of the property to the jurisdictional Magistrate. Presently, the police did not report seizure of the respondent's bank account to the learned Sessions Judge, Imphal West, till 04.03.2020. The question is as to the impact of this delay on the said seizure.
13. In Keshav Nilkanth Joglekar v. The Commissioner of Police, Greater Bombay [AIR 1957 SC 28], a Constitution Bench dealt with the connotation of the term ‘forthwith’ and held that it would only mean that the act should be performed with reasonable speed and expedition and that any delay in the matter should be satisfactorily explained. No explanation has been offered, as yet, by the police for the long delay in reporting the seizure of the respondent's bank account to the learned Sessions Judge, Imphal West.
14. More significantly, in State Of Punjab v. Balbir Singh . [(1994) 3 SCC 299], dealing with the contention that failure to comply with the provisions of the Code of Criminal Procedure, 1973, in respect of search and seizure would vitiate the trial, the Supreme Court held that violation of the provisions of Section 102 Cr.P.C., amongst others, would not per se vitiate the prosecution's case. It was further held that, if there is such violation, what the Court has to see is whether any prejudice was caused to the accused and while appreciating the evidence and other relevant factors, the Court should bear in mind that there was such a violation and from that point of view evaluate the evidence on record.
15. In the case on hand, the respondent does not figure as an accused in FIR No. 78(4) 2018 IPS even as on date. However, he was well aware of the fact that his bank account had been frozen in relation thereto on 07.04.2018 itself, as is evidenced by his legal notice dated 25.06.2018 addressed to the Bank. Given his knowledge of such seizure, the issue is whether he suffered any prejudice due to the violation of the prescribed procedure by the police.
16. It is in this context that the provisions of Sections 451 and 457 Cr.P.C. assume importance. Section 451 Cr.P.C. deals with the order of custody and disposal of property pending trial in certain cases. It provides that when any property is produced before a Criminal Court during an inquiry or trial, the Court may make such order as it thinks fit for the proper custody of such property pending conclusion of the inquiry or trial. Section 457(1) Cr.P.C. states that when the seizure of property by a police officer is reported to a Magistrate but such property is not produced before the Court during an inquiry or trial, the Magistrate may make such order as he thinks fit respecting the disposal of such property or delivery of such property to the person entitled to the possession thereof. Section 457(2) Cr.P.C. provides that if the person so entitled is known, the Magistrate may order the property to be delivered to him on such conditions as he thinks fit.
17. The respondent was therefore provided an effective remedy under the provisions of the Code of Criminal Procedure, 1973, with regard to the seizure of his bank account. He was fully aware that freezing of his bank account was in relation to alleged criminal offences, the subject matter of FIR No. 78(4) 2018 IPS registered under Sections 420, 468, 120B and 511 IPC & Section 13(1) of the Prevention of Corruption Act, 1988. He could, therefore, have immediately approached the competent Criminal Court under the provisions of the Code of Criminal Procedure, 1973. Thus, no apparent prejudice was directly caused to him by the inaction of the police in promptly following the statutory procedure.
18. That apart, such procedural violation, by itself, would not be reason enough to permit the respondent to withdraw nearly 2/3 of the amount lying in his bank account. Pertinent to note, out of the sum of Rs. 76,59,151.54 lying to his credit in the account as on 07.04.2018, a sum of Rs. 76,55,531/- was attributable to the cheque received by him under the alleged forged/fake Cheque Drawal Authority.
19. Be it noted that the FIR, in relation to which seizure of the bank account was made, refers to not only offences under the Penal Code, 1860 but also the Prevention of Corruption Act, 1988. In Tapas D. Neogy (supra), it was pointed out by the Supreme Court that corruption in public offices has become so rampant that it has become very difficult to cope with the same and the time consumed by Courts in concluding trials is a factor which should be borne in mind while interpreting Section 102 Cr.P.C. and the underlying object engrafted therein, inasmuch as if there can be no order of seizure of the bank account of the accused, then the entire money deposited in the said account, which may ultimately be held to be the outcome of illegal gratification, could be withdrawn by the accused and the Courts would be powerless to get the said money which had a direct link with the commission of the offence by the accused, a public officer.
20. In the case on hand, the respondent appears to be the beneficiary of the alleged criminal act of forgery of a Cheque Drawal Authority, whereunder a cheque for a substantial sum of money was issued to him. Therefore, the amount covered by the said cheque would constitute the fruits of a crime, if established. Even if the respondent is not an accused in the FIR as on date, it would not entitle him to merrily enjoy the proceeds of possible criminal activity.
21. In B. Ranganathan v. State [2003 Cri LJ 2779], a learned Judge of the Madras High Court had observed that a police officer seizing a bank account should inform the concerned Magistrate forthwith and also give notice of such seizure to the accused. The learned Judge further held that an order under Section 102 Cr.P.C., without doing so, would be liable to be set aside. This principle was followed by another learned Judge of the Madras High Court in Padmini v. Inspector of Police, Tirunelveli [(2008) 3 Crimes 716 (Mad)].
22. However, a learned Judge of the Telangana High Court held otherwise in Ap Product v. State Of Telangana [(2021) 1 ALD (Cri) 286]. The learned Judge was dealing with cases involving seizure of bank accounts under Section 102 Cr.P.C. where there was delay in the same being reported to the jurisdictional Criminal Court. However, the delay was far lesser than the delay in the case on hand. The learned Judge noted that de-freezing of the bank accounts could result in swindling of monies causing frustration of the investigation and observed that when the Court is confronted with a claim for de-freezing of a bank account on the ground of delay in reporting the same to the Magistrate as against the suspected diversion of money directly attributable to a crime, the Court must lean in favour of allowing the police to continue with the investigation and not interfere with the decision to seize the bank account. Reference was made to the Division Bench judgment of the erstwhile Andhra Pradesh High Court in Mohd. Maqbool Ahmed @ Mateen v. The Deputy Commissioner of Police, Special Investigation Team, Hyderabad [(1996) 3 ALT 215 (DB)], wherein it was held that even assuming there was non-compliance with the requirements of Section 102(3) Cr.P.C. inasmuch as the police officer had not informed the jurisdictional Magistrate about the seizure of the bank account, the same would not invalidate the order of seizure and it would always be open to the person aggrieved to move the Criminal Court for appropriate orders.
23. In any event, the dicta of the Madras High Court are contrary to the binding ratio laid down by the Supreme Court in Balbir Singh (supra). Further, the scheme of Section 102 Cr.P.C. does not support the plea that notice of the seizure of his bank account had to be given to the respondent. The statutory provision only requires report of such seizure being given to the superior police officer, if warranted, and to the jurisdictional Magistrate. In Union of India v. W.N. Chadha [1993 Supp (4) SCC 260], the Supreme Court pointed out that, save under certain exceptions in the entire scheme of the Code, even the accused has no participation as a matter of right during the course of investigation. We, therefore, respectfully disagree with the view of the Madras High Court to the contrary.
24. Section 102(3) Cr.P.C. requires reporting of such seizure to be made to the jurisdictional Criminal Court for the purpose of maintaining the record and for transparency. No direct injury may be caused to the person whose account has been seized by such delay in the reporting of the seizure. That is the reason why the Constitution Bench in Keshav Nilkanth Joglekar (supra) stated that the term ‘forthwith’ only requires that the act should be performed with reasonable speed and any delay in the matter should be satisfactorily explained. Further, in Balbir Singh (supra), the edict of the Supreme Court was that such a violation would not invalidate the prosecution's case per se and the prejudice, if any, caused thereby would have to be assessed. As the learned Sessions Judge, Imphal West, has now been informed of the seizure of the respondent's bank account, it is for the police to explain the delay on their part to the learned Sessions Judge so that this aspect may be looked into. As the competent Criminal Court is now seized of the matter, it would also be open to the respondent to seek appropriate relief from the said Court under the provisions of the Code of Criminal Procedure, 1973. At this stage, permitting him to unconditionally withdraw the substantial sum of Rs. 50 lakh would not be in the interest of justice as practically the entire amount lying in the seized bank account is directly attributable to the cheque connected to the alleged forged Cheque Drawal Authority. It would also be contrary to the caution sounded by the Supreme Court in Tapas D. Neogy (supra) as to the Court's helplessness in recovering such monies later.
25. We accordingly set aside the order of the learned Judge. However, we leave it open to the police and the respondent to go before the competent Criminal Court and seek appropriate orders, both in the context of the delayed reporting of seizure of the bank account as well as withdrawal of any amount therefrom on conditions, if warranted. It is made clear that the observations made on merits in the body of this order are only meant for the limited purpose of disposing of this case and the same shall not influence or be binding upon the competent Criminal Court while independently dealing with the matter.
26. The writ appeal is allowed.
27. No further orders are required to be passed in M.C.(W.A) No. 25 of 2021, which is accordingly closed.
28. In the circumstances, there shall be no order as to costs.