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2018 DIGILAW 1471 (GAU)

Rahul HI Rise Ltd. v. State of Assam

2018-10-01

UJJAL BHUYAN

body2018
JUDGMENT : Ujjal Bhuyan, J. 1. Heard Mr. K. Agarwal, learned Senior counsel for the petitioners and Mr. A. Chakraborty, learned Govt. Advocate, Assam. 2. By filing this petition under Article 226 of the Constitution of India, petitioners seek quashing of notices dated 28.05.2011 and 20.09.2011 and further seek a direction to the respondents not to take any coercive steps against the petitioners pursuant to the aforesaid notices. 3. According to the petitioners, petitioner No. 1 is a company incorporated under the Companies Act, 1956 having its registered office at Kolkata. Petitioner No. 2 is one of the Directors of petitioner No. 1. Petitioner No. 1 is engaged in construction and infrastructure business. 4. In the month of September, 2011, petitioners received a letter dated 20.09.2011 issued by the Superintendent of Police, Barpeta addressed to the Chairman and Managing Director of petitioner No. 1 stating that a complaint was received against petitioner No. 1 of being involved in cheating and fraud by collecting deposits from the general public of Barpeta district. Notice issued to petitioner No. 1 could not be delivered in the registered address. Therefore, Chairman and Managing Director was directed to appear in person before the Superintendent of Police with relevant documents relating to business of the company in collecting deposits from the public. It was stated that if such letter was not responded to, proceedings under Section 102 of the Code of Criminal Procedure, 1973 (Cr.PC) would be completed and jurisdictional Magistrate would be requested to direct the concerned banks where accounts of the petitioners were frozen to deposit the money in the Government treasury besides request for issuing non-bailable warrant of arrest. 5. After enquiry, petitioners could come to know that Superintendent of Police, Barpeta had written to the Branch Manager, Axis Bank, Barpeta Road, i.e., respondent No. 4 on 28.05.2011 stating that a complaint of cheating and fraud by petitioner No. 1 was received. According to the complainant, such proceeds of cheating were deposited in the two accounts maintained by petitioner No. 1 in the bank. The two accounts were:- "396010200008556, Axis Bank, Cooch Behar, 442010200006262, Axis Bank, Jalpaiguri." 5.1. Respondent No. 4 was requested to provide transaction details of the said two bank accounts and also to freeze the two accounts until de-freezing order was passed by the Superintendent of Police. The two accounts were:- "396010200008556, Axis Bank, Cooch Behar, 442010200006262, Axis Bank, Jalpaiguri." 5.1. Respondent No. 4 was requested to provide transaction details of the said two bank accounts and also to freeze the two accounts until de-freezing order was passed by the Superintendent of Police. It was stated that the above request was in tune with the requirement of Section 91 Cr.PC read with Section 36 thereof. 6. As would be evident from the above, the two accounts were maintained in the Axis Bank, Cooch Behar Branch and Axis Bank, Jalpaiguri Branch, both outside the State of Assam and outside the jurisdiction of Superintendent of Police, Barpeta. 7. It is primarily the legality and correctness of the notice dated 28.05.2011, which is under challenge in the present proceeding. 8. This Court by order dated 11.01.2012 had issued notice with the observation that any action taken against the petitioners by the respondents would be only in accordance with law. 9. Respondent No. 3, i.e., Superintendent of Police, Barpeta has filed affidavit. In his affidavit filed on 01.11.2014, it is stated that as per message received from Superintendent of Police, BIEO dated 09.03.2011, petitioner No. 1 was included in the list of companies involved in collection of deposits by promising fabulous returns. A letter was received from one Har Kishore Choudhury alleging that petitioner No. 1 was doing business without valid documents and siphoning off the money collected. 9.1. On receipt of such letter, respondent No. 3 enquired into the matter by treating the said letter as first information under Section 154(3) Cr.PC. It is stated that enquiry revealed reasonable suspicion of commission of an offence by the petitioners because of which impugned letter dated 28.05.2011 was written to the Axis Bank and similar letter was written to the State Bank of India for freezing of the bank accounts of the petitioners which it is stated is well within the powers of the Superintendent of Police under Section 102 Cr.PC. It is also stated that after freezing of the bank accounts, it was reported to the Magistrate having jurisdiction. It is further stated that petitioners had closed down their office at Barpeta Road in May, 2011 and had removed the employees in July, 2011. It is further stated that Barpeta Road Police Station Case No. 136/2011 under Sections 420/406 IPC has been registered, investigation of which was carried out. It is further stated that petitioners had closed down their office at Barpeta Road in May, 2011 and had removed the employees in July, 2011. It is further stated that Barpeta Road Police Station Case No. 136/2011 under Sections 420/406 IPC has been registered, investigation of which was carried out. Thereafter, charge-sheet was submitted on 31.12.2013.. 10. Petitioners have filed a detailed reply affidavit. It is stated that Shri Diptendu Banerjee, Chairman and Managing Director of petitioner No. 1 and petitioner No. 2 had filed petitions for anticipatory bail before this Court which were granted. Informant of Barpeta Road Police Station Case No. 136/2011 had deposited an amount of Rs. 300/- only in the month of March, 2011. Petitioner No. 1 had repaid all its investors from Barpeta district and there is no outstanding dues as on date. 11. From the documents on record, it is seen that letter written by Har Kishore Choudhury to the Superintendent of Police, Barpeta on 25.05.2011 was treated as FIR and on the basis of the same, Barpeta Road Police Station Case No. 136/2011 was registered under Sections 406/420 IPC. 12. Shri Diptendu Banerjee had filed anticipatory bail application i.e., AB No. 16/2012 whereas Shri Abhijeet Mazumdar had filed AB No. 17/2012. Initially, interim anticipatory bail were granted to the two of them. On 21.06.2012, learned counsel representing the informant informed the Court that informant had deposited a sum of Rs. 300/- with petitioner No. 1 in the month of March, 2011. He was not interested in making further investment and only wanted that his invested amount of Rs. 300/- be returned to him. Considering all aspects, the two anticipatory bail petitions were allowed and the petitioners were allowed to remain on previous bail. 13. Mr. Agarwal, learned Senior counsel for the petitioners, argued that Sections 91 and 36 Cr.PC are general provisions and cannot be invoked by the Superintendent of Police to freeze bank accounts. Referring to Section 102 Cr.PC, he submits that until and unless seizure of goods is reported by the police to the jurisdictional Magistrate, such seizure will be illegal. Besides, Magistrate will have no jurisdiction in the matter. Referring to Section 102 Cr.PC, he submits that until and unless seizure of goods is reported by the police to the jurisdictional Magistrate, such seizure will be illegal. Besides, Magistrate will have no jurisdiction in the matter. Though respondent No. 3 has made a statement in paragraphs 6, 13 and 19 that after freezing of the bank accounts, it was reported to the Magistrate having jurisdiction, such statements are totally vague and without support of any document to that effect, cannot be accepted. He further submits that Shri Prithvi Pal Singh who had sworn the affidavit on 01.11.2014 was not Superintendent of Police, Barpeta when the two bank accounts of the petitioners were seized on 28.05.2011. Therefore, above statements which have been verified to be true to his knowledge are unacceptable. There are no specific averments in the affidavit as to when the information was forwarded and to which Magistrate. In the absence thereof, such vague statements cannot be accepted. 13.1. Mr. Agarwal has also submitted a synopsis of submissions and relied upon a number of decisions in support of his submissions. 14. On the other hand, Mr. Chakraborty, learned Govt. Advocate, Assam has justified the impugned action taken by the Superintendent of Police, Barpeta. 15. Submissions made by learned counsel for the parties have been considered. Also perused the materials on record. 16. At the outset, it would be apposite to extract the impugned notice dated 28.5.2011 which is as under:- "To The Branch Manager, Axis Bank, Barpeta Road. Sub: Investigation into the complaint received alleging cheating and fraud by Rahul High Rise Ltd. Ref: General Diary Entry No. 1644 Barpeta PS dated 28.05.2011. Sir, A complaint was received alleging cheating and fraud by Rahul High Rise Ltd. The complainant also alleges that the proceeds of cheating are lodged in the following bank accounts. In order to proceed with necessary legal action the undersigned require the transaction details of the following bank accounts since 01.01.2009. Hence, it is requested that the transaction details of the following bank accounts may be provided. If the data is voluminous it can be provided as soft copy. Also requested to 'freeze the following accounts' until the undersigned requests you to release the same. The request is in tune with Section 91 of the Code of Criminal Procedure, 1973 read with Section 36 of the same Act. If the data is voluminous it can be provided as soft copy. Also requested to 'freeze the following accounts' until the undersigned requests you to release the same. The request is in tune with Section 91 of the Code of Criminal Procedure, 1973 read with Section 36 of the same Act. If you are not the competent authority to do the same, it is hereby requested to forward this to the competent authority by quickest means for necessary action. The Bank accounts are: A/C holder A/C No. Branch Rahul High Rise Ltd. 396010200008556 Axis Bank, Cooch Behar, Rahul High Rise Ltd. 442010200006262 Axis Bank Jalpaiguri The matter may be kept confidential until the required legal action is done as the accused persons may withdraw the money and go aloof if the information is leaked out." 17. From a careful perusal of the impugned notice as extracted above, it is seen that Superintendent of Police, Barpeta had acted on a complaint which alleged cheating and fraud by petitioner No. 1 and that proceeds of cheating were lodged in the two bank accounts. In order to take necessary legal action, Superintendent of Police required the transaction details. Therefore, Branch Manager was requested to provide transaction details of the two bank accounts and also requested freezing of the two accounts till request to release the same was made. It was stated that this request was in tune with Sections 91 and 36 of the Cr.PC. 18. Section 91 deals with summons to produce documents or other things. It says that whenever any Court or any officer-in-charge of a police station considers that the production of any document or other thing is necessary or desirable for the purpose of any investigation, enquiry, trial or other proceedings, then such Court may issue summons or such officer may issue a written order to the person in whose possession or power such document or thing is believed to be, requiring him to attend and produce it at the time and place mentioned in the summons or order. 19. 19. Therefore, from a reading of Section 91, it is evident that while a police officer certainly has the power to direct production of any document or other thing necessary or desirable for the purpose of any investigation or enquiry, this provision cannot be invoked for seizure of bank account as no such power has been conferred on a police officer under the said section. 20. In so far Section 36 is concerned, which is a general provision, it says that a police officer superior in rank to an officer-in-charge of a police station may exercise the same powers throughout the local area to which they are appointed as may be exercised by such officer within the limits of his station. However, what is important to note is that such coterminous power is confined to the local area within the limits of the station of the subordinate officer. 21. At this stage, provisions contained in Section 102 Cr.PC may be adverted to. For ready reference, Section 102 Cr.PC is quoted hereunder:- "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. (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 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." 22. A careful analysis of Section 102 Cr.PC would reveal that power to seize any property can be exercised if the police officer is of the view that it was alleged or suspected to have been stolen or found under circumstances which create suspicion of the commission of any offence. This is the sine-qua-non for invoking the power to seize property. If seizure was made by a subordinate officer, he is required to forthwith report seizure to his superior officer. However, every police officer is required under the law to forthwith report seizure to the Magistrate having jurisdiction. Thus, Section 102 visualises two requirements - one preseizure and one post-seizure. This is the sine-qua-non for invoking the power to seize property. If seizure was made by a subordinate officer, he is required to forthwith report seizure to his superior officer. However, every police officer is required under the law to forthwith report seizure to the Magistrate having jurisdiction. Thus, Section 102 visualises two requirements - one preseizure and one post-seizure. As discussed above, pre-seizure requirement which is the sinequa-non for invocation of the power is the allegation or suspicion that the property is stolen or that it was found in such circumstances creating suspicion of the commission of any offence. After seizure is made, factum of seizure has to be reported by the police officer to the jurisdictional Magistrate forthwith. 23. In State of Maharastra Vs. Tapas D. Neogy, (1999) 7 SCC 685 , Supreme Court has held that bank account of the accused or that of his relations is 'property' within the meaning of Section 102 Cr.PC and a police officer in the course of investigation can seize or prohibit operation of the said account if such assets have direct links with the commission of the offence which the police officer is investigating into. 24. Explaining the provision, Supreme Court in M.T. Enrica Lexie Vs. Doramma, (2012) 6 SCC 760 , held that a property not suspected of commission of the offence which is being investigated by the police officer cannot be seized. 25. Madras High Court in B. Ranganathan Vs. State, 2003 Cri.L.J 2779, is of the view that in case of seizure of a bank account, the police officer should do two things - firstly, he should inform the concerned Magistrate forthwith regarding the prohibitory order; secondly, he should also give notice of seizure to the accused and allow him to operate the bank account subject to execution of a bond to produce the amount in question before the Court as and when required. An order under Section 102 Cr.PC without following the above procedure would be liable to be set aside. 26. Bombay High Court in Dr. Shashikant, D. Karnik Vs. State of Maharashtra, 2008 Cri.LJ 148, has held that Section 102 Cr.PC does not permit any police officer to seize property first and then to decide whether the property has any connection with the commission of the offence. 26. Bombay High Court in Dr. Shashikant, D. Karnik Vs. State of Maharashtra, 2008 Cri.LJ 148, has held that Section 102 Cr.PC does not permit any police officer to seize property first and then to decide whether the property has any connection with the commission of the offence. It is obligatory upon the police to show that the properly which they want to attach or attaching is under circumstances which create suspicion of the commission of any offence. 27. In Lathifa Abubakkar Vs. State of Karnataka, 2012 Cri.LJ 3487, Karnataka High Court found that police had not produced any materials to show that the seized bank account had any nexus with the commission of the alleged offence. It was noticed in that case that police had not issued notice of seizure to the account-holder to enable her to operate the bank account subject to execution of bond. 28. Adverting to the facts of the present case, particularly, impugned notice dated 28.05.2011, it is evidently clear that it was not a notice or an action under Section 102 Cr.PC. There was no prima facie satisfaction recorded by the Superintendent of Police about commission of any offence and the linkage of money deposited in the two bank accounts with the alleged offence. In fact, the second notice dated 20.09.2011 makes the position clear that till that point of time, action was not taken under Section 102 Cr.PC. In other words, freezing of the bank accounts or seizure of the bank accounts was de hors invocation of Section 102 Cr.PC. If this is the position, then such freezing of bank accounts cannot be legally sustained. 29. As discussed above, nothing has been placed before the Court by respondents particularly by respondent No. 3 regarding forthwith communication of the seizure to the jurisdictional Magistrate. A bald statement that after freezing of the bank accounts it was reported to the Magistrate having jurisdiction without any supporting details or without any further elaboration would not be sufficient. In the absence thereof, seizure of the two accounts of the petitioner by respondent No. 3 vide notice dated 28.05.2011 and continuation thereof is legally impermissible. 30. Consequently, impugned notice dated 28.05.2011 is set aside and quashed. In the absence thereof, seizure of the two accounts of the petitioner by respondent No. 3 vide notice dated 28.05.2011 and continuation thereof is legally impermissible. 30. Consequently, impugned notice dated 28.05.2011 is set aside and quashed. Respondent No. 4 shall now permit the petitioners to operate the two bank accounts but at the same time ensure that at least 25% of the deposited amount as on date remains in the two accounts for a period of one year from today. 31. Writ petition is allowed but without any order as to costs.