Street vs The Union Of India on 2 August, 2022

[Cites 36, Cited by 0]

Jharkhand High Court

Street vs The Union Of India on 2 August, 2022

1.M/s Madhucon Projects Ltd., a company incorporated under the Companies Act, 1956 having its office at 'Madhucon House', Plot No.1129/A, Road No.36, Jubilee Hills, Hyderabad P.O.Jubilee Hills, P.S.Jubilee Hills, District Hyderabad, Telangana, through its Manager Legal and authorized representative Mr. Amod Kumar Chaturvedi, son of Shri K.S. Chaturvedi, ageda about 48 years, resident of 129/23 Luxmi Garden, Near Tikona Park, PO shivaji Nagar, P.S.Shivaji Nagar, District Gurugram, Haryana

2.M/s Madhucon Infra Ltd., a company incorporated under the Companies Act, 1956, having its office at 'Madhucon House', Plot No.1129/A, Road No.36, Jubilee Hills, Hyderabad P.O.Jubilee Hills, P.S.Jubilee Hills, District Hyderabad, Telangana, through its authorized representative Mr. G.Sriram son of Shri Gurukataksham, aged about 54 years, resident of H.No.12, Aadinath Hill View Villas, Annai Anjugam Street, Shubham Nagar Part-3 Zamin Pallavaram, PO Keelkaltai, P.S. Keelkaltai, District-Kancheepuram, Tamilnadu

3. M/s Madhucon Toll Highway Ltd., a company incorporated under the Companies Act, 1956, having its office at 3rd floor, 'Madhucon House', Plot No.1129/A, Road No.36, Jubilee Hills, Hyderabad P.O.Jubilee Hills, P.S.Jubilee Hills, District Hyderabad, Telangana, through its authorized representative Mr. G.Sriram son of Shri Gurukataksham, aged about 54 years, resident of H.No.12, Aadinath Hill View Villas, Annai Anjugam Street, Shubham Nagar Part-3 Zamin Pallavaram, PO Keelkaltai, P.S. Keelkaltai, District-Kancheepuram, Tamilnadu

4.M/s Ranchi Expressways Ltd., a company incorporated under the Companies Act, 1956, having its office at 3rd floor, 'Madhucon House', Plot No.1129/A, Road No.36, Jubilee Hills, Hyderabad P.O.Jubilee Hills, P.S.Jubilee Hills, District Hyderabad, Telangana, through its authorized representative Mr. G.Sriram son of Shri Gurukataksham, aged about 54 years, resident of H.No.12, Aadinath Hill View Villas, Annai Anjugam 2 W.P.(Cr.) No. 154 of 2020 Street, Shubham Nagar Part-3 Zamin Pallavaram, PO Keelkaltai, P.S. Keelkaltai, District-Kancheepuram, Tamilnadu ..... Petitioners

-- Versus --

The Union of India, through Central Bureau of Investigation, Anti- Corruption Branch, 2 Booty Road, P.O. Bariatu, P.S. Bariatu, District Ranchi ...... Respondent

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PRESENT:

HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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For the Petitioner :- Mr. R.S. Mazumdar, Sr. Advocate For the State(CBI) :- Mr. Navneet Sahay, A.C. to Mr. Prashant Pallava, Advocate

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C.A.V. On 11.07.2022 Pronounced On : 02.08.2022 This petition has been filed for quashing the impugned letter dated 02.04.2019 (Annexure-3) issued by the respondent in exercise of powers under section 91 Cr.P.C. directing Canara Bank (Prime Corporate Branch, Secunderabad) and all other consortium of banks funding the project of "4-laning of Ranchi-Jamshedpur National Highway, in the State of Jharkhand, not to allow the petitioners to operate their existing bank accounts, FDs, etc. Further prayer is made for quashing the impugned reply of respondent dated 23.05.2019 dismissing the representation of the petitioner no.1 dated 06.05.2019.

Mr. R.S.Mazumdar, the learned Senior counsel appearing on behalf of the petitioners submitted that the petitioner was awarded the project for 4-laning of Ranchi-Rargaon-Jamshedpur section of 163.50 Kms on Design Built Finance Operate Transfer (DBFOT) annuity basis for semi annuity of INR 133.20 Crs. For 15 years.

Mr. Mazumdar, the learned Sr. counsel appearing for the petitioners further submitted that on 20.04.2011 Concession 3 W.P.(Cr.) No. 154 of 2020 Agreement entered between petitioner no.4 (Special Purpose Vehicle of petitioner no.1) and NHAI. Project cost was to be INR 1655 crs with a concession period of 15 years (including 912 days construction period).

Consortium of lenders, led by Canara Bank, were to lend INR 1151.96 crs out of which interest during construction (IDC) was stipulated to be INR 147.65 crs.

On 06.07.2011 Engineering Procurement and construction contract was signed between the petitioner nos.1 and 4.

The learned Sr. counsel appearing for the petitioners submitted that on 17.10.2011 was the scheduled appointed date for commercial operation of the project as per the concession agreement keeping which in mind, petitioner no.1 had mobilized manpower and equipment spread over 7 camp sites at the project site which entailed an expenditure of INR 102.62 crs from its own resources.

He further submitted that on 03.01.2012 INR.50 cr was infused by petitioner no. 1 to petitioner no.2 which was onward infused to petitioner no.3 as a subordinate debt. Thereafter as per the Engineering Procurement Construction (EPC) Agreement, petitioner no.4 extended INR 50 crs to the petitioner no.1 as material and mobilization advance which after adjustment against INR 103.62 cr spent on mobilization was further invested by petitioner no.1 in petitioner no.4 as equity through petitioner nos.2 and 3.

According to the learned Sr. counsel, on 04.12.2012 appointed date was declared by NHAI. 80% of land was to be handed over at this time with 100% to be handed over within 90 days.

However, 80% land was actually handed over after 6 years on 31.05.2018 with NHAI had not obtained statutory environmental and forest clearance mandatorily required whereby the project faced delays, overrun of costs from the planned expenditure.

4 W.P.(Cr.) No. 154 of 2020

Mr. Mazumdar, the learned Sr. Counsel further submitted that in W.P.(PIL) No.3503 of 2014 on 14.11.2017 this Hon'ble Court directed serious fraud investigation officer (SFIO) to carry out inquiry qua this project due to delay and cost overrun. On 25.07.2018 I.A. No.6613 of 2018 was filed in W.P.(PIL) No.3503 of 2014 by NHAI before this Hon'ble Court seeking permission to terminate concessionaire agreement. On 07.08.2018, PE-02(A)/2018-R was registered on the order dated 25.07.2018 of this Hon'ble Court in W.P.(PIL) No.3503 of 2014.

The learned Sr. counsel submitted that on 30.01.2019 termination letter was issued by NHAI to petitioner no.4 without disposal of I.A No.6613/2018 in W.P.(PIL) No.3503 of 2014. Petitioner no.1 had completed 50% of the project by then, with 10% of the works yet to be certified. At this juncture, out of total payment of INR 1431 crs to be received by the petitioner no.1, petitioner no.4 had made payment of only INR 974.35. Out of INR 1151.96 crs to be released by banks, INR 1030.65 crs was only released, with interest during construction (IDC) deducted being INR 378.58 cr. Instead of INR 147.65 cr. (260% more). Machinery of petitioner no.1 conservatively valued at INR 267.64 crs is lying at the site. Petitioner no.1 had spent INR 122.21 crs from its own pocket. While petitioner required INR 724.42 crs to complete the project, NHAI gave contracts worth INR 1447.65 crs to new contractors and that too at conditions wherein this is likely to rise by another 20%, to complete nearly 40% of the same.

On 12.03.2019 FIR No.RC2(A)/2019-R was registered u/s 120(B) r/w sections 420, 468, 471 and 477(A) IPC and section 13(2) r/w 13(1)(a) of Prevention of Corruption Act with the check period being 2010-2018.

Mr. Mazumdar, the learned Senior counsel for the 5 W.P.(Cr.) No. 154 of 2020 petitioners further submitted that the company is required to pay the employees their salary and the entire business is affected.

He further elaborated his argument by way of submitting that on 02.4.2019 impugned letter was issued by respondents to canara bank directing that no operation should be allowed in the bank account of the petitioners maintained in all the banks and all other consortium of banks. The petitioner nos.2 and 3 filed representation on 20.04.2019 with respondents for defreezing of account and a similar representation was filed by the petitioner no.1 dated 06.05.2019. By letter dated 23.05.2019 the respondents disallowed the representation of the petitioner no.1 on the ground that it was essential to hold the amounts in its bank accounts. He submitted that on verbal enquiry it was replied that letter dated 23.05.2019 is meant for refusal of both the representations of the petitioners. He submitted that the Managing Director of the respondent no.4 filed a writ petition, i.e., W.P.(Cr.) No.187/2019 for seeking release of money from his personal savings account due to his personal commitments.

The said writ petition was disposed of by order dated 05.2.2020 in the individual capacity for defreezing his personal savings bank account which was frozen by the impugned letter. He further submitted that freezing of bank account is a result of complete non-application of mind as the same was done under section 91 Cr.P.C, de hors invocation of section 102 Cr.P.C. he submitted that the specific provision of sub section 3 of section 102 Cr.P.C. has not been followed. The impugned letter of freezing was issued on 2.04.2019. The petitioner filed representation on 02.4.2019 for defreezing and the respondent C.B.I. intimated the Court about freezing of the account on 21.5.2019 and by letter dated 23.4.2019 request for defreezing was rejected. He submitted that once the statute provides to do a thing in a particular 6 W.P.(Cr.) No. 154 of 2020 way that is required to be done in light of that statute which is not followed. He relied in the case of Opto Circuit India Ltd. V. Axis Bank and Others, 2021 SCC OnLine SC 55. Paragraph nos.7,8,9,15,16 and 17 of the said judgment are quoted hereinbelow:

"7. To appreciate this aspect, it would be appropriate to refer to Section 17 of the PMLA whereunder the freezing of such property or record is also provided. Section 17 of the PMLA reads as hereunder:

"17. Search and seizure.--(1) Where the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person--

(i) has committed any act which constitutes money- laundering, or

(ii) is in possession of any proceeds of crime involved in money-laundering, or

(iii) is in possession of any records relating to money- laundering, or

(iv) is in possession of any property related to crime, then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to--

(a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept;

(b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available;

(c) seize any record or property found as a result of such search;

(d) place marks of identification on such record of property, if required or make or cause to be made extracts or copies therefrom;

(e) make a note or an inventory of such record or property;

(f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act:

(1-A) Where it is not practicable to seize such record or 7 W.P.(Cr.) No. 154 of 2020 property, the officer authorised under sub-section (1), may make an order to freeze such property whereupon the property shall not be transferred or otherwise dealt with, except with the prior permission of the officer making such order, and a copy of such order shall be served on the person concerned:

Provided that if, at any time before its confiscation under sub-section (5) or sub-section (7) of Section 8 or Section 58-B or sub-section (2-A) of Section 60, it becomes practical to seize a frozen property, the officer authorised under sub- section (1) may seize such property.

(2) The authority, who has been authorised under sub-

section (1) shall, immediately after search and seizure or upon issuance of a freezing order, forward a copy of the reasons so recorded along with material in his possession, referred to in that sub-section, to the adjudicating authority, in a sealed envelope, in the manner, as may be prescribed and such adjudicating authority shall keep such reasons and material for such period, as may be prescribed. (3) Where an authority, upon information obtained during survey under Section 16, is satisfied that any evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence:

Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section. (4) The authority seizing any record or property under sub-section (1) or freezing any record or property under sub-

section (1-A) shall, within a period of thirty days from such seizure or freezing, as the case may be, file an application, requesting for retention of such record or property seized under sub-section (1) or for continuation of the order of freezing served under sub-section (1-A), before the adjudicating authority."

(emphasis supplied)

8. A perusal of the above provision would indicate that the prerequisite is that the Director or such other authorised officer in order to exercise the power under Section 17 of the PMLA, should on the basis of information in his possession, have reason to believe that such person has committed acts relating to money-laundering and there is need to seize any record or property found in the search. Such belief of the officer should be recorded in writing. Sub-section (1-A) to Section 17 of the PMLA provides that the officer authorised under sub-section (1) may make an order to freeze such 8 W.P.(Cr.) No. 154 of 2020 record or property where it is not practicable to seize such record or property. Sub-section (2) provides that after search and seizure or upon issuance of a freezing order the authorised officer shall forward a copy of the reasons recorded along with material in his possession to the adjudicating authority in a sealed envelope. Sub-section (4) provides that the authority seizing or freezing any record or property under sub-section (1) or (1-A) shall within a period of thirty days from such seizure or freezing, as the case may be, file an application before the adjudicating authority requesting for retention of such record or properties seized.

9. For the purpose of clarity, it is emphasised that the freezing of the account will also require the same procedure since a bank account having alleged "proceeds of crime"

would fall both under the ambit "property" and "records". In that regard, it would be appropriate to take note of Sections 2(1)(v) and 2(1)(w) of the PMLA which defines "property"

and "records". The same read as follows:

"2. (1)(v) "property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located;

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2. (1)(w) "records" include the records maintained in the form of books or stored in a computer or such other form as may be prescribed;"

15. Apart from the above consideration, what has also engaged the attention of this Court is with regard to the plea put forth on behalf of the appellant regarding the need to defreeze the account to enable the appellant to pay the statutory dues. The appellant in that regard has relied on the certificate issued by the Chartered Accountant (Annexure P- 38 at p. 231) which indicates the amount payable towards ITDS, PF, ESI, professional tax, gratuity and LIC employees' deductions, in all amounting to Rs 79,93,124. Since we have indicated that the freezing has been done without due compliance with law, it is necessary to direct Respondents 1 to 3 to defreeze the respective accounts and clear the cheques issued by the appellant, drawn in favour of the competent authority towards ITDS, PF, ESI, professional tax, gratuity and LIC employees' deductions, subject to availability of the funds in the account concerned. Needless to mention that if any further amount is available in the account after payment of the statutory dues and with regard to the same any action is to be taken by Respondent 4 within 9 W.P.(Cr.) No. 154 of 2020 a reasonable time, it would open to them to do so subject to compliance with the required procedure afresh, as contemplated in law.

16. In terms of the above, the Communication dated 15- 5-2020 is quashed. We direct that the respondents shall defreeze the accounts bearing Nos. 914020014786978, 200006044354 and 39305709999 and honour payments advised by the appellant towards statutory dues stated supra. Liberty is reserved to Respondent 4, thereafter to initiate action afresh in accordance with law, if they so desire.

17. The appeal is allowed to the above extent with no order as to costs."

He further submitted that identical was the issue before Hon'ble Kerala High Court in the case of Mohammad Enamul Haque v. Central Bureau of Investigation, 2018 SCC OnLine Ker 22772. Paragraph nos.8,9 and 10 of the said judgment are quoted below:

"8. Now, the question is whether the bank accounts of the petitioner will have any nexus, or whether the investigating agency can have any reason to believe or suspect that his bank accounts will have any nexus with the commission of crime alleged against the 1st accused. As already stated, it cannot be the concern of the CBI now, whether the accused has committed any economic offence. If the CBI has reason to believe or suspect that the petitioner has committed any such offence, it will have to be reported to the concerned authority, and the concerned authority will have to step in for necessary action under the existing laws. Every investigating agency is governed by the laws of the land, including the Code of Criminal Procedure. No agency can arbitrarily freeze bank accounts under Section 102 Cr.P.C., or keep the accounts frozen indefinitely, because it will have the ultimate effect of denying the Constitutional or legal rights of the account holder. Such a step can be resorted to by the investigating agencies only if it is found absolutely necessary. Just because, a person is said to have paid bribe to an accused, his bank accounts cannot be mechanically or arbitrarily frozen. Arbitrariness in investigation, or investigative excess, cannot be, in any circumstance, condoned by the courts. Here is a case where, the CBI reported no objection when the petitioner sought orders de-freezing three of his accounts. What the CBI has frozen is not one or two or three accounts of the petitioner, but 26 accounts, leaving no account be operated by him for his daily affairs and transactions. This will have to be said to be high-handed arbitrariness, and also an investigative excess. Whether the petitioner's transactions as a business man involves any illegality will have to be monitored and inspected appropriately by the appropriate agencies, and necessary action will have to be taken against him. That cannot be the concern or area of action in a prosecution brought under the provisions of the PC Act.

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9. As already observed, it is really doubtful, how the bank account of the 2nd accused, who allegedly paid bribe to the public servant, will come within the purview of Section 102 Cr.P.C. Just because the 2nd accused once paid some amount to the public servant as bribe, all his bank accounts cannot be frozen arbitrarily by the CBI. It is not known, why the accounts of the petitioner should be subjected to forensic audit. If at all any auditing or forensic auditing is required, it will have to be done and completed within a reasonable time. The accounts cannot be kept indefinitely frozen, thereby denying the precious rights of the accused as a citizen of India.

10. As regards the three accounts in question, I find that those accounts were once allowed to be operated, when the CBI endorsed 'no objection', and the court, with the consent of the CBI, de-froze those accounts. When forensic auditing is possible, even without freezing an account, the petitioner can very well be permitted to operate those three accounts. In the particular circumstances of the case, I feel it absolutely necessary to interfere under Section 482 Cr.P.C. atleast as regards the three accounts covered by the impugned order. As regards the other 23 accounts, the CBI will have to complete the process of forensic auditing, if at all required, within a reasonable time, and if it is not completed within a reasonable time, the petitioner can approach the court."

Relying on this judgment, he submitted that since the statutory provision under section 102 Cr.P.C not followed direction be issued to defreeze the account. He further relied in the case of Mr. Guruprasath S/o Mr. V.S.Rathinam v. State, represented by Inspector of Police, vigilance and Anti Corruption, Kanchipuram, 2017 SCC OnLine Mad 34779. Paragraph nos.9 to 11 and 13 of the said judgment are quoted below:

"9. The learned counsel for the revision petitioner took the attention of this Court to Section 102 Cr.P.C and the judgments of this Court as well as the Supreme Court rendered in connection with freezing of account pursuant to the power exercised under Section 102 Cr.P.C. The main contention of the learned counsel appearing for the revision petitioner is that the Bank Account was freezed on 01.08.2017 whereas Police has intimated to the Court only on 21.08.2017. The proposed duration of seizure is not specified.

10. The Supreme Court, in the following judgments have indicated that while freezing account, pursuant to any pending investigation, such freezing shall be of very short duration and the period should also be specific and pending investigation, Bank accounts cannot be freezed indefinitely. In this case, the petitioner is not even arrayed as an accused, but his business accounts are being freezed without any intimation and in violation of statute and contrary to the dictum laid in the judgments of the Supreme Court. Under Section 18 of the Prevention of Corruption Act, conditions are imposed to the Investigating Agency regarding the manner in which the inspection should be conducted regarding Bank Accounts.

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Without the authorization of the Superintendent of Police, accounts of a person shall not be inspected by any Police Officer below the rank of Superintendent of Police. The freezing of accounts in this case has been done in violation of Section 18 of the Prevention of Corruption Act.

11. In support of the submission, the learned counsel for the revision petitioner relied upon the case of Uma Maheswari v. State reported in 2013 SCC OnLine Mad 3829 wherein, this Court has held as under:

"44. The Investigation Officer has suspected that the moneys swindled were secreted by the accused persons in their Bank accounts. Thus, he took steps to freeze the Bank accounts.

45. We have elaborately seen that such freezing of the Bank accounts shall be reported to the jurisdiction Magistrate. When it is to be reported has been stated in Section 102(3) Cr.P.C. It is stated therein that it shall be reported "forthwith" to the jurisdiction Magistrate. The reporting of the freezing of the Bank accounts is mandatory. Failure to do so will vitiate the freezing of the bank account. In this back drop of the matter, the word "forthwith" shall mean 'immediately', 'without delay', 'soon'.

46. In this case, the freezing of the Bank accounts were done on 30.04.2013 and on 03.05.2013. However, the Investigation Officer has reported this to the learned XI Metropolitan Magistrate, Saidapet only on 27.06.2013. This will not be reporting of the freezing of the Bank account to the Magistrate forthwith. Thus, there is breach of mandatory requirement of law. Thus, the freezing of the Bank account is vitiated."

13. From a reading of the provisions as well as the judgments of this Court, it is clear that the statute mandates intimation of freezing of the account to the Magistrate Court having jurisdiction forthwith, but no such mandate regarding the Account holder. However, prudence requires such intimation, since the account holder will have to make several alternative arrangements to meet exigency in connection with his banking transaction. In this case, admittedly, freezing of account was intimated to the Court on 21.08.2017, though, the account was freezed on 01.08.2017. This does not fall any where near the mandatory requirement of intimation to the court forthwith."

Mr. Sahay, the learned counsel appearing on behalf of the respondent CBI on the other hand submitted that investigation revealed that the company namely, M/s Ranchi Expressways Ltd.

(hereinafter referred to as the REL) awarded engineering procurement construction contract of the project highway to M/s Madhucon Projects Ltd (hereinafter referred to as MPL) on 06.05.2011. He submitted that REL approached canara bank, Prime corporate branch, Secunderabad and other banks in order to arrange loan for the purpose of executing 12 W.P.(Cr.) No. 154 of 2020 the project. Pursuant to this, common loan agreement dated 31.10.2011 was executed among REL (as borrower), banks and financial institutions (as lenders), canara bank (as lenders' agent) and SBICAP Trustees company limited (as security trustee) for making the loan available to M/s REL for taking up the project. As per common loan agreement total cost of the project was estimated at Rs.1655 Crs. Total bank loan of Rs.1151.50 Crs was sanctioned to M/s REL by a consortium of 14 banks for executing the project. As per the above common loan all amounts borrowed by the borrower was to be applied in or towards the construction and development of the project highway.

He submitted that the work did not progress as per the timelines, the date of completion was revised multiple times and inspite of that the work was not completed and the National High Ways Authorities (hereinafter referred to as the NHAI) terminated the project in August 2018 due to continued slow/no progress. He submitted that the investigation established that the progress was not commensurate with the loan released as about 90% of the loan amount was disbursed to M/s REL but the work-in-progress was only 50% approx. and charge sheet was filed on 30.12.2020. He submitted that if the bank accounts are defreezed the petitioners are likely to divert the money. He submitted that so far section 102 Cr.P.C is concerned, that is there, and the proper application of mind was applied before issuing the order of freezing the account in question.

The Court heard both the sides at length and finds that admittedly, the road construction work was provided and an agreement to that effect was entered into. When the progress was slow a PIL was filed and pursuant thereto, the investigation was handed over to the CBI. The CBI registered the case and submitted charge sheet on 30.12.2020.

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On perusal of section 91 of the Cr.P.C, it is crystal clear that power of police officer is there to issue summons to any person to produce the document or other thing if the police officer considers it necessary or desirable for the purpose of investigation.

A bare reading of section 102 Cr.P.C, it is crystal clear that police officer has the power to seize any property which may be alleged or suspected to have been stolen or which may be found in a situation which creates suspicion in creation of any offence, however, the sine qua non for exercise of this power is that firstly the property must have a direct link alleging to the offence; secondly, the seizure to be submitted forthwith to the Judicial Magistrate; and thirdly, if the police officer has to consider that continued retention of the property in police custody may not be considered necessary for the purpose of investigation, he may give the custody thereof to any person of his executing bond undertaking to produce property before the court as and when required.

Admittedly, in the case in hand the intimation to the court was made on 21.05.2019 wherein provision of sub section 3 to section 102 Cr.PC provides for intimation forthwith. Moreover, the charge sheet has already been submitted on 30.12.2020 in this case and investigation is complete. How the entire amount in the bank account has any nexus with the commission of any offense can be proved in the trial. The Allahabad High Court in Criminal Miscellaneous Writ Petition No.11201 of 2021 in the case of Amit Singh v. State of U.P. and Others which was decided on 18.4.2022 held in paragraph 14 to 22, which are quoted hereinbelow:

"14. In view of submissions of learned counsel for the parties the main issue which falls for our consideration is as to whether Section 102(3) Cr.P.C. is mandatory or directory in nature? It is well settled that non-observance of a mandatory condition is fatal to the validity of the action. However, non-observance would not matter if the condition is found to be merely 14 W.P.(Cr.) No. 154 of 2020 directory. In other words, it is not that every omission or defect entails the drastic penalty of invalidity. Whether the provision is mandatory or directory can be ascertained by looking at the entire scheme and purpose of the provision and by weighing the importance of the condition, the prejudice to private rights and the claims of the public interest, therefore, it will depend upon the provisions of the statute and mere use of word ''shall' would itself not make the provision mandatory. The Hon'ble Supreme Court in the case of State of Haryana Versus Raghuveer Dayal (Supra) has held that the use of word 'shall' is ordinarily mandatory but it is sometimes not so interpreted if the scope of the enactment, on consequences to flow from such construction would not so demand.

15. The Hon'ble Supreme Court, in the case of Nasiruddin and Others Versus Sita Ram Agarwal; AIR 2003 Supreme Court 1543, has held that it is well settled that the real intention of the legislation must be gathered from the language used. It may be true that the use of the expression ''shall or may' is not decisive for arriving at a finding as to whether statute is directory or mandatory. But the intention of the legislature must be found out from the scheme of the Act. It is also equally well settled that when negative words are used the courts will presume that the intention of the legislature was that the provisions are mandatory in character. It has further been held that if an act is required to be performed by a private person within a specified time, the same would ordinarily be mandatory but when a public functionary is required to perform a public function within a time frame, the same will be held to be directory unless the consequences therefor are specified. The relevant paragraphs 38 and 39 are extracted below:-

"38. The court's jurisdiction to interpret a statute can be invoked when the same is ambiguous. It is well known that in a given case the court can iron out the fabric but it cannot change the texture of the fabric. It cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous. It cannot add or subtract words to a statute or read something into it which is not there. It cannot re-write or recast legislation. It is also necessary to determine that there exists a presumption that the legislature has not used any superfluous words. It is well settled that the real intention of the legislation must be gathered from the language used. It may be true that use of the expression "shall or may" is not decisive for arriving at a finding as to whether the statute is directory or mandatory. But the intention of the legislature must be found out from the scheme of the Act. It is also equally well settled that when negative words are used the courts will presume that the intention of the legislature was that the provisions are mandatory in character.

39. Yet there is another aspect of the matter which cannot be lost sight of. It is a well-settled principle that if an act is required to be performed by a private person within a specified time, the same would ordinarily be 15 W.P.(Cr.) No. 154 of 2020 mandatory but when a public functionary is required to perform a public function within a time-frame, the same will be held to be directory unless the consequences therefor are specified. In Sutherland's Statutory Construction, 3rd Edn., Vol. 3, at p. 107 it is pointed out that a statutory direction to private individuals should generally be considered as mandatory and that the rule is just the opposite to that which obtains with respect to public officers. Again, at p. 109, it is pointed out that often the question as to whether a mandatory or directory construction should be given to a statutory provision may be determined by an expression in the statute itself of the result that shall follow non-compliance with the provision. At p. 111 it is stated as follows:

"As a corollary of the rule outlined above, the fact that no consequences of non-compliance are stated in the statute, has been considered as a factor tending towards a directory construction. But this is only an element to be considered, and is by no means conclusive."

16.The consequences of non reporting about the seized property have not been provided under the section. In addition, the requirement of reporting in the manner, as stated, is on the part of a public functionary and in view of the law laid down by the Hon'ble Supreme Court, as noticed above, the same is required to be held to be directory unless the consequences thereof are specified. Since the consequences have not been specified, it would be safe to hold that requirement of Section 102(3) Cr.P.C. cannot be termed as mandatory but would be directory in nature.

17. The Scheme for disposal of property under the Code is provided under Chapter XXXIV of the Cr.P.C. Section 451 provides that when any property is produced before any Criminal Court during any inquiry or trial, the Court may make such order as it thinks fit for the proper custody of such property pending the conclusion of the inquiry or trial. Section 452 provides the order for disposal of property at conclusion of trial. Section 457 (1) provides that whenever the seizure of property by any police officer is reported to a Magistrate under the provisions of this Code, and such property is not produced before a Criminal Court during an inquiry or trial, the Magistrate may make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or if such person cannot be ascertained, respecting the custody and production of such property. Sub-section (2) provides that if the person so entitled is known, the Magistrate may order the property to be delivered to him on such conditions (if any) as the Magistrate thinks fit and if such person is unknown, the Magistrate may detain it and shall, in such case, issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appear before him and establish his claim within six months from the date of such proclamation.

18. In view of above scheme of the Code the purpose of information given to the Magistrate regarding seizure of 16 W.P.(Cr.) No. 154 of 2020 property by the Police Officer is merely to facilitate its disposal in accordance with law during pendency of trial or subsequent thereto. Therefore non reporting of the seizure forthwith, as provided under Section 102(3) Cr.P.C., shall not ipsofacto render the seizure illegal particularly as no period is specified and it's consequences have not been provided. Therefore when on an application moved by the petitioner, the same has been informed, the petitioner may move the concerned Magistrate for the custody of the property i.e. unfreezing of the account of the petitioner, which may be dealt with in accordance with law and on it's own merit.

19. The Delhi High Court, in the case of Ms.Swaran Sabharwal Versus Commissioner of Police (Supra), quashed the prohibitory order on the ground that the moneys in the bank does not constitute "case property". In the case of Dr. Shashikant D. Karnik Versus The State of Maharashtra (Supra), the Bombay High Court allowed the petition on the ground that all the three requirements of Section 102 Cr.P.C. have not been complied. It appears that in this case a direction was issued not to permit operation of the bank accounts of petitioner therein and his family without seizure therefore the court was of the view that there can not be an interim order and thereafter it's continuation. The authorities had also failed to ascertain, by the time it was decided, as to whether there was any connection of it with the alleged crime. The court has only mentioned that sub-section (3) of Section 102 lays down a mandate without any finding as to whether it is mandatory or directory. The Court without any provision has also observed that there is a fourth requirement of law that notice is required to be given before stopping the operation of the account. In the absence of any specific stipulation in the statute or necessary consequence flowing from the scheme contained in the Act, we are not inclined to subscribe to such a view.

20. In the present case we have considered the issue in detail and are of the view that sub-Section (3) of Section 102 Cr.P.C. is directory in nature and once the court has been informed of freezing of bank account on an application moved by the petitioner, the requirement of statute stands fulfilled. Deprivation of property (freezing of bank account) otherwise being as per law, the argument that Article 300-A of Constitution is violated cannot be accepted. Contrary view taken by learned Single Judges of the High Courts of Delhi, Madras and Telangana in the judgments in Ms Swaran Sabharwal Versus Commissioner of Police, 1990 (68) Comp Cas 652 Delhi (DB); Muktaben M.Mashru Vs. State of N.C.T. of Delhi and Another; Crl M.C. 4206 of 2018, decided on 29.11.2019; Tmt.T. Subbulakshmi Vs. The Commissioner of Police; Crl. O.P. No.13103 of 2013 decided on 30.08.2013; Uma Maheshwari Vs. The State Rep. By Inspector of Police, Central Crime Branch, Egmore, Channai; Criminal O.P. No.15467 of 2013 decided on 20.12.2013; The Meridian Educational Society Vs. The State of Telangana; Writ Petition No.21106 of 2021 decided on 04.10.2021 without considering and dealing with the provisions and scheme of the Code cannot be relied upon. Therefore these judgments can not be of any help to the petitioner. The 17 W.P.(Cr.) No. 154 of 2020 Judgment, in the case of Chief Information Commissioner and another Versus State of Manipur and another (Supra), relied by learned counsel for the petitioner, is also not applicable in the facts and circumstances of the present case.

21. In view of the discussions made above this court is of the considered opinion that there is no infringement of Constitutional right of property of the petitioner under Article 300-A of the Constitution of India. Article 300-A of the Constitution of India only provides that no person shall be deprived of his property save by authority of law. The alleged deprivation of property (freezing of bank account) since is found to be in accordance with applicable law i.e. Code of Criminal Procedure, the action complained of is clearly in consonance with Article 300-A of the Constitution of India. Petitioner's plea of violation of Article 300-A of Constitution of India cannot be pressed to impeach the act of freezing of bank account after such act is held to be as per applicable law i.e. the Code of Criminal Procedure.

22. The bank account of the petitioner has been got freezed in exercise of powers given under Section 102 Cr.P.C. and the Code of Criminal Procedure restricts the release of such bank account only to an order passed by the Magistrate, which is not the case here. The provisions of the Code thus cannot be by- passed on the plea that Article 300-A of Constitution of India is violated. Merely because the freezing of bank account is not reported forthwith and reported only on an application moved by the petitioner, it cannot be said that there is infringement of right of property given under Article 300-A of the Constitution of India. The plea of the petitioner in this regard is misconceived and not sustainable. The writ petition consequently lacks merit and is dismissed. No order is passed as to costs."

In the case in hand the petitioner has not moved before the trial court for defreezing the account in question. Sub-

section (3) of Section 102 Cr.P.C is directory in nature and once the court has been informed of freezing of bank account, the requirement of statute stands fulfilled. Section 451 of Cr.P.C enables the trial court to grant interim custody pending trial and Section 457 also vests power in the Magistrate to deal with the property as deemed proper and necessary. An accused whose property is seized by the police officer can file application to grant interim custody.

The C.B.I. has already informed the trial court for freezing the bank account and it appears that the petitioner has not approached the trial court seeking to grant interim 18 W.P.(Cr.) No. 154 of 2020 custody of the property seized and, therefore, when an alternative remedy is available, the writ petition is not maintainable. This Court sitting under Article 226 of the Constitution of India, power is very wide and all pervading wherever and whenever, by the conduct/decision of a public authority rights of a person are infringed and at the same time, the constitutional Courts are slow in entertaining the writ petitions where statutory scheme envisages certain procedures and aggrieved party has statutorily engrafted remedies.

In the case of Mohammed Enamul Haque (supra) relied by the learned counsel for the petitioner the matter arisen after order of trial court and same was the situation in Mr. Guruprasath (supra). Thus, these judgments are not helping the petitioners.

In view of the above facts, there is no substance in this petition and the same deserves to be and is hereby dismissed.

However, the petitioner is at liberty to avail appropriate remedy as available to it under the Code of Criminal Procedure as well as the other provisions of the Act or Code. On filing of such application by the petitioner, the concerned court will decide the same, according to law.

It is made clear that this Court has not expressed any opinion on the merits of the case.

W.P.(Cr.) No. 154 of 2020 stands disposed of.

I.A., if any, stands disposed of.

( Sanjay Kumar Dwivedi, J.) Jharkhand High Court, Ranchi, Dated 02/ 08 / 2022 N A F R/SI

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