Karnataka High Court
Sri A Suresh vs The State Of Karnataka on 31 January, 2024
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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WP No. 27312 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 27312 OF 2023 (GM-RES)
BETWEEN:
SRI. A. SURESH,
S/O LATE ASHWATHANARAYANA,
AGED ABOUT 53 YEARS,
R/AT NO.17, 1st MAIN,
KASTURIBA NAGARA,
MYSORE ROAD,
BENGALURU - 560 026.
...PETITIONER
(BY SMT. LAKSHMY IYENGAR, SENIOR ADVOCATE A/W
SRI. NATARAJU T., ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
Digitally signed REPRESENTED BY ITS PRINCIPAL SECRETARY,
by NAGAVENI DEPARTMENT OF HOME,
Location: HIGH VIDHANA SOUDHA,
COURT OF
KARNATAKA BENGALURU - 560 001.
2. THE STATION HOUSE OFFICER,
SHESHADRIPURAM POLICE STATION,
SHESHADRIPURAM,
BENGALURU - 560 020.
3. THE DEPUTY INSPECTOR GENERAL OF
REGISTRATION,
(ADMINISTRATION AND LAW)
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WP No. 27312 of 2023
KANDAYA BHAVAN, 8TH FLOOR,
KEMPEGOWDA ROAD,
BENGALURU - 560 020.
...RESPONDENTS
(BY SMT. NAVYA SHEKHAR, AGA)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED POLICE NOTICE DATED 29/07/2021 ISSUED UNDER
SECTION 91 OF CR.P.C. BY THE R2 VIDE ANNEXURE-K IN
RESPECT OF THE SITE NO. 1112 IN J.P. NAGARA 2ND BLOCK,
8TH PHASE (SY. NO. 15/1A KOTHANURU) MEASURING 6.10 X
9.14 METER BELONGING TO THE PETITIONER AND THE
CONSEQUENTIAL ORDER DATED 31/11/2021 NO. RGN/380/21-
22 PASSED BY THE R3 VIDE ANNEXURE-L AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner is before this Court calling in question a notice dated 29.07.2021 issued by respondent No.2 invoking Section 91 of the Cr.P.C.
2. Heard Smt. Lakshmy Iyengar, learned Senior counsel appearing for the petitioner, Smt. Navya Shekhar, learned AGA appearing for the respondents and have perused the material on record.
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3. Facts in brief germane are as follows:
The Bangalore Development Authority ('BDA' for short) had allotted a vacant site bearing No.1112 in J.P. Nagara 2nd Block, 8th Phase (Sy.No.15/1A Kothanuru) measuring 6.10 x 9.14 meter. The original allottee had sold the same in favour of the petitioner by way of a registered Sale Deed on 19.12.2018, pursuant to which, khata is transferred in favour of the petitioner. The issue in the lis is not with regard to allotment, transfer or otherwise.
4. The petitioner, as observed hereinabove, is the subsequent purchaser from the hands of the vendor Bhagyamma.C.N. Certain proceedings are instituted against the petitioner's vendor alleging that the name of the vendor of the petitioner did not appear as one of the allottees by the BDA. This forms the content of a complaint made before the jurisdictional police, who after investigation file the charge sheet which is pending in C.C.No.22732 of 2022. Petitioner is not the accused at the stage of crime or when the police filed the charge sheet.
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5. What has driven the petitioner to this Court is a notice issued on 29.07.2021 invoking Section 91 of the Cr.P.C.
The notice directs the Sub-Registrar not to register any of the properties of the petitioner or the properties that were allotted to the original allotee - vendor of the petitioner. One such property forms the subject matter of the present lis.
6. Learned Senior counsel appearing for the petitioner, Smt. Lakshmy Iyengar would submit that the power under Section 91 of the Cr.P.C. cannot be used by the jurisdictional police to direct the Sub-Registrar not to register any document of the petitioner or of the vendor. The learned senior counsel would submit that the issue as to whether Section 91 of the Cr.P.C. can be made use of for this purpose is covered by plethora of judgments rendered by this Court.
7. On the other hand, the learned High Court Government Pleader would seek to defend the action on the ground that the charge sheet is filed against the vendor of the petitioner. Therefore, it is presumed that the proceeds of crime have gone into the account of the petitioner and therefore, those properties which form the subject matter of crime, -5- NC: 2024:KHC:4339 WP No. 27312 of 2023 cannot be permitted to be registered. He would seek dismissal of the petition.
8. I have given my anxious consideration to the submissions made by the learned Senior Counsel and other respective learned counsel and have perused the material on record.
9. The issue lies in a narrow compass. It is as to whether, Section 91 of the Cr.P.C. can be used by the police to direct the Sub-Registrar to register some properties and not to.
Section 91 of the Cr.P.C. reads as follows:
"91. Summons to produce document or other thing.-- (1) Whenever any Court or any officer-in-charge of a police station considers that the production of any document or other thing is necessary or desirable for the purposes of any investigation, inquiry, trial or other proceeding under this Code by or before such Court or officer, such Court may issue a summons, or such officer a written order, to the person in whose possession or power such document or thing is believed to be, requiring him to attend and produce it, or to produce it, at the time and place stated in the summons or order. (2) Any person required under this section merely to produce a document or other thing shall be deemed to have complied with the requisition if he causes such document or thing to be produced instead of attending personally to produce the same.
(3) Nothing in this section shall be deemed--
(a) to affect Sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), or the -6- NC: 2024:KHC:4339 WP No. 27312 of 2023 Bankers' Books Evidence Act, 1891 (13 of 1891), or
(b) to apply to a letter, postcard, telegram or other document or any parcel or thing in the custody of the postal or telegraph authority."
Section 91 of the Cr.P.C. nowhere empowers the police to direct the Sub-Registrar to act in any particular manner.
Whether power under Section 91 of the Cr.P.C. can be used for these purposes, need not detain this Court for long or delve deep into the matter. This Court, concerning freezement of the accounts in W.P.No.4037/2023 disposed on 22.06.2023, has held as follows:
"8. The learned High Court Government Pleader has produced certain communications by which the account frozen. The communications read as follows:
"To.
The Manager UNION BANK DOMMALUR BRANCH, BANGALORE Sir, Sub: Request to provide the Ac no 510101003194042 & 510331001272656 Bank Details and Debit freeze the account. Ref: sarjapura Police Station, CRNO 278/2022 U/S 420-504-506 IPC With reference to the above subject and reference, We have been investigating a case in our police station. For the investigation purpose Kindly Debit freeze the -7- NC: 2024:KHC:4339 WP No. 27312 of 2023 below mentioned Account Number and provide the below mentioned details.
1. KYC details
2. Provide account balance statement of account from opening ti till date
3. other details.
Sl no Ac no - 510101003194042 Ac no - 510331001272656 Thanking You.
Investigation Officer, Sd/-
INSPECTOR OF POLICE Sarjapura Police Station Bengaluru District Division"
..................xxxxx..................
"To, The Director/s SREE GOWRI GANESHAA CHITS PRIVATE LIMITED, 307 1ST FLOOR 2ND MAIN, 7TH CROSS DOMLUR LAYOUT BANGALORE, KARNATAKA - 560071 Subject:- NOTICE U/S 90 CrPC, Ref:-Sarjapura Police Station, CRNO 278/2022 U/S 420-504-506-IPC With reference to the above subject and reference, we are debit freezing your account no- 51010003194042 and A/c - 510331001272656 This is for your information Regards, Dared:-17/01/2023 Sd/-
Branch Manager UBI Domlur - 06362"
.................xxxx.................
"To, The Director/s -8- NC: 2024:KHC:4339 WP No. 27312 of 2023 SREE GOWRI GANESHAA CHITS PRIVATE LIMITED 307,1ST FLOOR, 2ND MAIN, 7TH CROSS DOMLUR LAYOUT BANGALORE, KARNATAKA-560071 Subject:- NOTICE U/S 90 CrPC, Ref:-Sarjapura Police Station, CRNO 278/2022 U/S 420-504-506- IPC With reference to the above subject and reference, we are debit freezing your account no-51010003194042 and A/c-510331001272656 This is for your information Regards, Dated:-17/01/2023 Sd/-
Branch Manager UBI Domlur-06362"
The afore-quoted communications are the ones that have led to the impugned action. The notice for debit freezment is made under Section 92 of CR.P.C. It is now by well settled principle of law that a account freezment order/ directions cannot be made by the Investigating Officer invoking his power under Sections 91 and 92 of Cr.P.C. On this solitary ground, the direction for debit freezment is rendered unsustainable.
9. The issue need not detain this Court for long or delve deep into the matter, in the light of the judgment rendered by the Delhi High Court in the case of V PLUS TECHNOLOGY PVT. LTD., V. STATE (NCT OF DELHI)1 wherein the learned Judge has held as follows:
"10. I have heard arguments and gone through the records. It is an admitted case that u/s 91 Cr.P.C, the order of debit freeze could not have been passed. Mr. Kundu is also correct in stating that it was a procedural lapse on the part of the investigating agency to nomenclature the notice u/s 91 because the prosecuting agency has the power to debit freeze an account even though not u/s 91 Cr.P.C. but u/s 102 Cr.P.C.
12022 SCC Online Del 1223 -9- NC: 2024:KHC:4339 WP No. 27312 of 2023
11. As far as the compliance of 102(3) is concerned, I am of the view that there has been a delay in compliance of the provision and the magistrate was informed only after more than 2 months of the order of the debit freeze. Section 102(3) reads as under:
"Section 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, he may give custody thereof to any person on his executing a bond."
12. I am unable to subscribe to the contention of Mr. Kundu that the delay in compliance of Section 102(3) is not fatal to the case of the prosecution. In the present case, the delay of more than two months to inform the magistrate is neither explained nor justified by the respondent. In Manish Khandelwal v. State of Maharashtra, the Bombay High Court held that non-compliance of the procedure laid down u/s 102 Cr.P.C. is not only an irregularity but it is a mandatory provision and if not followed, it will entail the consequence of giving directions to de-freeze the bank account. In Muktaben (Supra) the above legal position was observed as follows:
"33. Recently, in the case of Manish Khandelwal v. State of Maharashtra, 2019 SCC OnLine Bom 1412, decided on 30.07.2019, the Court rejected the contention that non-compliance of the procedure laid down under Section 102 Cr.P.C. is only an irregularity and will not vitiate freezing of the bank accounts. It was held that in case the mandatory provision under Section 102 Cr.P.C. has not been followed then it would entail the consequence of giving directions to defreeze the bank account. The duty of reporting to Magistrate any seizure of bank account is case upon the IO as freezing of the bank account prevents the person from operating the bank account pursuant to investigation. If there is any violation in following the procedures under Section 102 Cr. P.C., freezing of account cannot be legally sustained.
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36. Now reverting back to the present petition, taking into consideration the oral as well as the written submissions of both the parties and also taking into consideration the material on record as well as the legal position, more specifically in view of the judgments discussed hereinabove, this Court has no hesitation to hold that the reporting of the freezing of bank accounts is "mandatory". Failure to do so, apart from other conditions, will vitiate the freezing of bank account, which should be 'forthwith' requirement goes to the root of the matter. If there is any violation in following the procedures under Section 102 of the Cr.P.C, the freezing of the bank accounts cannot be legally sustained."
13. I am of the view that in the present case there has been a delay of reporting of freezing of the account to the magistrate. However, in the fact of the present case the course adopted in Muktaben (supra) i.e. directing the petitioner to execute bonds before the Trial Court undertaking to produce amount in Court as and when required by the Court is the correct course to follow.
14. Accordingly, it is directed that the order of the IO debit freezing the bank account of the petitioner company is in clear violation of the law and account No. 407411212776 maintained at RBL Bank at Banglore, is directed to be de-freezed, subject to the condition that before de-freezing the account, the petitioner shall execute bonds before the Trial Court undertaking to produce Rs. 25,000/- in the Court as and when required by the Court and also to the extent that if any such order is made by the Court regarding disposal of the same, the same shall be complied by the petitioner.
15. The petition is accordingly allowed."
(Emphasis supplied)
10. The High Court of Delhi considers the very issue with regard to the power of the Investigating Officer to direct freezement of the account by a notice under Section 91 of the Cr.P.C. The Court clearly holds that the power is available under Section 102 of the Cr.P.C. and not under Section 91 of the Cr.P.C. That having not been done in the case at hand, the petition deserves to succeed, albeit, in-part, as liberty will have to be reserved to the Investigating Officer to act in accordance with law.
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10. For the aforesaid reasons, the following:
ORDER i. Criminal Petition is allowed in-part.
ii. The impugned direction of respondent No.2 to respondent No.3 to freeze the bank account bearing No.120000938126, of the petitioner, stands quashed.
iii. Liberty is reserved to the respondent - State to pass appropriate orders in accordance with law, if necessary."
and also the Apex Court in the case of NEVADA PROPERTIES PRIVATE LIMITED THROUGH ITS DIRECTORS v. STATE OF MAHARASHTRA AND ANR.2, has held as follows:
"30. Chapter VIIA was introduced in Cr.P.C. vide Act 40 of 1993 w.e.f. 20th July, 1994. This Chapter deals with reciprocal arrangements for assistance in certain matters and procedure for attachment and forfeiture of property. Property has been defined in Section 105A(d) as follows:
"'Property' means property and assets of every description whether corporeal or incorporeal, movable or immovable, tangible or intangible and deeds and instruments evidencing title to, or interest in, such property or assets derived or used in the commission of an offence and includes property obtained through proceeds of crime."
This would include property of all kinds, movable and immovable. The Legislature made it clear that property of all kinds can be attached and forfeited.
Section 105C (1) reads as follows:
2AIR 2019 SCC 4554
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NC: 2024:KHC:4339 WP No. 27312 of 2023 "S.105C (1) Where a Court in India has reasonable grounds to believe that any property obtained by any person is derived or obtained, directly or indirectly, by such person from the commission of an offence, it may make an order of attachment or forfeiture of such property, as it may deem fit under the provisions of Section 105D to 105J (both inclusive)."
Reading all these provisions together, it is clear that when any court in India has reasonable grounds to believe that any property has been obtained by any person directly or indirectly from the commission of an offence, the Court may make an order for attachment or forfeiture of such property.
31. This Court is not concerned with the procedure to be followed for attachment and forfeiture of the property but only the meaning of the word 'property'. Thus, Section 105C empowers the court to order forfeiture of any property which it may feel is derived or obtained directly or indirectly by the commission of an offence.
32. If the argument of the appellant and the State of Maharashtra is accepted then there was no need for the legislature to have introduced Chapter VIIA. It would also be pertinent to mention that the power of attachment and forfeiture is given to courts and not to police officer.
As pointed out in the judgment of my learned brother, if a police officer is given the power to seize immovable property it may lead to an absolutely chaotic situation. To give an example, if there is a physical fight between the landlord and the tenant over the rented premises and if the version of the appellant is to be accepted, the police official would be entitled to seize the tenanted property. This would make a mockery of rent laws. To give another example, if a person forges a will and thereby claims property on the basis of the forged will, can the police officer be given the power to seize the entire property, both movable and immovable, that may be mentioned in the will? The answer has to be in the negative. Otherwise it would lead to an absurd situation which could never have been envisaged by the Legislature. The power of seizure in Section 102 has to be limited to movable property.
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33. As far as the meaning of property in Section 452 of the Cr.P.C. is concerned, that is not a question referred to the larger Bench and therefore, I would refrain from saying anything about that."
In the light of the issue standing answered, the petition deserves to succeed, as a result of which, the impugned notice under Section 91 of the Cr.P.C. is rendered unsustainable.
10. For the aforesaid reasons, the following:
ORDER
i) Writ Petition is allowed.
ii) The impugned police notice dated 29.07.2021 issued by respondent No.2 vide Annexure-K in respect of Site No.1112 in J.P. Nagar 2nd Block, 8th Phase (Sy.No.15/1A Kothanuru) measuring 6.10 x 9.14 mtr belonging to the petitioner and the consequential order dated:
31.11.2021 bearing No. RGN/380/21-22 passed by respondent No.3 vide Annexure-L stand quashed qua the subject property at Sl.No.5 in the impugned notice.
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iii) Liberty is reserved to the respondents-State to initiate appropriate action in the event of need in accordance with law.
Sd/-
JUDGE SJK List No.: 1 Sl No.: 40 CT:SNN