Mohd. Maqbool Ahmed @ Mateen and anr. Vs. the Deputy Commissioner of Police, Special Investigation Team and ors. - Court Judgment

M.N. Rao, J.

1. The question for our decision in this writ petition, referred to a Division Bench by our learned brother C.V.N. Sastry, J., on the ground that it involves an important question, is: whether Section 102 Cr.P.C, empowers a Police Officer to freeze the bank account of a person suspected to be involved in the commission of an offence?

2. The first petitioner is the husband of the second petitioner. They are intimately associated with a firm by name Matchless Travel Bureau, Hyderabad. Petitioner No. 1 is the Executive Director and the second petitioner, his wife, is one of the partners. The firm is an approved agent of I.A.T.A. (International Air Transport Association). It is stated that all the Airlines extend credit facilities to the approved agents. The firm's main business is to book air tickets to foreign countries.

3. Petitioners 1 and 2 are figuring as A-2 and A-4 in Crime No. 170/95 of the Saidabad Police Station, Hyderabad registered Under Sections 465, 471 and 420 of the Indian Penal Code, Sections 3 and 4 of the Passports Act and Section 25 of the Emigration Act. In the remand report submitted before the XV Metropolitan Magistrate by the Inspector of Police (Foreigners Branch) Special Branch, Hyderabad, it is alleged, inter alia, that one Mohd. Ibrahim Ali (A-1 in Cr.No.170/95) travelled on a ticket sold by the firm from Hyderabad to Montreal. At the London Airport, it was detected by the Immigration authorities that A-1 was in possession of a forged Canadian Immigrant Visa No. W-0174367883 and a forged Canadian admission stamp on page No. 20 of his passport. Due to reasons beyond the control of the Air India, the passenger (A-1) was forced to travel further to New York on purely technical grounds and on arrival at the John F. Kennedy Airport, New York, the U.S. Immigration authorities confirmed that the Visa for Canada was a forged one and so, he was deported back to Bombay in India. After A-1 was brought back to Bombay, he confessed that the petitioner No.1 (A-2) and one Syed Hussain alias Asif (A-3) promised him a 'safe haven' in New York for a consideration of a total amount of Rs. 3,25,000/-, out of which Rs. 1,25,000/- was already paid at Hyderabad prior to his departure and the balance of Rs. 2,00,000/- was to be paid after his reaching New York. He also disclosed that his elder brother Mujeeb-ur-Rahman was settled in New York engaging in business and his ultimate destination was New York. The air-ticket as well as the Canadian Immigrant Visa were arranged by A-3 and A-2 (petitioner No. 1) after receiving a sum of Rs. 1,25,000/-, from A-1. The case is still under investigation; the charge-sheet has not yet been filed.

4. The petitioner No. 1 is an account holder in the State Bank of Hyderabad, Debeerpura Branch - Current A/c.No.2/160 - and the second petitioner has a Savings Bank Account- No. 4283 -with the Indian Overseas Bank, Basheerbagh Branch, Hyderabad. In the course of the investigation, it appeared, the police served letters upon the respective Bank Managers freezing the Bank accounts of the petitioners and this fact was informed by the Managers of the respective Banks to the petitioners herein. Challenging the same, the present writ petition was filed.

5. Sri Narasimha Reddy, learned Counsel for the petitioners, has urged that the police has no power Under Section 102 Cr.P.C, the only provision which enables the police to seize property during the investigation of a crime, to freeze the bank accounts of persons alleged to be involved in the commission of an offence. The bank accounts in question have nothing to do with the crime under investigation. The money in the accounts of the petitioners is not the subject matter of investigation and the second petitioner, although a partner of the firm, has nothing to do with the alleged offence.

6. Countering these contentions, Sri Sadasiva Reddy, learned Government Pleader for Home; has argued that any property involved or suspected to be involved or relatable to any crime under investigation can be seized by the police Under Section 102 Cr.P.C. The bank accounts in question are suspected by the police to be the proceeds of the money collected by the firm from A-1 for the ticket sold, which was found to have been a 'stolen ticket' from the United States of America.

7. Section 102 Cr.P.C., reads:

'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, 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 give effect to the further orders of the Court as to the disposal of the same.'

There is little doubt that money in the bank account of an account holder is his property. He has control over it in the sense that at any time he can withdraw the same. The crime under investigation concerns the alleged sale of an air-ticket by the firm to A-1 for a consideration of Rs. 1,25,000/- and that ticket, according to the assertion in the counter-affidavit, is not a genuine one - it was stolen from the United States of America. A-1, who purchased the ticket, was in possession of a forged Visa, which again was arranged by the firm, of which the Executive Director is the first petitioner (A-2) and one of the partners is his wife, the second petitioner (A-4). The money in deposit in the accounts of A-2 and A-4 in the two banks, according to the police, has a nexus with the crime in question. Whether it is a direct link or the link is remote are matters for decision at the trial of the case. As even the charge-sheet is not filed, it is premature to predicate on the nature of the link between the bank accounts and the sale of the air-ticket and the arrangement of Visa.

8. In two eventualities, a police officer, acting Under Section 102(1) Cr.P.C, may seize any property (i) alleged or suspected to have been stolen; or (ii) found under drcusmtances creating suspicion of commission of an offence. The finding of property need not always precede the suspicion of commission of an offence in relation to that property. Once it is suspected by a police officer that a crime has been committed and in the course of the investigation, he-comes across any property, which is involved or suspected to have been involved or has any link with the crime under investigation, in our view, he has power to effect seizure of that property under Sub-section (1) of Section 102 Cr.P.C. Any other interpretation would be totally unrealistic and frustrate the attempts of the investigating agency to effectively detect the crimes.

9. The alleged forged visa and the stolen air-ticket are not the only properties concerning the crime in question, as sought to be contended by Sri Narasimha Reddy for the petitioners. The suspicion of commission of the offence is also linked with the bank accounts of the two petitioners as the firm collected consideration for the ticket sold apart from the accusation that the understanding was A-1 was to pay Rs. 3,25,000/- by way of consideration for the air-ticket as well as for arranging a Visa.

10. There is divergence of opinion among the High Courts of Allahabad, Textile Traders Syndicate v. State of U.P : AIR1960All405 , Karnataka, Malnad Construction Co. v. State of Karnataka (1994(1) ALT (Crl.) 119) Gauhati, Purbanchal Road Service, Gauhati v. The State (1991 (3) Crl.L.J. 2798) and Delhi, Swaran Sabarwal v. Commissioner of Police (1988 (1) Crl.L.J. 241) on the one hand and the High Court of Madras, Bharat Overseas Bank v. Minu Publications (1988 (2) Crimes 156) on the other as to the power of the police to freeze bank accounts Under Section 102 Cr.P.C. Section 102 of the Code of Criminal Procedure, 1973 corresponds to Section 550 of the Code of Criminal Procedure, 1898.

11. In Textile Traders Syndicate (1 supra), in the course of the investigation of a crime registered Under Sections 420 and 406 I.P.C., an order was issued Under Section 550 Cr.P.C, seizing the amount to the credit of the account of the accused in the Punjab National Bank and the communication in this regard expressly recited that the 'investigation has revealed that the above mentioned firm (Textile Traders Syndicate - the accused) is a bogus one and the amount to its credit in your bank has been earned by committing offences of cheating etc.' A learned single Judge of the Allahabad High Court while adverting to certain other provisions of the Cr.P.C, where the word 'seizure' has been used including Section 103 Cr.P.C. held:

'.... it is obvious that it (seize) could only mean the act of taking actual physical possession of the property capable of being so possessed.'

Viewed from that angle, the learned Judge felt that the prohibitory order issued has not resulted in the seizure of any amount, 'in fact, there appears to have been no amount or money' which could have been seized. 'When the applicant opened an account with the bank, he gave some money to the bank. The money could not be claimed by him in specie. The money could be utilized by the bank in any manner it likes. The only liability which the bank undertook was that it agreed that whenever the applicant demanded, it would pay him an equivalent sum either in full or in part'. The learned Judge further held:

'The bank really became a debtor of the applicant to that extent. It was not necessary for it to keep any money always in hand in anticipation of any demand to be made by the applicant. When the applicant actually made a demand it could procure the necessary amount from anywhere and pay it to the applicant. In the circumstances, it cannot be said that mere was any 'property with the bank of which actual physical possession could be taken. Section 550 does not appear to contemplate a police officer prohibiting the payment of a debt by a debtor to the accused person.'

The Karnataka and Gauhati High Courts (2 and 3 supra) agreed with this reasoning. But the Karnataka High Court was of the view that Under Section 102(1) Cr.P.C, a locker in a bank in the name of an accused can be seized. According to the learned Judge:

'......a Police Officer has certainly power to seize any property coming within the purview of Section 102(1) of the Code and nothing prevents a Police Officer to effect seizure of any property even in a bank relating to an accused, if it is required, including a locker in a bank and the articles in it. 'Seizure' and prohibitory order' are not one and the same, while the former is covered by Section 102(1) of the Code and the latter not.'

The rulings of the Gauhati and Karnataka High Courts were rendered by learned single Judges. A Division Bench of the Delhi High Court in Swaran Sabarwal (4 supra) interpreted Section 102 Cr.P.C, as implying that discovery of property should precede the suspicion of commission of an offence. In that case, the basis for issuing the prohibitory order was found to be factually untrue. The persons whose bank accounts were sought to be seized were not figuring as accused in any crime and the entire action was grounded on a misconception as to the identity of the real culprit. While holding that the prohibitory order disclosed no valid or relevant reason and that it was a result of non-application of mind, the Division Bench proceeded further to interpret Section 102 Cr.P.C:

'.....we are not quite sure whether monies deposited in a bank account can be seized by means of a prohibitory order as has been done in the present case under the provisions of Section 102. But assuming that a bank account is 'property' within the meaning of the section, it should be property 'found under circumstances which create the suspicion of the commission of an offence' to justify action Under Section 102. In other words, it applies where a police officer conies across certain property in circumstances which create in his mind a suspicion that an offence has been committed......The position here is different. Here it is not the discovery of the property that has created the suspicion of an offence. There are no circumstances attendant upon the bank account or its operation that have led officer to suspect that some offence has been committed somewhere. The discovery of the bank account here is a sequel to the discovery of the commission of the offence. The police suspect that some of the proceeds realised by the sale of official secrets have been passed on to the petitioner by her husband. This we think is not sufficient to attract Section 102 as it cannot be since that the bank account has been traced or discovered in circumstances which have made the police aware of the commission of an offence.'

12. With great respect, we are unable to agree with the views expressed by the Allahabad, Karnataka, Gauhati and Delhi High Courts. After the decision of Allahabad High Court, came the ruling of the Supreme Court in R.K. Dalmia v. Delhi Administration, : [1963]1SCR253 . The crimes in question in the aforesaid case related to transactions of sale and purchase of securities held by Bharat 'Insurance Company. The securities were sold to a broker and the price obtained from the sale was utilised in purchasing formally further securities which were not received. The purchase transactions also followed the same pattern. The funds of the company spent ostensibly on the purchase of securities ultimately reached another company. The securities purchased were in fact not delivered but cheques in payment of the purchase price were issued. One of the contentions urged was that no offence of criminal breach of trust was committed as the funds of the Insurance Company with the bank do not come within the expression 'property' in Section 405 I.P.C. Rejecting the contention, the Supreme Court, relying upon the definition of the expression 'movable property' occurring in Section 22 of the Indian Penal Code and while expressing the opinion that the word 'property' is used in the Indian Penal Code 'in a much wider sense than the expression 'movable property', held that the word 'property' 'in a particular section covers only that type of property with respect to which offences contemplated in that section can be committed'. The Supreme Court further observed:

'The expression 'funds' in the charge is used in the first sense meaning thereby that Dalmia and Chokhani had dominion over the amount credited to the Bharat Insurance Company in the accounts of the Bank, inasmuch as they could draw cheques on that account.'

This decision is, therefore, an authority for the proposition that funds standing to the credit of a person in his bank account, in respect of which he has dominion, constitutes 'property' and that 'the word property in a particular section covers only that type of property with respect to which offences contemplated in that section can be committed'.

13. Viewed in the light of the legal position enunciated by the Supreme Court, the bank accounts of both the petitioners herein are 'property' within the meaning of Section 420 I.P.C., one of the offences for which the petitioners are sought to be prosecuted, and, therefore, the same can legitimately be seized Under Section 102 Cr.P.C. The High Courts of Gauhati, Karnataka and Delhi have not noticed the aforesaid binding precedent and so we express our inability to agree with the opinions expressed by those High Courts.

14. In the case decided by the Madras High Court - Bharat Overseas Bank (5 supra), the accused person was an officer in the Bharat Overseas Bank and the accusation against him was that he fraudulently collected large sums of money from the branches of the Bank through accounts opened in the names of fictitious persons by forging credit advices and the investigation revealed that the accused had opened several accounts in the names of himself and his family members in banks and other institutions in which he credited the amounts so collected by him. The orders issued to the banks seizing his accounts were challenged. After noticing the decision of the Supreme Court in R.K. Dalmia (6 supra) and certain other rulings, the Madras High Court held that bank account is 'property' capable of being seized Under Section 102 Cr.P.C. by the investigating officer. The learned Judge expressed the view:

'When corporeal tangible property is seized by taking physical possession and producing it in Court, the seizure is intended to have the effect of preventing the person from whom it is seized from exercising any acts of ownership or possession over that property......The only way, in which such an effect can be brought about, regarding bank balance is to issue a prohibitory order, restraining the customer from operating his account in the bank, either by remittance or by withdrawal. This act of preventing the customer from exercising any right over the bank balance constitutes seizure of the bank balance, which in ordinary parlance is described as 'freezing'. The consequences that flow from freezing a bank balance following a prohibitory order, are the same, as those that flow from the physical removal of any moveable property, following a seizure'.

We entirely agree with this. On the question as to the failure on the part of the police officer to report the seizure to the jurisdictional Magistrate as required by Sub-section (3) of Section 102 Cr.P.C, the learned Judge held:

'Not every flaw in investigation, would invalidate proceedings. It would be premature now, to judge prejudice caused to the accused. If the second respondent has not reported about the seizure to the Court yet, he shall do the same forthwith. In the event of a trial, it would be open to the accused to put forward this plea of prejudice in the light of the facts available.'

In our considered opinion, this is the correct legal position. So far as the present case is concerned, there is no allegation in the affidavit filed in support of the writ petition that the requirement of Sub-section (3) of Section 102 Cr.P.C., was breached. For the first time in the reply affidavit, this plea was taken and the learned Government Pleader contends, rightly, that the averments in the reply affidavit cannot be the basis for the writ petition. Even assuming that mere was non-compliance of the requirement of Sub-section (3) of Section 102 Cr .P.C., in that the police officer has not informed the jurisdictional Magistrate about the factum of seizing of the bank accounts of the petitioners herein, such a course of action would not invalidate the order passed Under Sub-section (1) of Section 102 Cr.P.C, freezing the bank accounts. We make it clear that it is always open to the petitioners to move the criminal Court after the charge-sheet is filed for appropriate orders as to the handling of bank accounts and the criminal Court will pass suitable orders in the light of the fact situation.

15. Subject to the aforesaid observations, the writ petition is dismissed. No costs.