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PETITIONER: STATE OF MAHARASHTRA

       Vs.

RESPONDENT: TAPAS D.  NEOGY

DATE OF JUDGMENT:       16/09/1999

BENCH: G.B.Pattanaik, N.S. Hedge

JUDGMENT:

PATTANAIK, J.

     Leave granted.

     This  appeal by special leave is directed against  the judgment  and order dated 9.4.97 of the Bombay High Court in Criminal  Application  No.  826 of 1996.  The said  criminal application  along  with four other criminal writ  petitions involving the same question of law were decided together and disposed  of by the common judgment which is being  impugned in  this  appeal.  The short question that arose before  the High  Court is whether a Police Officer, investigating  into an  offence  can issue prohibitory order in respect  of  the bank  account  of  the accused in exercise  of  power  under Section 102 of the Criminal Procedure Code?

     So  far  as  Crl.   Application No.  826  of  1996  is concerned, the short facts are that one Tapas D.Neogy was an Architect  & Town Planner in the Department of Town Planning of  the  Union  Territory of Daman and Diu.  The  CBI,  ACB, Mumbai  registered  three First Information Reports  against the  said  Tapas Neogy and three others for  offences  under Sections  120-B, 467, 468, 471 and 420 IPC and Section 13(2) read  with Section 13(1)(d) of the Prevention of  Corruption Act,  1988.   It was alleged that the accused committed  the offence  while on duty and while he was posted as  Architect and  Town  Planner under Government of Daman.  The  original plan of Daman was prepared by the Department of Architecture and  Planning  and  was  approved by the  Town  and  Country Planning  Board.   In the approved plan, various zones  were earmarked  for industries, roads, defence, agriculture  etc. It was further alleged that out of total area of land, 7.25% was  earmarked for industries and 41.21% for agriculture and open  space.   The zoning could be changed by the  Town  and Country   Planning  Board.   The   procedure  to  alter  the agricultural  land  into non-agricultural land was that  the land   owners   who   wish  to    change   their   land   to non-agricultural   use  were  required  to  apply   to   the Collector,  who  was the competent authority to  grant  such permission.   Such applications were then forwarded to  Town Planning  Department  for the purpose of clearance.  It  was further alleged that Tapas Neogy and accused Narayan Divakar entered  into a conspiracy by which Divakar caused a  forged map  of Daman to be prepared, thereby increasing  industrial zone.   On  the basis of the same forged map, accused  Tapas

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Neogy  issued  false certificates indicating that  the  land fell  within  the industrial zone.  On account of such  act, the  land  prices  shoot up from Rs.100/-  to  Rs.110/-  per square  meter to Rs.800/- to Rs.1,600/- per sq.  meter,  and in  the  process,  accused Divakar and accused  Tapas  Neogy caused  pecuniary advantage to be gained by the land owners. Pursuant  to  the First Information Report, the premises  of Tapas  Neogy at Daman were searched on 12th of October, 1993 and  several  incriminating documents were seized.   On  the same  day, the premises of the mother of accused Tapas Neogy at  Calcutta  was also searched and certain  documents  were seized.  The locker in Indian Bank at Calcutta, jointly held by  Tapas  Neogy’s mother and his brother was also  searched and  was  sealed and another locker held by the  mother  and sister  of  Tapas  was searched and was  also  sealed.   The Investigating  Officer  issued instructions to  Managers  of different  banks  not to allow the accounts to  be  operated upon.   The mother of Tapas then filed an application before the  Additional  Chief Metropolitan Magistrate, 37th  Court, Esplande, Mumbai, under Section 457 of the Cr.P.C.  to allow her  to  operate  the  bank account and for  return  of  the documents  and articles seized, claiming that they  belonged to  her.  The Magistrate by his Order dated 13th of October, 1995,  granted  the  relief  in respect  of  the  locker  in question but refused to allow the mother of said Tapas Neogy to operate the bank account.  The Magistrate was of the view that  he  had  no  inherent power  and,  therefore,  has  no jurisdiction  to  allow  to grant the  relief  sought  under Section  457  of the Criminal Procedure Code.   Against  the said order of the learned Magistrate, the matter was carried to  the  Bombay High Court.  The High Court in the  impugned judgment  analysed  the  provisions of Section  102  of  the Criminal Procedure Code and after noticing several judgments of  different  High Courts, came to the conclusion that  the bank  account  of an accused or any relation of the  accused cannot  be  held  to  be ‘property’ within  the  meaning  of Section  102  of  the  Code   of  Criminal  Procedure   and, therefore, the Investigating Officer has no powers either to seize  the  said  bank account or to issue  any  prohibitory order,  prohibiting  the operation of the bank account.   In coming to this conclusion, the learned Single Judge followed the  Division  Bench  decision of the Bombay High  Court  in Lloyds  Bank’s  case and some other decisions of some  other High  Courts,  taking  the  similar   view.   The  State  of Maharashtra  in  this appeal assails the correctness of  the view  taken  by the learned Single Judge of the Bombay  High Court.

     At  the  outset,  it may be stated that  there  is  no decision  of  this  Court on the point in issue.   When  Mr. Shukla,  the  learned  Senior  Counsel,  appearing  for  the appellant  began  his  submissions, Mr.   Mariarputham,  the learned counsel for the respondent pointed out that pursuant to  the impugned judgment of the Bombay High Court, the bank accounts  in question have been allowed to be operated  upon and,  therefore, the question of law raised does not survive for consideration.  But since the High Courts in the country have  taken divergent views on the interpretation of Section 102  of the Code of Criminal Procedure and since there is no decision  of  this Court on the question, we indicated  that notwithstanding  the fact that the order has been allowed to be  operated upon, it will be appropriate for this Court  to entertain  and decide the question.  The law relating to the prevention  of  corruption and matters  connected  therewith were  being dealt with by the Prevention of Corruption  Act,

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1947,  which  was  amended  in the year 1964  based  on  the recommendations of the Santhanam Committee.  In the Criminal Law  Amendment  Ordinance,  1944, there  are  provisions  to enable  attachment  of  ill-gotten wealth  obtained  through corrupt  means,  including from transferees of such  wealth. To  make the existing anti corruption laws more effective by widening their coverage and by strengthening the provisions, the  Parliament  enacted the Prevention of  Corruption  Act, 1988, which received the assent of the President of India on September  the 9th, 1988.  Under the Act, the definition  of the  expression  "public servant" stood widened and  penalty for  offences under Sections 161 to 165A of the Indian Penal Code  was  enhanced.  Under Section 13 of the Act, a  public servant  who  commits criminal misconduct, is liable  to  be punished  with  imprisonment for a term which shall  be  not less  than one year but which may extend to seven years  and shall  also be liable to fine.  Without providing the amount of  fine  which  could be imposed under sub-section  (2)  of Section  13 the legislature have indicated the matters to be taken  into consideration for fixing the fine under  Section 16  of the Act and it categorically provides that for fixing the  amount  of fine under sub-section (2) of Section 13  or Section  14,  the  Court shall take into  consideration  the amount or the value of the property which the accused person has obtained by committing the offence.  Under Section 18 of the  Act, power has been conferred on the Police Officer  to inspect  any bankers’ book and to take or cause to be  taken certified  copies of the relevant entries therefrom, and the bank  concerned shall be bound to assist the police  officer in  the  exercise  of his powers under  Section  18.   Under Section  22  of  the  Act, the provisions  of  the  Code  of Criminal   Procedure  have  been   made  applicable  to  any proceeding  in  relation to an offence punishable under  the Act.   We  have  analysed  the aforesaid  provision  of  the Prevention of Corruption Act, 1988 as in our view the object engrafted  in the different provisions of the Prevention  of Corruption  Act,  1988  has to be taken into  account  while interpreting  the provisions contained in Section 102 of the Code  of  Criminal Procedure.  It may be stated that  though the  Prevention  of Corruption Act has been enacted to  deal with  the ‘public servants’ who receive gratification  other than  legal  remuneration in respect of an official act  and who  by corrupt or illegal means or by abusing his  position obtains  for  himself or for any other person any  pecuniary advantage  or valuable thing, or such public servant who  is found  to  be  in possession or has at any time  during  the period  of  his  office been in possession of  property  for which  he  cannot  satisfactorily   account,  of   pecuniary resources  or property disproportionate to his known sources of  income,  yet there is no specific provision in  the  Act itself  as to how or in what manner the said property can be dealt  with by the Investigating Officer even if he comes to the  conclusion  that  the assets in the possession  of  the ‘public  servant’ is directly linked with the commission  of the  offence.   It  is  therefore,   only  by  applying  the provisions  of Section 102 of the Criminal Procedure Code if the said provision is held to be conferring power of seizing and/or   prohibiting   operation  of   bank   account,   the Investigating  Officer  can pass orders of seizing the  bank account or issue prohibitory order to the banks not to allow the account holder to operate the account.

     Coming  now  to the provisions of Section 102  of  the Code   of  Criminal  Procedure,   the  said  provisions  are extracted herein below in extenso:

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     "Sec.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-sec.(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 to give effect to the further orders  of the Court as to the disposal of the same.]"

     A  plain  reading  of sub-section(1)  of  Section  102 indicates that the Police Officer has the power to seize any property  which  may be found under  circumstances  creating suspicion of the commission of any offence.  The legislature having  used the expression "any property" and "any offence" have made the applicability of the provisions wide enough to cover  offences  created  under any Act.  But the  two  pre- conditions  for applicability of Section 102(1) are that  it must  be  ‘property’  and secondly, in respect of  the  said property  there  must  have suspicion of commission  of  any offence.   In  this  view  of the  matter  the  two  further questions  that arise for consideration are whether the bank account  of an accused or of his relation can be said to  be ‘property’  within the meaning of sub-section(1) of  Section 102  of  the  Cr.P.C.  and secondly,  whether  circumstances exist,  creating  suspicion of commission of any offence  in relation  to the same.  Different High Courts in the country have  taken divergent views in this regard.  In the case  of Ms.   Swaran Sabharwal vs.  Commissioner of Police, reported in 1988 Criminal Law Journal(Vol.  94) 241, a Division Bench of  Delhi  High  Court examined the  question  whether  bank account  can be held to be ‘property’ within the meaning  of Section  102  of  the Cr.P.C.  In the  said  case,  proceeds realised  by sale of official secrets were deposited by  the accused  in his wife’s account.  The Court in that case came to  hold that it is not quite sure whether monies  deposited in  a  bank account can be seized by means of a  prohibitory order  under the provisions of Section 102 but even assuming that  a  bank account is a ‘property’ within the meaning  of Section  102 of the Code of Criminal Procedure, the  further consideration must be satisfied namely the property has been found  under circumstances which create the suspicion of the commission  of  an offence.  But in that case it is not  the discovery  of  the  property that has created  suspicion  of commission of an offence but on the other hand the discovery of  the  bank  account  is  a sequel  to  the  discovery  of commission  of offence inasmuch as the police suspected that some  of  the proceeds realised by the sale of the  official secrets  have been passed on to the bank account of the wife of  the  accused.  Therefore, the Court was of  the  opinion that  the  provisions of Section 102 cannot be invoked.   In the  case of M/s.  Purbanchal Road Service, Gauhati vs.  The State, reported in 1991Criminal Law Journal (Vol.97) 2798, a learned  Single Judge of the Gauhati High Court examined the provisions of Section 102 of the Criminal Procedure Code and the  validity  of an order by a Police Officer,  prohibiting the bank from paying amount to the accused from his account. The  learned Judge came to the conclusion that word  ‘seize’

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used  in Section 102 Cr.P.C.  means actual taking possession in  pursuance of a legal process and, therefore, in exercise of  the  said power, a bank cannot be prohibited not to  pay any  amount out of the account of the accused to the accused nor  can  the  accused be prohibited from  taking  away  any property  from  the locker, as such an order would not be  a ‘seizure’  within the meaning of Section 102 of the Criminal Procedure  Code.   The learned Single Judge agreed with  the view  taken  by Allahabad High Court in the case of  Textile Traders  Syndicate Ltd., Bulandshahr vs.  The State of U.P., AIR  1960 Allahabad 405 (Vol.47).  In the Allahabad Case  on which  Gauhati  High Court relied upon (AIR  1960  Allahabad 405), what was decided by the Court is, once money passes on from  the accused to some other person or to the bank, money itself  becomes unidentifiable and, therefore, there  cannot be  any  question  of  seizure of the  same  by  the  Police Officer.

     In  the  case of M/s Malnad Construction Co.,  Shimoga and  Ors.   vs.  State of Karnataka and Ors., 1994  Criminal Law   Journal(Vol.100)  645,  a   learned  Single  Judge  of Karnataka  High Court examined the provisions of Section 102 of  the Criminal Procedure Code and relying upon the Gauhati High  Court’s decision, referred to supra, came to hold that the  ‘seizure’  in  Section  102 would  mean  taking  actual physical  possession of the property and such a  prohibitory order  to  the  banker  of the accused not  to  operate  the account is not contemplated under the Code and consequently, the  police has no power to issue such order.  Thus the High Courts of Karnataka, Allahabad, Gauhati and Delhi have taken the  view that the provisions of Section 102 of the Criminal Procedure  Code  cannot be invoked by the Police Officer  in course  of  investigation to issue any prohibitory order  to the banker or the accused from operating the bank account.

     In  P.K.   Parmar  and ors.  vs.  Union of  India  and anr.,  1992  Criminal Law Journal 2499 (Vol.98),  a  learned Single  Judge  of Delhi High Court considered the  power  of police  officer under Section 102 of the Criminal  Procedure Code,  in  connection  with the  fraudulent  acquisition  of properties  and  opening  of fictitious  bank  accounts  and withdrawal  of  huge amounts as subsidy from  Government  by producing bogus documents by the accused.  The learned Judge took note of the earlier decision of Delhi High Court in Ms. Swaran  Sabharwal vs.  Commissioner of Police, 1988 Criminal Law  Journal  240 (Vol.94), and analysed the  provisions  of Section  102 of the Criminal Procedure Code and the facts of the  case  were  as  under.  It  was  revealed  that  during investigation  the  prosecution  came to know  that  without actually   manufacturing  phosphate   and  fertilizers,  the accused  withdrew as much as Rs.3.39 crores as subsidy  from the Govt.  of India by producing bogus documents.  The Court ultimately  came  to  the conclusion that  the  recovery  of assets  in the bank links prima facie with the commission of various  offences  with which they have been charged by  the CBI   and,  therefore,  the   police  officer  could   issue directions  to various banks/financial institutions freezing the  accounts  of  the accused.  The learned  Judge  in  the aforesaid  case  has really considered the amount  of  money which  the accused is alleged to have swindled by  producing bogus  documents  which prompted him to hold that the  power under Section 102 Cr.P.C.  can be exercised.

     In  Bharath Overseas Bank vs.  Minu Publication,  1988 Madras  Law Weekly (Crl.) 106, a learned Single Judge of the

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Madras  High Court considered the same question and came  to the  conclusion that the expression ‘property’ would include the  money  in  the bank account of the  accused  and  there cannot  be any fetter on the powers of the police officer in issuing  prohibitory orders from operating the bank  account of  the  accused  when  the   police  officer  reaches   the conclusion  that  the amount in the bank is the  outcome  of commission  of offence by the accused.  The Court considered the  fact  as  to how in modern days,  commission  of  white collar  crimes and bank frauds are very much on the increase and  banking  facilities have been extended to the  remotest rural areas and, therefore the expression ‘property’ may not be  interpreted in a manner so as to exclude the money in  a bank  which  in turn would have the effect of placing  legal hurdles,  in  the process of investigation into the  crimes. According  to the learned Judge, such literal interpretation of  the expression ‘property’ could not have been the intent of the framers of the Criminal Procedure Code.  In paragraph 11  of the said judgment, the learned Judge referred to  the object  behind investing the police with powers of  seizure. It will be appropriate to extract the same in extenso:

     "It  would now be useful to refer to the object behind investing  the  police with powers of seizure.  Seizure  and production  in  court  of   any  property,  including  those regarding which an offence appears to have been committed or which  appears  to have been used for the commission of  any offence  or any other property will have a two-fold  effect. Production  of  the  above  property  may  be  necessary  as evidence  of the commission of the crime.  Seizure may  also have to be necessary, in order to preserve the property, for the  purpose of enabling the Court, to pass suitable  orders under S.452 of the Criminal Procedure Code at the conclusion of  the trial.  This order would include destruction of  the property,  confiscation  of the property or delivery of  the property to any person claiming to be entitled to possession thereto.   It  cannot  be  contended  that  the  concept  of restitution of property to the victim of a crime, is totally alien to the Criminal Procedure Code.  No doubt, the primary object  of  prosecution  is   punitive.   However,  Criminal Procedure  Code, does contain several provisions, which seek to re-imburse or compensate victims of crime, or bring about restoration  of  property  or its  restitution.   As  S.452, Crl.P.C.  itself indicates, one of the modes of disposing of property  at the conclusion of the trial, is ordering  their return  to the person entitled to possession thereto.   Even interim  custody of property under Ss.451 and 457, Crl.P.C., recognises  the  rights  of  the   person  entitled  to  the possession  of  the properties.  An innocent  purchaser  for value  is  sought  to  be  re-imbursed  by  S.453,  Crl.P.C. Restoration    of   immovable     property   under   certain circumstances,  is  dealt with under S.456, Crl.P.C.   Even, monetary  compensation to victims of crime or any bona  fide purchaser of property, is provided for under S.357, Crl.P.C. Wherein  when  a Court while convicting the accused  imposes fine,  the whole or any part of the fine, if recovered,  may be  ordered  to paid as compensation to any person, for  any lose  or  injury, caused by the offence or to any bona  fide purchaser of any property, after the property is restored to the  possession  of the person entitled thereto.   This  two fold  object  of  investing the police with  the  powers  of seizure,  have to be borne in mind, while setting this legal issues."

     This  Judgment  of  the learned Single  Judge  of  the

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Madras  High  Court was followed in a later decision in  the case   of   Bharat  Overseas   Bank  Ltd.   vs.    Mrs.Prema Ramalingam,  1991  Madras Law Weekly(Criminal) 353,  wherein the  learned  Judge  agreeing with Padmini Jesudurai,  J  in Bharat  Overseas Bank’s case came to hold that money in bank account  is ‘property’ within the meaning of Section 102  of the  Criminal  Procedure  Code,  which could  be  seized  by prohibiting order.  In the aforesaid case, the learned Judge has  also  noticed  the fact that the  Judgment  of  Padmini Jesudurai,  J,  in  1988  LW(Crl.)106,  was  upheld  by  the Division  Bench subsequently.  In the case of Dr.  Gurcharan Singh  vs.   The  State  of   Punjab,  1978(80)  Punjab  Law Reporter, 514, a Division Bench of the Punjab & Haryana High Court  differing  with the view taken by the Allahabad  High Court  in AIR 1960 Allahabad 405, came to hold that the bank account  would be ‘property’ and as such would be capable of being  seized  under  Section 102 of the  Code  of  Criminal Procedure.   Having considered the divergent views taken  by different  High  Courts with regard to the power of  seizure under  Section  102 of the Code of Criminal  Procedure,  and whther  the bank account can be held to be ‘property’ within the  meaning of said Section 102(1), we see no justification to  give any narrow interpretation to the provisions of  the Criminal  Procedure Code.  It is well known that  corruption in  public offices has become so rampant that it has  become difficult  to  cope up with the same.  Then again  the  time consumed  by the Courts in concluding the trials is  another factor  which  should be borne in mind in  interpreting  the provisions of Section 102 of the Criminal Procedure Code and the  underlying  object  engrafted therein, inasmuch  as  if there  can be no order of seizure of the bank account of the accused  then the entire money deposited in a bank which  is ultimately  held  in  the  trial to be the  outcome  of  the illegal gratification, could be withdrawn by the accused and the  Courts  would be powerless to get the said money  which has  any  direct  link with the commission  of  the  offence committed  by  the  accused as a public  officer.   We  are, therefore,  persuaded to take the view that the bank account of  the accused or any of his relation is ‘property’  within the  meaning  of Section 102 of the Criminal Procedure  Code and a police officer in course of investigation can seize or prohibit  the  operation of the said account if such  assets have  direct  links with the commission of the  offence  for which  the  police  officer  is  investigating  into.    The contrary  view expressed by Karnataka, Gauhati and Allahabad High  Courts,  does not represent the correct law.   It  may also  be  seen that under the Prevention of Corruption  Act, 1988,  in the matter of imposition of fine under sub-section (2)  of Section 13, the legislatures have provided that  the Courts  in  fixing  the  amount  of  fine  shall  take  into consideration the amount or the value of the property, which the accused person has obtained by committing the offence or where the conviction is for an offence referred to in clause (e)  of  sub-  section(1)  of   Section  13,  the  pecuniary resources or property for which the accused person is unable to  account satisfactorily.  The interpretation given by  us in  respect of the power of seizure under Section 102 of the Criminal  Procedure Code is in accordance with the intention of the legislature engrafted in Section 16 of the Prevention of  Corruption  Act  referred to above.   In  the  aforesaid premises,  we  have no hesitation to come to the  conclusion that  the  High Court of Bombay committed error  in  holding that  the  police  officer could not have  seized  the  bank account  or could not have issued any direction to the  bank officer,  prohibiting the account of the accused from  being

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operated upon.  Though we have laid down the law, but so far as  the  present case is concerned, the order  impugned  has already  been  given  effect  to and the  accused  has  been operating upon his account, and so, we do not interfere with the same.