Madras High Court
Yasar Arabath vs Mohamed Saleem ... 1St on 21 June, 2023
Crl.R.C.(MD)No.515 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 14.06.2023
PRONOUNCED ON : 21.06.2023
CORAM
THE HONOURABLE MR.JUSTICE K.MURALI SHANKAR
Crl.R.C.(MD)No.515 of 2023
and
Crl.M.P.(MD)Nos.7426 and 7762 of 2023
Yasar Arabath ... Petitioner/2nd Respondent
Vs.
1.Mohamed Saleem ... 1st Respondent/ Petitioner
2. State represented by
the Inspector of Police,
District Crime Branch,
Dindigul.
(In Crime No.13 of 2023) ... 2nd Respondent/1st Respondent
PRAYER: Criminal Revision Petition has been filed under Section 397
r/w 401 of the Code of Criminal Procedure, to call for the records
of the impugned order dated 05.04.2023 pronounced on 05.05.2023 in
Crl.M.P.No.9018 of 2013 passed by the learned Judicial Magistrate
No.II, Dindigul and set aside the same.
For Petitioner : Mr.A.V.Arun
For Respondents : Mr.John Sathyan
Senior Counsel
for Mr.F.Deepak for R.1
: Mr.SS.Madhavan
Government Advocate (Crl.Side)
For R2
ORDER
This Criminal Revision is directed against the order passed in Crl.M.P.No.9018 of 2023, dated 05.04.2023, on the file of the Judicial Magistrate Court No.II, Dindigul, in allowing the petition filed under Section 102 r/w 457 Cr.P.C.
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2. On the basis of the complaint lodged by the petitioner, F.I.R. came to be registered in Cr.No.13 of 2023, on the file of the second respondent, dated 20.04.2023 against three persons including the first respondent/first accused for the alleged offences under Sections 406, 420, 120(b) and 506(i) I.P.C. Admittedly, the first accused and his wife – second accused are running a company in the name and style of M/s Bnazrum Agro Exports Private Limited, that the revision petitioner/the defacto complainant is none other than the son-in-law of the accused 1 and 2 and that the third accused is the General Manager of the said Company.
3. The case of the prosecution is that during 2018, the said Company was running in loss, that the accused 1 and 2 approached the defacto complainant and obtained a sum of Rs.6 Crores on the assurance that they will register the company and its properties in his name, that the parties entered into an agreement on 19.09.2022 to sell the company for a total sum of Rs.40 Crores and out of which, the defacto complainant had to make a payment of Rs.16.5 Crores to the accused 1 and 2 and the balance amount of Rs.23.5 Crores will be paid to the Union Bank for closing the existing loan amount, that as per the said agreement, the accused have received a sum of Rs.6 Crores on 19.09.2022 and subsequently Rs.4.50 Crores and executed a share purchase agreement in favour of the defacto complainant, that a Board resolution was also passed appointing the defacto complainant as a Director of the Company, but the same were not filed before the Registrar of Companies stating that the Bank is not providing No Objection Certificate and they have also received a sum of Rs.2.11 Crores for the same, that the accused have also received another sum of Rs.3 Crores on various dates and thereafter informed the Bank authorities not to provide No Objection Certificate, that a panchayat was convened between the family members and the accused agreed to pay the total sum of Rs.25 Crores for settling the issues and that the accused have been refusing to sell the properties or to return back the agreed amount, but diverted a sum of Rs.1.25 Crores to their personal accounts and that therefore, on the basis of the compliant lodged by the revision petitioner/the defacto complainant, the present F.I.R., came to be registered.
4. It is evident from the records that the second respondent police has freezed all the five Bank accounts of the said Company and a communication was sent to the Bank authorities in that regard. The first accused, by alleging that due to the freezing of the Bank accounts, the Company has become stand still and the day-today affairs of the Company has been severely affected, that the same would directly affect more than 200 families of the employees and affect the agricultural livelihood of more 10,000/- farmers doing agricultural activities in more than 6,000 acres of agricultural land every year and that the very freezing of the bank accounts is illegal, has filed a petition under Section 102 r/w 457 Cr.P.C., to de-freeze all the five bank accounts of the first accused Company https://www.mhc.tn.gov.in/judis 2/9 Crl.R.C.(MD)No.515 of 2023 and to permit the first accused to execute a bond as provided under Section 102 Cr.P.C., and the same was taken on file in Crl.M.P.No. 9018 of 2023, on the file of the Judicial Magistrate No.II, Dindigul.
5. The revision petitioner herein / the defacto complainant has filed an impleading petition for impleading him in the above petition raising serious objections to de-freeze the accounts. The second respondent has also filed a counter statement raising objections. The learned Judicial Magistrate, after enquiry, has passed the impugned order dated 05.04.2023 de-freezing the five accounts in Union Bank of India, UMFB branch, Coimbatore and permit the first accused to operate the accounts and further directed the first accused to execute a bond for Rs.25 Crores under Section 102 Cr.P.C. Aggrieved by the said impugned order, the defacto complainant has preferred the present Criminal Revision Case.
6. The learned Counsel for the revision petitioner would submit that the learned Magistrate has failed to appreciate the allegation of cheating and the criminal breach of trust which are serious in nature and only to recover the properties of the accused, the second respondent police initiated the action of freezing of accounts on good faith, that though there is a delay in reporting the Judicial Magistrate about the action taken under Section 102(1) Cr.P.C., it is a curable defect and the same will not vitiate the action taken by the respondent police, that the accused would have taken all the amounts from the accounts, if such swift action was not taken by the second respondent, that any police officer may seize the properties even on suspicious of the commission of any offence under Section 102(1) Cr.P.C., and that since the moment the complaint has been started to be enquired, it shall be presumed that the Investigating Officer had commenced his investigation, in which irrespective of the fact that the F.I.R., had been registered or not, such enquiry embarked upon by him would come within the connotation of the enquiry as stated by the Hon'ble Supreme Court in Lalitha Kumari's case. He would further submit that the amount involved is very huge and even a single day would be sufficient enough for the accused to withdraw the amount available and hence, there is a clear case of imminent urgency for holding all the accounts intact, so that an uninterrupted investigation can go on.
7. The learned Counsel for the first respondent/first accused would submit that the respondent police without registration of F.I.R., have illegally directed the Bank to freeze the bank accounts, that neither notice was issued nor were the Directors of the Company were enquired before taking the drastic step of freezing the bank accounts, that the second respondent, after freezing the bank accounts on 18.04.2023, they have registered the case in Cr.No. 13 of 2023 on 20.04.2023, that the respondent police without providing any opportunity for execution of bonds as contemplated https://www.mhc.tn.gov.in/judis 3/9 Crl.R.C.(MD)No.515 of 2023 under Section 102 Cr.P.C., has with malafide intention, directed the Bank of the Company to freeze all the five bank accounts and that since the bank accounts were freezed even before the registration of the case and the jurisdictional Magistrate was not informed about the freezing of accounts, as contemplated under Section 102 Cr.P.C, the very freezing of accounts is illegal. The learned Counsel would further submit that the learned Magistrate, after considering the factual aspects and also the legal position, has rightly allowed the petition and thereby de-freezed the bank accounts.
8. The learned Counsel for the revision petitioner has relied on the judgment of the Hon'ble Supreme Court in State of Maharashtra Vs. Tapas D.Neogy reported in (1999)7 Supreme Court Cases 685. In the said case, the Hon'ble Supreme Court, taking note of the divergent views taken by the different High Courts with regard to the power of seizure under Section 102 Cr.P.C., and whether the bank account can be held to be “property” within the meaning of the said Section 102(1) Cr.P.C., has specifically held that the bank account of the accused or any of his relation is “property” within the meaning of Section 102 of the Criminal Procedure Code and a police officer in course of investigation can seize or prohibit the operation of the said account if such assets have direct links with the commission of the offence for which the police officer is investigating into.
9. The learned Counsel for the first respondent/first accused has relied on the following decisions of the Hon'ble Supreme Court:
(I) Teesta Atul Setalvad Vs. State of Gujarat – (2018) 2 SCC 372 :
25. Suffice it to observe that as the Investigating Officer was in possession of materials pointing out circumstances which create suspicion of the commission of an offence, in particular, the one under investigation and he having exercised powers under Section 102 of the Code, which he could, in law, therefore, could legitimately seize the bank accounts of the appellants after following the procedure prescribed in sub-Section (2) and sub-Section (3) of the same provision. As aforementioned, the Investigating Officer after issuing instructions to seize the stated bank accounts of the appellants submitted report to the Magistrate concerned and thus complied with the requirement of sub-Section (3).
(ii). Opto Circuit India Limited Vs. Axis Bank and others – (2021)6 SCC 707.
“ 11. Mr. S.V. Raju, learned Additional Solicitor General made a subtle attempt to contend that the power of seizure is available under Section 102 of the Code of Criminal Procedure, which has been exercised and as such the freezing of the account would remain valid. We are unable to appreciate and accept such contention for more https://www.mhc.tn.gov.in/judis 4/9 Crl.R.C.(MD)No.515 of 2023 than one reason. Firstly, as noted, it has been the contention of Respondent No.4 that PMLA is a stand alone enactment. If that be so and when such enactment contains a provision for seizure which includes freezing, the power available therein is to be exercised and the procedure contemplated therein is to be complied. Secondly, when the power is available under the special enactment, the question of resorting to the power under the general law does not arise. Thirdly, the power under Section 102 CrPC is to the Police Officer during the course of investigation and the scheme of the provision is different from the scheme under PMLA. Further, even subsection (3) to Section 102 CrPC requires that the Police Officer shall forthwith report the seizure to the Magistrate having jurisdiction, the compliance of which is also not shown if the said provision was in fact invoked. That apart, the impugned communication dated 15.05.2020 does not refer to the power being exercised under the Code of Criminal Procedure.
14. This Court has time and again emphasised that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner alone andin no other manner. Among others, in a matter relating to the presentation of an Election Petition, as per the procedure prescribed under the Patna High Court Rules, this Court had an occasion to consider the Rules to find out as to what would be a valid presentation of an Election Petition in the case of Chandra Kishor Jha vs. Mahavir Prasad and Ors. (1999) 8 SCC 266 and in the course of consideration observed as hereunder:
“It is a well settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner”.
Therefore, if the salutary principle is kept in perspective, in the instant case, though the Authorised Officer is vested with sufficient power; such power is circumscribed by a procedure laid down under the statute. As such the power is to be exercised in that manner alone, failing which it would fall foul of the requirement of complying due process under law. We have found fault with the Authorised Officer and declared the action bad only in so far as not following the legal requirement before and after freezing the account. This shall not be construed as an opinion expressed on the merit of the allegation or any other aspect relating to the matter and the action initiated against the appellant and its Directors which is a matter to be taken note in appropriate proceedings if at all any issue is raised by the aggrieved party.” https://www.mhc.tn.gov.in/judis 5/9 Crl.R.C.(MD)No.515 of 2023
10. The learned Counsel for the first accused has relied on the decision of this Court in Mrs.B.Kavitha Vs. the Inspector of Police, K-4, Anna Nagar Police Station, Chennai and another in Crl.O.P.No. 14824 of 2019 in a similar matter, wherein the learned Judge of this Court held that freezing of bank account without notice to the accused person and without submitting the report before the Magistrate immediately, the same would amount to violation of mandatory provisions prescribed under Section 102 Cr.P.C., and the action of the police tantamount to the infringement with the fundamental right of the accused under Article 21 of the Constitution of India and the relevant passages are extracted hereunder:
“6. It is an unfortunate case where the 1st respondent has completely misused his power. Freezing of bank account has to be undertaken only in rare cases and that to in strict compliance with the mandatory procedure under section 102 of the Cr.P.C., 1973 Time and again this Court has held that if a bank account is freezed without notice to the accused persons and without submitting a report before the Magistrate immediately, the same amounts to violation of the mandatory procedure prescribed under section 102 of Cr.P.C., 1973
7. In this case even without registering an FIR, the 1st respondent has proceeded to freeze the bank accounts of the petitioner. This shows the hastiness with which the 1st respondent has acted in this case and in the considered view of this Court, he has misused his power and has shown literally a favour for the complainant by illegally directing the 2nd and 3rd respondent banks to freeze the bank accounts of the petitioner. The action of the 1st respondent tantamount to the infringement with the fundamental right of the petitioner under Article 21 of the Constitution of India. The petitioner who was maintaining bank account in the 2nd and 3rd respondent banks and was also repaying the loan amount through the said bank accounts, had the shock of her life when she was informed that her bank accounts has been frozen pursuant the letter given by the 1st respondent.”
11. The learned Counsel for the revision petitioner would contend that once a complaint has been started to be enquired, the same shall be presumed that the Investigating Officer had commenced his investigation and the subsequent registration of the F.I.R., would not have the effect of nullifying the enquiry or the investigation done prior to the registration of the case.
12. F.I.R. sets the criminal law in motion. Any person can lodge the F.I.R., under Section 154 Cr.P.C. Section 154 Cr.P.C., states that https://www.mhc.tn.gov.in/judis the officer in charge of the police station shall record 6/9 Crl.R.C.(MD)No.515 of 2023 the information of cognizable offence as F.I.R. When the information discloses cognizable offence, then the police authority is duty bound to register the F.I.R., and to proceed with the investigation.
Sections 154 and 157 Cr.P.C., regulate the power of investigation. A cursory perusal of the above provisions would make it clear that the investigation without registration of F.I.R., is impermissible as the F.I.R., is sine-quo non for the commencement of the investigation. In case, if the information received does not disclose the commission of cognizable offence, then a preliminary enquiry has to be conducted and that too for the limited purpose of ascertaining as to whether any cognizable offence is disclosed.
13. The Hon'ble Apex Court in Samaj Parivartana Samudaya and Others Vs State Of Karnataka and Others reported in (2012)7 SCC 407, has specifically held that the registration of the case upon information received is mandatory before proceeding to take up the investigation. In Lalithakumari's case, the Hon'ble Apex Court has held that the police must investigate the crime if the information discloses cognizable offence and if the police is not sure as to whether any cognizable offence is disclosed, then they are at liberty to conduct a preliminary enquiry.
14. Considering the above, the legal position is very clear that the police officer cannot investigate a crime, without recording the F.I.R., as the F.I.R., is the corner-stone of the criminal proceedings. In the case on hand, as already pointed out, F.I.R., came to be registered only on 20.04.2023, but the second respondent has sent the communication to the Bank authorities to freeze the accounts on 18.04.2023. When the case itself was registered on 20.04.2023, this Court is at lost to understand as to how the investigation was undertaken and the bank accounts were ordered to be freezed during the alleged investigation. It is not in dispute that though the bank accounts were freezed on 18.04.2023, the same was not intimated to the jurisdictional Magistrate immediately as contemplated under Section 102 Cr.P.C.
15. It is evident from the impugned order that the petition under Section 102 r/w 457 Cr.P.C., came to be filed by the first accused on 25.04.2023 before the jurisdictional Court, that since the F.I.R., was not at all received by the Court, the said petition was ordered to be returned and that subsequently the F.I.R., dated 20.04.2023 in Cr.No.13 of 2023 came to be received by the jurisdictional Court only on 26.04.2023. The learned Magistrate has specifically observed that freezing of the accounts was intimated to the Court only on 02.05.2023, after the lapse of 13 days. It is pertinent to note that originally, the complaint was lodged with the Superintendent of Police, Dindigul District and the said compliant was forwarded to the Inspector of Police, DCB, Dindigul for necessary action and report, but the Sub-Inspector of Police, on the basis of the current paper received from the Superintendent of Police, registered the case on 20.04.2023.
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16. Considering the above, the action of the respondent police in freezing the bank accounts even before the registration of the case and the non-submission of the immediate report to the jurisdictional Magistrate would amount to the violation of the mandatory procedure contemplated under Section 102 Cr.P.C., and as such, the same is illegal. In Kavitha's case referred above, the learned Judge of this Court has imposed costs on the Inspector of Police for his illegal action and in order to ensure that the said mistake is not committed by any of the Investigating Officer in future. In the case on hand also, the second respondent police has acted in hasty manner in freezing the accounts before registering the case, but thereafter remained silent and sent the mandatory report to the jurisdictional Court as contemplated under Section 102 Cr.P.C., belatedly. As rightly observed by the learned Judge, the action of the police authorities tantamount to the infringement with the fundamental right of the accused under Article 21 of the Constitution of India. Hence, this Court has no hesitation to hold that the impugned order passed by the learned Magistrate in de- freezing the bank accounts is perfectly valid in law and the same cannot be found fault with. Hence, this Court concludes that the Criminal Revision Case is absolutely devoid of merits and the same is liable to be dismissed. Despite the imposition of cost in Kavitha's case, nothing has been changed. Considering the illegality committed, this Court has no other go, but to impose cost on the second respondent.
17. In the result, the Criminal Revision Case is dismissed. Consequently, the connected Miscellaneous Petitions are also dismissed. The second respondent is directed to pay a cost of Rs. 5,000/-(Rupees Five Thousand only) to the Legal Services Authority attached to this Bench within a period of one week from the date of receipt of a copy of this order.
18. Post the matter on 07.07.2023 for reporting compliance.
Sd/-
Assistant Registrar(AE) // True Copy // 06/07/2023 Sub Assistant Registrar(CS) SSL To
1. The Judicial Magistrate No.II, Dindigul.
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2. The Inspector of Police, District Crime Branch, Dindigul.
3.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai.
4 THE SECRETARY, LEGAL AID SERVICES AUTHORITY, MADURAI BENCH OF MADRAS HIGH COURT, MADURAI.
COPY TO:
THE SECTION OFFICER, CRIMINAL RECORDS, MADURAI BENCH OF MADRAS HIGH COURT, MADURAI. (2 Copies) +1 CC to M/s.A.V.ARUN, Advocate ( SR-29545[F] dated 21/06/2023 ) +1 CC to M/s.F.DEEPAK, Advocate ( SR-29662[F] dated 22/06/2023 ) Crl.R.C.(MD)No.515 of 2023 and Crl.M.P.(MD)Nos.7426 and 7762 of 2023 21.06.2023 MK/06.07.2023 9P 9C https://www.mhc.tn.gov.in/judis 9/9