Manipur High Court
National Investigation Agency vs Salai Group Of Companies And Smart ... on 25 February, 2021
Equivalent citations: AIRONLINE 2021 MPR 36
Author: A. Bimol Singh
Bench: Mv. Muralidaran, Ahanthem Bimol Singh
IN THE HIGH COURT OF MANIPUR
AT IMPHAL
Digitally
Yumk signed
Yumkham
by
CRIMINAL APPEAL NO. 12 OF 2020
ham Rother
Date: [Ref:- Order dated 02/11/2020 passed by the Special Court,
2021.02.25
Rother 11:06:51
+05'30'
NIA, Manipur in Cril. Misc Case No. 55 of 2020]
National Investigation Agency, Ministry of Home Affairs, Government
of India, New Delhi, represented by the Chief Investigation Officer
(CIO), National Investigation Agency, Branch Office, Guwahati,
Assam, Camp Office Imphal, Type VI, Quarter G-I, Lamphel Officer
Colony, Lamphelpat, P.O. & P.S. Lamphel, Imphal west District,
Manipur-795004.
... Appellant.
-Versus -
Salai Group of Companies and Smart Society, having its registered
office address at Sagolband Tera Loukrakpam Leikai, Imphal West
District, Manipur, as represented by Elangbam Brojendro Singh,
aged about 42 years, S/o Late Elangbam Bhubaneshwor Singh of
Keishamthong Elangbam Leikai, P.O. and P.S. Imphal West, Imphal
West District, Manipur, who is the Managing Director of Salai Group
of Companies and General Secretary of Smart Society.
.. .....Respondent
B E F O R E
HON'BLE MR. JUSTICE MV. MURALIDARAN
HON'BLE MR. JUSTICE AHANTHEM BIMOL SINGH
For the Appellant : Mr. Kh. Samarjit, Adv.
For the respondent : Mr. HS. Paonam, Sr. Adv.
Date of Hearing : 30.11.2020 & 09.12.2020
Date of Order : 25 .02.2021
Criminal Appeal No. 12 of 2020 Page 1
JUDGMENT & ORDER
(CAV)
(A. Bimol Singh, J)
[1] Heard Mr. Kh. Samarjit, learned counsel appearing for the
appellant and Mr. HS. Paonam, learned Senior counsel appearing for
the respondent.
[2] The present appeal has been filed challenging the order dated
02.11.2020 passed by the Special Judge (NIA), Manipur in Cril. Misc.
Case No. 55 of 2020. The limited issue to be addressed in the present
appeal is about the justness of the action of the investigating officer of
freezing the bank accounts and sealing of the main office buildings and
sub-offices of the respondent in connection with FIR No. 223(10) 2019
LPS re-registered as RC-12/2019/NIA/GUW and the correctness of the
approached of the special Judge (NIA), Manipur in allowing the request
for de-freezing the bank account and opening of the office buildings of
the respondent.
[3] The relevant fact for the purpose of deciding the issue involved in
the present appeal is that on 30.10.2019, the Officer-in-charge of
Lamphel Police Station registered a Suo Moto case bearing FIR No.
223(10) 2019 LPS, U/S 121/121-A/123/153(A)/505(B)/124(A) and
120(B) IPC against one Narengbam Samarjit Singh and Yambem Biren
Singh alleging that it has been reported in the daily newspaper of
Criminal Appeal No. 12 of 2020 Page 2
Manipur dated 30th Oct. 2019 and also in social media that the said
2(two) accused persons have announced in a press conference held in
London on 29.10.2019 for separation of the Sate of Manipur from India
and forming the Manipur State Council and that the said 2(two) accused
persons, who declared themselves as Defence Minister and the Chief
Minister respectively, announce that they have sought asylum in the
United Kingdom (U.K.) and will operate from there.
[4] After registration of the aforesaid FIR, the investigating authority
promptly filed an application dated 02.11.2019 before the Court of Chief
Judicial Magistrate(CJM), Imphal West, Manipur, praying for issuing
search warrant of the Salai Group of Companies and Smart Society, the
respondent herein.
[5] The said application was allowed by the Chief Judicial Magistrate
(CJM), Imphal West by an order dated 02.11.2019 passed in Cril. Misc.
Case No. 219 of 2018, allowing the applicant/ Investigating Officer (I.O)
to conduct search of the Salai Group of Private Companies Offices and
its sub offices with a direction to submit report of the action taken with all
or any seize documents. Pursuant to the said order of the Chief Judicial
Magistrate (CJM), Imphal West, dated 02.11.2019, search warrant dated
02.11.2018 was issued authorising the Investigating Officer(IO) of the
case to search premises of 16(sixteen) companies of Salai Groups and
directing to produce any incriminating documents forthwith before the
Court.
Criminal Appeal No. 12 of 2020 Page 3
On the same day of issuing the said search warrant, all the
offices and buildings of the Salai Group of Companies and Smart
Society were sealed and all the bank accounts open in the name of the
respondent/companies were also frozen by the investigating authority.
[6] By an order dated 19.11.2019 issued by the Ministry of Home
Affairs, Government of India, the Central Government directed the
National Investigation Agency to take up investigation of the aforesaid
FIR case. In compliance with the aforesaid order of the Central
Government dated 19.11.2019, the NIA took over the investigation of the
said case by re-registering the case as RC-12/2019/NIA/GUW dated
21.11.2019 arising out of Lamphel Police Station, Manipur, FIR No.
223(10) 2019 dated 30.10.2019. Thereafter, on an application filed by
the NIA, the Special Judge (NIA), Manipur passed an order dated
22.11.2019 in Cril. Misc. No. 157 of 2019 directing the CJM, Imphal
West to transfer all the judicial dockets FIR No. 223(1) 2019 of Lamphel
Police Station to the Court of Special Judge NIA and thereafter, the NIA
started investigation of the case in full swing.
[7] It will be pertinent to mention here that after the case had been
transferred from the Court of Chief Judicial Magistrate (CJM), Imphal
West to the Court of Special Judge (NIA), Manipur, the officer-in-charge
of Lamphel Police Station submitted to the Court of CJM, Imphal West, a
detailed report dated 28.09.2009 of the I.O. of the FIR case on
Criminal Appeal No. 12 of 2020 Page 4
28.11.2019. The containts of the said report had been reproduced by the
Special Judge (NIA) at Para 8 of the impugned order.
[8] During the pendency of the criminal case and before completion
of the investigation, "Salai Group of Companies and Smart Society"
represented by its Managing Director filed an application registered as
Cril. Misc. Case No. 55 of 2020 before the Court of Special Judge (NIA),
Manipur praying for allowing to open the office of the Salai Group of
Companies and all Units of Smart Society which was closed by the
investigating authority as well as opening of the bank accounts of Salai
Group of Companies and all Units of Smart Society which were frozen
by the investigating authority.
[9] The said application was allowed by the Ld. Special Judge(NIA),
Manipur by an order dated 02.11.2020 passed in Cril. Misc. Case No. 55
of 2020. The operative portion of the said order is an under:
"21. In the result of the foregoing
observations, I come to the conclusion that the
freezing of the Bank Accounts of the Salai Group
of Companies referred to above and sealing of the
Main Office building as well as its Sub-Offices of
Salai Group of Companies are illegal and cannot
be sustainable in the eye of law. Hence, the prayer
of the petitioner for de-freezing the said Bank
Accounts of Salai Group of Companies and
opening of the Main Office building as well as its
Sub-Offices of Salai Group of Companies are
allowed on the following conditions and modalities:
ORDER
"1. It is ordered and directed to open the main office building and its Sub-Offices of the Criminal Appeal No. 12 of 2020 Page 5 SALAI group of Company and SMART Society before 4;00 p.m. of 04-11-2020.
The present I.O. of this case [NIA] is directed for compliance of this order.
"2. It is also ordered and directed to de-freeze all the Bank Accounts of SALAI group of Company and SMART Society referred to above which were freeze of their own or from any authority concerned. The present I.O. of this case [NIA] and concerned Bank Authorities are directed for compliance of this order.
"3. It is also ordered and directed to release all the seized Bank Accounts of the Salai Group of Company and Smart Society referred to above, in order to enable to operate financial transaction of the Company during the pendency of case by executing Zima Bonds on the following modalities:
i) the I.O. of the case/ officials of NIA is directed to submit the list of the Bank Accounts of Salai Group of company frozen in connection with this case since there are difference of Bank Account numbers made by the petitioner in his application and the „ANNEXURE B‟ of the I.O. of FIR Case No. 223(10) 2019 LPS reproduced above on or before 11:00 a.m. of 04.11.2020;
ii) the newly Board of Directors of the Salai Group of Company and Smart Society namely, (i) E. Brojendro Singh, (ii) N. Bishwajit Singh, (iii) AK. Deepanand, (iv) Ch. Shyamson Singh, and (v) T. Tikendra Singh shall execute Zima bond of every Bank Account separately for the up-
Criminal Appeal No. 12 of 2020 Page 6 to-date balance amount found in the Bank Accounts.
iii) in order to enable execution of the said Zima Bonds, the petitioner has to submit up-to-date Bank balance statements of every Bank Account.
The Managers of the concerned Banks are requested to co-operate in issuing Bank statements of the Bank Accounts of the petitioner‟s company.
iv) taking into consideration the smooth operation as well as for compliance of the above conditions, the Bank Accounts related with this case which are to be unfrozen and to be given on zima during the pendency of the case, shall be operated by two members of Board of Director of the Salai Group of Company and Smart Society. One of the signatory should be the present petitioner, E. Brojendro Singh, who is the present Managing Director of the said Company and another one should be from amongst the 4 other members of the Board of Directors of the said Company, namely, (I) N. Biswajit Singh, (ii) AK. Deepanand,
(iii) Ch. Shyamson Singh and (iv) T. Tikendra Singh. The second signatory amongst the above named 4 members of Board of Directors of the company should be in rotation for different Bank Accounts.
"4. It is also ordered and directed that the zimadars i.e. (i) E. Brojendro Singh, (ii) N. Bishwajit Singh, (iii) AK. Deepanand, (iv) Ch. Shyamson Singh, and (v) T. Tikendra Criminal Appeal No. 12 of 2020 Page 7 Singh shall produce the said Zima amounts and Bank Account Book before the Court as and when directed to do so.
"5. The I.O. of the case is however directed to take photocopy of the released Bank Account Books before handing over to the petitioner/zimadars."
The present appeal has been filed by the appellant challenging the aforesaid order.
[10] At the outset, Mr. Kh. Samarjit, learned counsel appearing for the appellant draw our attention to Section 102 of the Cr.P.C. which reads as under:
"102. Power of police officer to seize certain property.-
(1) Any police officer may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence.
(2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer.
[(3) Every police officer acting under sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court [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 where the property seized under sub- section (1) is subject to speedy and natural decay and if the person entitled to the possession of such property is unknown or absent and the value of such property is less than five hundred rupees, it may forthwith be sold by Criminal Appeal No. 12 of 2020 Page 8 auction under the orders of the Superintendent of Police and the provisions of sections 457 and 458 shall, as nearly as may be practicable, apply to the net proceeds of such sale.]"
[11] By referring to Sub-Section (1) of Section 102 of Cr.P.C., it is submitted that any police officer is empowered to seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offences. The learned counsel further submitted that the bank account of the respondent is property within the meaning of section 102(1) of the Cr.P.C. and a police officer in the course of investigation can seize or prohibit the operation of the said account.
In support of his contentions, the learned counsel has placed reliance in the judgment of the Hon'ble Supreme Court in the case of "State of Maharashtra Vs. Tapas D. Neogy" reported in (1999) 7 SCC 685, wherein the Apex Court has held in Para 12 of the judgment that the bank account of the accused or any of his relations is "property"
within the meaning of Section 102 of the Cr.P.C. and a police officer in course of investigation can seize or prohibit the operation of the said account if such assets has direct links with the commission of the offence for which the police officer is investigating into.
[12] The learned counsel for the appellant strenuously submitted that on registration of FIR No. 223(10) 2019 LPS U/S 121/121-(A)/123/153- A/505-(B)/124-A/120-(B) I.P.C., the investigating officer of the case Criminal Appeal No. 12 of 2020 Page 9 sealed the office buildings and freezed the bank accounts of the respondent in connection with the said FIR case for the purpose of investigation.
[13] Mr. Kh. Samarjit, learned counsel for the appellant submitted that during the course of investigation of the case, it was revealed that the respondent through its finance micro division had collected money from people at the rate of 3% interest without any legal authority and it was also revealed that the 3(three) Vice-Chairman of the Salai Group of Companies had ulitised the illegally collected money through micro finance division of Smart Society in the other Salai Companies and thus laundered the money illegally collected thereon.
[14] The learned counsel for the appellant vehemently submitted that even though the accused Mr. Narengbam Samarjit had been removed from the post of Chairman and Managing Director of Salai Group of Companies and Smart Society, the said accused is still found to be amajor share holder of the said Companies and as such there is every possibility that the said accused can still influence the finances of the so called Companies and reopening of Salai offices and de-
freezing/allowing to operate their bank accounts may lead to the tempering with materials evidence and also influencing/threatening the natural witnesses.
[15] It is also submitted by the learned counsel that the investigation is at the critical stage and reopening of Salai offices and de-
Criminal Appeal No. 12 of 2020 Page 10 freezing/allowing to operate their bank accounts will lead to destructions of evidences which will hamper the investigation.
[16] Mr. Kh. Samarjit, learned counsel for the appellant submitted that the Special Court (NIA) allowed the opening of the office buildings and de-freezing of the bank account of the respondent mainly on the ground that the I.O. of the case submitted the report to the Chief Judicial Magistrate(CJM), Imphal West (I.W.) about sealing of the offices and freezing of the bank accounts of the respondent after 26(twenty six) days and also after 7(seven) days of taking over the case by the NIA and that such delay in submitting the report to the competent Court violated the mandatory provisions of Section 102(3) of the Cr.P.C.
In this connection, the counsel for the appellant submitted that Section 102(3) of the Cr.P.C. is not mandatory and non-compliance with the provisions under Section 102(3) cannot vitiate the sealing of the offices and freezing of the bank accounts of the respondent.
[17] In support of his submissions the learned counsel has relied on the judgment dated 10.01.2007 rendered by a learned Single Judge of Punjab and Haryana High Court in the case of "Narottam Singh Dhillon & Anr. Vs. State of Punjab"reported in 2007 SCC Online P & H 20, wherein the learned Single Judge, by referring to the observations made by the Apex Court at Para 37 to 39 of the judgment rendered in "Nasiruddin & Anr. Vs. Sita Ram Agarwal" reported in (2003) 2 SCC 577,had held that Section 102(3) Cr.P.C. cannot be termed as Criminal Appeal No. 12 of 2020 Page 11 mandatory but would be directory in nature. The relevant portion of the said judgment are as under:
"(10) Before proceedings further, it may be seen if the provisions of Section 102(3) Cr.P.C. can be said to be mandatory or directory in nature. It is well understood 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 directory. In other words, it is not every omission or defect which entails the drastic penalty of invalidity. As per Prof. Wade, some conditions may be both mandatory and directory as to substantial compliance, but directory as to precise compliance. Giving example in this regard, Prof. Wade observed that where a local authority was empowered to assess coast protection charges on land owners within six months but did so after twenty-three months, the delay was so excessive that there was total non-compliance with the condition and the assessments were void; but had the axcess been a few ways only, they would probably have been valid. It was observed in Re-Bowman (5) that the Court may readily find reasons for overlooking trivial or unimportant irregularities. It is a question of construction, to be settled by looking at the whole scheme and purpose of the Act and by weighing the importance of the condition, the prejudice to private rights, and the claims of the public interest. It was further observed that in any case judges faced with these questions of construction may regard categories such as mandatory and directory as presenting not so much as stark choice of alternatives but a spectrum of possibilities in which one compartment or description fades gradually into another. Even it is possible for whole areas of statutory law to be treated as merely directory. Requirements which are less substantial, and more like matters of mere formality, may fall on either side of the line. In short, it will depend upon the provisions of the statute. Where the effect is penal scrupulous observance of statutory conditions can normally be required. The Hon‟ble Supreme Court in the case of Nasiruddin and Others V. Sita Ram Agarwal, (6) 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 that the provisions are mandatory in character. Referring to Sutherland, Statutory Construction, 3rd edition, Vol. 3 at p. 107, the Hon‟ble Supreme Court pointed out as under:-
Criminal Appeal No. 12 of 2020 Page 12 "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 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.................. 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 noncompliance with the provision.
At. p. 111 of the above noted edition, it is stated as follows:-
As a corollary of the rule outlined above, the fact that no consequences of noncompliance 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."
(11) Applying the above-noted test to the contents of the provisions of Section 102(3) Cr.P.C., it can be seen that after laying down the requirement of reporting the seizure, the section further itself provides for exception in cases where the property seized is such that it cannot be conveniently transported to the court etc............ The consequences of non-
reporting about the seized property have also 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 therefore have not been specified, it would be safe to say that requirement of Section 102(3) Cr.P.C. cannot be termed as mandatory but would be directory in nature".
[18] Lastly, the counsel for the appellant submitted that under section 8 of the National Investigation Agency Act, 2008, it is provided that while investigating any schedule offence the agency may also investigate any Criminal Appeal No. 12 of 2020 Page 13 other offences which the accused is alleged to have committed if the offence is connected with the schedule offence.
In view of the above, it is strenuously submitted by the learned counsel that the Special Judge (NIA) failed to consider the evolving investigation and its possible impact on the overall summing up of the case by filing the charge sheet and erroneously concluded that certain sections were not mentioned in the FIR for money laundering, etc., which otherwise, could well be investigated by the NIA as provided under Section 8 of the NIA Act, 2008.
The learned counsel for the appellant also submitted a "Sealed Enveloped" alleged to be the revelation/evidences which have come to light during the course of the investigation of the case.
[19] Mr. HS Paonam, learned senior counsel submitted that the FIR has been registered by the OC of Lamphel Police Station Suo Moto, against Mr. Narengbam Samarjit Singh and Yambem Biren Singh alleging that the said 2(two) accused persons have announced in a press conference held in London on 29.10.2019 for separation of the State of Manipur from India and forming Manipur State Council and that the said 2(two) accused persons, who declared themselves as Defence Minister and Chief Minister respectively, announced that they have sought asylum in the United Kingdom (U.K.) and will operate from there, thereby committing offences under Section 121/121-(A)/123/153- (A)/505(B)/124(A) and 120(B) IPC. In the said FIR, the present Criminal Appeal No. 12 of 2020 Page 14 respondent has neither been named as an accuse nor has the Police raised any allegations against the present respondent of committing any offences whatsoever.
[20] It is submitted that the main objection raised by the NIA before the Special Court (NIA) is that Mr. Narengbam Samarjit Singh, former Managing Director of the respondent/Company, is still found to be the major shareholder of the ShellCompanies of the respondent and as such there is every possibility that he can still influence the finances of the companies and therefore, reopening of the offices and de-freezing the bank accounts of the respondent at the critical stage of the investigation may lead to destructions of evidence which will hamper further investigation in the matter.
[21] Mr. HS Paonam, learned senior counsel further submitted that the present respondent is a company registered under the Companies Act and as such it has a distinct legal entity other then the legal entity of Mr. Narengbam Samarjit Singh, who is alleged to be still the major share holder of the respondent/company.Accordingly, it has been submitted that any offences alleged to have been committed by Mr. Narengbam Samarjit Singh in his individual capacity cannot have any link with the respondent company and the respondent company cannot be paralysed or closed down indefinitely by issuing a direction under Section 102 Cr.P.C.only on the ground that one of the major share holders of the company is alleged to be involved in committing some offences.
Criminal Appeal No. 12 of 2020 Page 15 In support of his contentions, the learned senior counsel relied on the judgment rendered by a constitution bench of 5(five) Judges of the Hon'ble Supreme Court in the case of "Electronics Corporation of India Ltd. And Others Vs. Secretary, Revenue Department, Govt. of Andra Pradesh And Others" reported in (1999) 4 SCC 458. The relevant portion of the judgment are as under:
"15. A clear distinction must be drawn between a company and its shareholder, even though that shareholder may be only one and that the Central or a State Government. In the eye of the law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares.
"16. In Western Coalfields Ltd. V. Special Area Development Authority this Court reviewed earlier judgments on the point. It held that even though the entire share capital of the appellant before it had been subscribed by the Government of India, it could not be predicated that the appellant itself was owned by the Government of India. Companies, it was said, which are incorporated under the Companies Act, have a corporate personality of their own, distinct from that of the Government of India. The lands and the buildings in question in that matter were vested in and owned by the appellant. The Government of India only owned the share capital.
"17. In Rustom Cavasjee Cooper V. Union of India It was held: (SCC p. 273, para 11) "11. A Company registered under the Companies Act is a legal person, separate and distinct from its individual members. Property of the Company is not the property of the shareholders. A shareholder has merely an interest in the Company arising under its Articles of Association, measured by a sum of money for the purpose of liability, and by a share in the distributed profit."
"18. In Heavy Engineering Mazdoor Union V. State of Bihar this Court held that an incorporated company has a separate existence and the law recognises it as a juristic person, separate and distinct from its members."
Criminal Appeal No. 12 of 2020 Page 16 [22] The learned senior counsel for the respondent submitted that the Salai Group of Companies was established in the State of Manipur in 2014 and since then many skilled and unskilled labourers were employed and many educated and uneducated youths were deployed and absorbed in the said company. Those individual working in the companies have improved their financial status and could somewhat sustained their living and all these employees of the company were put up in various areas including food processing, edible oil and refinery, banking services, construction works, solar energy solution, marketing of the food processed products, general trading(import and export), etc., inside the State of Manipur. It is also submitted by the learned senior counsel that the Smart Society and Salai Group of Companies had given more than 500(five hundred) jobs to the unemployed youths of Manipur and they were serving sincerely in different subsidiary offices of Salai Group of Companies and Smart Society for the welfare of the company without depending on Government jobs. The activities of the company was highly appreciated by the Chief Minister of Manipur and that many programmes of the company for further expansion and for absorption of more youths in the company are in the pipe line, but unfortunately, it has been delayed due to the present case.
The learned senior counsel further submitted that due to the closure of the offices and freezing of the bank accounts of the respondent in connection with the FIR, the company is in severe Criminal Appeal No. 12 of 2020 Page 17 condition as no financial transaction can be carried out and the smooth functioning of the company has also been gravely hindered. In view of such difficult and severe condition faced by the company and after about 7(seven) months from the date of closing of the offices and freezing of the bank accounts of the respondent, the Director of Salai Agro Products Private Limited submitted an application dated 05.05.2020 to the Superintendent of Police(NIA) requesting for unfreezing some bank accounts of the company. However, the said application was rejected by the Superintendent of Police (NIA) by an order dated 26.05.2020 on the ground that during the course of investigation of the case, it is found that funds were being collected by financial unit of the respondent without Government authorisation and that the authorities believe that the funds so collected was invested to other Salai Group of Companies and the de-freezing of such accounts will hamper the investigation of the case.
[23] It has been contended on behalf of the respondent that the main reasons or objection raised by the NIA in opening of the offices and de-
freezing of the bank accounts of the respondent are that:-
(1) One of the accused i,e, Mr. Narengbam Samarjit Singh is still found to be a major shareholders of the company and there is every possibility that he can still influence the finances of the so called companies and tempering with material evidences;
and Criminal Appeal No. 12 of 2020 Page 18 (2) The respondent through its micro finance division had collected money from people at the rate of 3% interest without any legal authority and that 3(three) Vice-Chairman of Salai Group of Companies had utilised the illegally collected money through micro finance division of Smart Society in other Salai Companies and thus, laundered the money illegally collected thereon.
[24] It is vehemently submitted by Mr. HS. Paonam, learned senior counsel that on examination of the present FIR, the objections raised on behalf of the NIA, the pleadings of the appellant made in their objections dated 29.10.2020 filed in connection with Cril. Misc. Case No. 55 of 2020 and the ground raised by the appellant in the present appeal, no statement or allegation has been made by the appellant that the assets of the respondent including their offices and bank accounts have any link with the offences alleged to have been committed by the accused persons named in the FIR. It is also submitted that even after a thorough investigation of more than 1(one) year from the sealing of the offices and freezing of the bank accounts of the respondent, no materials has been produced by the appellant to show that there is suspicious of having direct link with the seized assets of the respondent and the commission of the offences by the accused persons.
[25] After taking into consideration all the above facts by the Special Court (NIA) including the "Sealed Enveloped" submitted by the appellant Criminal Appeal No. 12 of 2020 Page 19 alleged to be the evidence which has come to light during the course of the investigation of the case, the Special Judge (NIA) allowed the opening of the offices and de-freezing of the bank accounts of the respondent under the order impugned herein. The relevant portions of the impugned order are reproduced hereunder for easy reference:-
"15. The main objections raised by the NIA are that N. Samarjit it still found to be the principal majority shareholder of the said Salai Group of company even though he is alleged to be removed and as such, he can still influence the finances of the so called company established at their instances and may lead to the tampering with material evidences and also influencing/threatening the natural witnesses and the investigation is at a critical stage.
"16. The admitted facts are that the FIR Case No. 223 (10) 2019 LPS U/S 121/121-A/123/153 (A)/505(B)/124(A) and 120(B) IPC was registered suo moto against one Narengbam Samarjit Singh and Yambem Biren Singh on the basis of the reports made in the local newspaper of Manipur dated 30.10.2019 and also other medium of social media that in a conference held in London on 29.10.2019 the said Narengbam Samarjit Singh and Yambem Biren Singh announced for separation of the State of Manipur from India, forming the Manipur State Council and that Narengbam Samarjit declared himself as External Affairs and Defence Minister of Manipur State Council and Yambem Biren Singh as Chief Minister of Manipur State Council and that they sought asylum in the United Kingdom and will operate there.
It is also admitted fact that the said Narengbam Samarjit Singh was working as the Chairman and Manging Director of the Salai Group of company and due to the registration of the FIR case, he was removed from being the Chairman and Managing Director of the Salai Group of company.
"17. Nevertheless, since the registration of the said FIR case and handing over of the case to NIA, it is now about one year has lapsed. On examination of all the materials on record including the documents submitted by the NIA in closed envelope but upto this stage of investigation, I could not find any material to establish the link with the Salai Group of company with the announcement of said N. Samarjit Singh for separation of Manipur State Criminal Appeal No. 12 of 2020 Page 20 from India and forming Manipur State Council and declaring himself as External Affairs and defence Minister of the said Manipur State Council from London where he is seeking asylum. Furthermore, nobody is arrested till date in connection with the above referred case.
Therefore, there is no possibility of influencing the finances of the so called the Salai Group of company, tampering with material evidences and also influencing/threatening the natural witnesses by the said Narengbam Samarjit.
"18. Another objection raised by the NIA is that the SMART Society through its Micro Finance Division had collected money from people at the rate of 3% interest without any legal authority and that the three Vice Chairmen of the Salai Group of companies had utilized the illegally collected money through Micro Finance Division of SMART Society in the other Salai Companies and thus, laundered the money illegally collected thereon.
However, these allegations are not related at all with the present case where the offences charged are under sections 120 B, 121, 121 A, 123, 124(A), 153(A) & 505 (B) IPC and 13 & UA/(P) Act against Narengbam Samarjit and Yambem Biren.
On the other hand, the said Salai Group of company are not in a position to function for the last about 1(one) year thereby resulting to possibility of vanishing the company itself since it affects all its financial transaction completely and also suffered about 500 of its employees which automatically affect all the family members of the sad 500 employees.
"19. Over and above, the petitioner has also alledged that on 02-11-2019 the main office building as well as its Sub-Offices situated in different places of Imphal were sealed by the I.O. of the case and since then those offices could not be functioned."
[26] The learned senior counsel submitted that as there is no allegation or material to show that there is suspicion of having any direct link with the assets of the respondent and the commission of the offences by the accused persons for which the authorities are Criminal Appeal No. 12 of 2020 Page 21 investigating into, the investigating officer has acted beyond his power and jurisdiction in sealing the offices and freezing the bank accounts of the respondent and such acts of the investigating officer are illegal and in contravention of the provisions under Section 102 of the Cr.P.C.
In support of his contentions, the learned senior counsel has placed reliance inthe judgment of the Hon'ble Supreme Court in the case of "M.T. Enrica Lexie And Another Vs. Doramma And Others"
reported in (2012) 6 SCC 760 and in Para No. 14 of the Judgment the Apex Court has held as under:-
"14. The police officer in course of investigation can seize any property under Section 102 if such property is alleged to be stolen or is suspected to be stolen or is the object of the crime under investigation or has direct link with the commission of offence for which the police officer is investigating into. A property not suspected of commission of the offence which is being investigated into by the police officer cannot be seized. Under Section 102 of the Code, the police officer can seize such property which is covered by Section 102(1) and no other."
[27] In the case of "Nevada Properties Private Limited through its Director Vs. State of Maharashtra & Another" reported in (2019) SCC Online SC 1247 a constitution bench of 3(three) Judges of the Apex Court held that the power of police officer under Section 102 of the Cr.P.C. to seize any property, which may be found under circumstances that create suspicion of the commission of any offences, would not include the power to attach, seize and sealed an immovable property.
The relevant Para 18 to 21 of the said judgment are as under:-
Criminal Appeal No. 12 of 2020 Page 22 "18. Having held and elucidated on the power of the Criminal Court, we find good ground and reason to hold that the expression „any property‟ appearing in Section 102 of the Code would not include immovable property. We would elucidate and explain.
"19. The first part of sub-section (1) of Section 102 of the Code relates to the property which may be alleged or suspected to have been stolen. Immovable property certainly cannot be stolen and cannot fall in this part. The second part relates to the property which may be found by a police officer under circumstances which create suspicion of the commission of any offence. We have already referred to the judgments of the Delhi High Court in the case of P.K. Parmar (supra), Ms. Swaran Sabharwal (supra), and Jagdish Chander (supra), which have elucidated and in a restricted and narrow manner defined the requirement for invoking the second part. However, we have come across a decision of this Court in Teesta Atul Setalvad V. State of Gujarat, on an appeal from the judgment of the Gujarat High court and had dealt with a situation when an act of freezing the accounts was a sequel to the crime as the crime was detected earlier. The Gujarat High Court took a somewhat contrary view, by not interfering and directing defreezing, observation that even if the action of the investigating agency at the inception to seize may not be regular, the Court cannot be oblivious to the collection of substantial material by the investigating agency which justifies its action under Section 102 of the Code. Further when the investigation had progressed to a material point, de-freezing the bank accounts on the basis of such arguments would paralyse the investigation which would not be in the interest of the justice. After referring to the factual matrix in Teesta Atul Setalvad (supra), this Court observed that the Investigating Officer was in possession of material pointing out to the circumstances that had created suspicion of the commission of an offence, in particular the one under investigation, and therefore exercise of power under Section 102 of the Code would be in law legitimate as it was exercised after following the procedure prescribed in sub-sections (2) and (3) of the same provision.
"20. Section 102 postulates seizure of the property. Immovable property cannot, in its strict sense, be seized, though documents of title, etc. relating to immovable property can be seized, taken into custody and produced. Immovable property can be attached and also locked/sealed. It could be argued that the word „seize‟ would include such action of attachment and sealing. Seizure of immovable property in this sense and manner would in law require dispossession of the person in occupation/possession of the immovable property, unless there are no claimants, which Criminal Appeal No. 12 of 2020 Page 23 would be rare. Language of Section 102 of the Code does not support the interpretation that the police officer has the power to dispossess a person in occupation and take possession of an immovable property in order to seize it. In the absence of the Legislature conferring this express or implied power under Section 102 of the Code to the police officer, we would hesitate and not hold that this power should be inferred and is implicit in the power to effect seizure. Equally important, for the purpose of interpretation is the scope and object of Section 102 of the Code, which is to help and assist investigation and to enable the police officer to collect and collate evidence to be produced to prove the charge complained of and set up in the charge sheet. The Section is a part of the provisions concerning investigation undertaken by the police officer. After the charge sheet is filed, the prosecution leads and produces evidence to secure conviction. Section 102 is not, per se, an enabling provision by which the police officer acts to seize the property to do justice and to hand over the property to a person whom the police officer feels is the rightful and true owner. This is clear from the objective behind Section 102, use of the words in the Section and the scope and ambit of the power conferred on the Criminal Court vide Sections 451 to 459 of the Code. The expression „circumstances which create suspicion of the commission of any offence‟ in Section 102 does not refer to a firm opinion or an adjudication/finding by a police officer to ascertain whether or not „any property‟ is required to be seized. The word „suspicion‟ is a weaker and broader expression than „reasonable belief‟ or „satisfaction‟. The police officer is an investigator and not an adjudicator or a decision maker. This is the reason why the Ordinance was enacted to deal with attachment of money and immovable properties in cases of scheduled offences. In case and if we allow the police officer to „seize‟ immovable property on a mere „suspicion of the commission of any offence‟, it would mean and imply giving a drastic and extreme power to dispossess etc. to the police officer on a mere conjecture and surmise, that is, on suspicion, which has hitherto not been exercised. We have hardly come across any case where immovable property was seized vide an attachment order that was treated as a seizure order by police officer under Section 102 of the Code. The reason is obvious. Disputes relating to title, possession, etc., of immovable property are civil disputes which have to be decided and adjudicated in Civil Courts. We must discourage and stall any attempt to convert civil disputes into criminal cases to put pressure on the other side (See Binod Kumar V. State of Bihar). Thus, it will not be proper to hold that Section 102 of the Code empowers a police officer to seize immovable property, land, plots, residential houses, streets or similar properties. Given the Criminal Appeal No. 12 of 2020 Page 24 nature of criminal litigation, such seizure of an immovable property by the police officer in the form of an attachment and dispossession would not facilitate investigation to collect evidence/material to be produced during inquiry and trial. As far as possession of the immovable property is concerned, specific provisions in the form of Section 145 and 146 of the Code can be invoked as per and in accordance with the law. Section 102 of the Code is not a general provision which enables and authorises the police officer to seize immovable property for being able to be produced in the Criminal Court during trial. This, however, would not bar or prohibit the police officer from seizing documents/papers of title relating to immovable property, as it is distinct and different from seizure of immovable property. Disputes and matters relating to the physical and legal possession and title of the property must be adjudicated upon by a Civil Court.
"21. In view of the aforesaid discussion, the Reference is answered by holding that the power of a police officer under Section 102 of the Code to seize any property, which may be found under circumstances that create suspicion of the commission of any offence, would not include the power to attach, seize and seal an immovable property."
By placing reliance on the aforesaid judgment of the Hon'ble Supreme Court, the learned senior counsel for the respondent submitted that seizure and sealing of the offices of the respondent, which are all immovable properties, by the investigating officer of the case in connection with the FIR is illegal, without power and jurisdiction and in contravention of the provisions of section 102 of the Cr.P.C.
[28] After giving our anxious consideration to the submissions advanced by the counsel for the parties and after careful consideration of all the material available on record and also the documents submitted by the learned counsel for the appellant before this Court under Sealed Cover, alleged to be the evidences which come to light during the course of investigation of the case, we do not find any materials or Criminal Appeal No. 12 of 2020 Page 25 circumstances which create suspicion of having any direct link with the seized assets of the respondent and the commission of the alleged offences for which the investigating officer is investigating into.
Accordingly, we have no hesitation to hold that the investigating officer has acted illegally and in contravention of the provisions of section 102 Cr.P.C. in seizing/sealing of the offices and in freezing the bank accounts of the respondent.
We are also in agreement with the submissions advanced by Mr. HS. Paonam, learned senior counsel that the respondent company cannot be paralised or closed down by issuing a direction under section 102 Cr.P.C. indefinitely only for the reason that one of his share holders are alleged to be involved in commission of some offences.
[29] In view of the foregoing reason, we do not find any ground or justification for interfering with the impugned order dated 02.11.2020 passed by the Court of Special Court (NIA), Manipur in Cril. Misc. Case No. 55 of 2020 and accordingly, we dismissed the present appeal as being devoid of merit, however, without any costs.
JUDGE JUDGE FR/NFR Lhaineichong Criminal Appeal No. 12 of 2020 Page 26