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Section 102 Cr.P.C, the powers of the police officer, the procedure, compliance, non-compliance, and remedy to the aggrieved

By K Raghavacharyulu

We often come across in every investigation by police, the orders of the Investigating Officer seizing certain properties involved or alleged or suspected to have been stolen or found in circumstances creating suspicion of the commission of any offence.

  1. Section 102 Cr.P.C empowers the Police Officer/Investigating Officer to seize any property which includes the physical properties as well as commercial properties, known as Bank Accounts, Bank Lockers, Shares, Demat Accounts etc. Sub-Section (3) of Section 102 Cr.P.C contemplates the procedure to be followed by the Police Officer immediately after seizure of the properties.  Every Police Officer acting under the powers conferred under Section 102 Cr.P.C shall forthwith report the seizure of such properties to the concerned Jurisdictional Magistrate where the property was seized etc.
  2. Section 102 Cr.P.C while conferring power on the Police Officer to seize the properties involved in the Crime, it does not stipulate any specific provision regarding the remedy to the aggrieved person. The party whosoever aggrieved by the order passed by the Investigating Officer/Police Officer seizing certain properties has the remedy under Section 457 r/w.Sec.451 Cr.P.C.  But often the petitions are filed under Section 482 Cr.P.C before the Hon’ble High Courts seeking quashing of the orders passed under Section 102(1) Cr.P.C.  Some Hon’ble High Courts are entertaining such petitions while some are not.
  3. There were difference of opinions among the Hon’ble High Courts regarding the maintainability of the quash petitions filed under Section 482 Cr.P.C when there is an alternative remedy that is available under Section 457 r/w.Sec.451 Cr.P.C. Predominantly the quash petitions under Section 482 Cr.P.C are filed on the ground that there was non-compliance of the procedure contemplated under Sub-Section (3) of Section 102 Cr.P.C by the Police Officer and in re the ownership of such properties.  The point that arises for consideration is whether the procedure contemplated under Sub-Sec.(3) of Section 102 Cr.P.C is mandatory in nature or procedural in nature or directory in nature.  Therefore, the non-compliance of the same, if any, whether it vitiates the very proceeding or freezing or seizing of the property involved in the crime.  Therefore,  the following three questions arose from the above:
  1. Whether the petitions under Section 482 Cr.P.C questioning the proceedings under Section 102 Cr.P.C is maintainable in view of the alternative remedy available under the provisions of Cr.P.C?

 

  1. Whether the non-compliance of recording satisfaction under Section 102(1) Cr.P.C of alleged non-compliance of Section 102(3) Cr.P.C vitiates the entire proceedings of freezing of demat accounts and other accounts?

 

  1. Whether the police officer can sieze only the properties of the named accused or he can order seizure of the properties in the name of or in the position of some third parties.
  1. The first and foremost to be considered is that the Hon’ble High Courts cannot entertain a petition filed under Section 482 Cr.P.C when alternative remedy under Sections 451 and 457 Cr.P.C is available to the aggrieved. They can avail remedy under Section 457 Cr.P.C during the pendency of investigation or under Section 451 Cr.P.C if the investigation is completed and Calendar Case is pending for trial.  Instead of availing such remedies available under statute, the aggrieved approach the Hon’ble High Courts invoking the inherent jurisdiction of the Hon’ble High Courts under Section 482 Cr.P.C to quash the order.
  2. In this regard there are different views or judgments. As is known to all that in the matter of State of Haryana v. Bhajanlal {1992 Supp.(1) SCC 335} the Hon’ble Apex Court laid down 7 guidelines for entertaining an application under Section 482 Cr.P.C to quash the criminal proceedings.
  3. Similarly, in R.P.Kapur vs. State of Punjab {AIR 1960 SC 866} 4 principles were laid down and under those circumstances a criminal proceeding can be quashed by the Hon’ble High Court. Whereas in (Mrs.)Dhanalakshmi vs. R.Prasanna Kumar and ors.{AIR 1990 SC 494} and in State of Karnataka vs. L.Muniswamy and Ors.{AIR 1977 SC 1489} the powers of the High Court under Section 482 Cr.P.C were discussed in detail while upholding the inherent power of the High Court under Section 482 Cr.P.C.
  4. At the same time, there are series of judgments of the Hon’ble Apex Court as well as the Hon’ble High Court of Maharashtra at Mumbai, which categorically laid down the law that when there is an alternative remedy contemplated under Section 457 r/w.Sec.451 Cr.P.C, the aggrieved must approach the Jurisdictional Magistrate by filing a petition under Section 457 Cr.P.C seeking de-freezing of the property in question. The aggrieved cannot invoke Section 482 Cr.P.C i.e., the inherent powers of the High Court to quash the criminal proceedings.  In the matter of State of Maharashtra vs. Tapas D.Neogy {(1997) 7 SCC 685}, the Apex Court further held that the expression ‘property’ used in Section 102 (1) Cr.P.C includes the property of bank accounts etc.  In this judgment, the Apex Court categorically held that the remedy of Section 482 Cr.P.C is not available against the orders passed under Section 102 Cr.P.C.
  5. In another land mark judgment of High Court of Maharashtra at Mumbai which was unfortunately not reported i.e  the matter of National Securities Clearing Corporation Ltd vs. State of Maharashtra and Ors. {Criminal Application No.483 of 2013 in Maharashtra  High Court at Mumbai dt. 22-08-2013}  in that unreported judgment a learned single Judge of the Bombay High Court considered the scope of Section 102, 482 and 457 Cr.P.C by referring various judgments of the Privy Council and the Supreme Court as well as the judgments of the other High Courts in the country, concluded that a petition under Section 482 Cr.P.C is not maintainable when a remedy under Sections 451 and 457 Cr.P.C is available against the orders passed under Section 102 Cr.P.C.  The aggrieved must exhaust the alternative remedy before the learned jurisdictional Magistrate wherein evidence was permissible to be recorded to stake its claims and convince it to hold shares but by-passing that remedy and invoking Section 482 Cr.P.C is not permissible in law.
  6. In another judgment in Bharath Overseas Bank v. Minu Publication {2002 (2) ALT Crl.419}, the Madras High Court has considered the question as to the maintainability of the petition filed under Section 482 Cr.P.C against the order passed under Section 102 Cr.P.C and concluded that the expression ‘property’ would include the money in the bank account of the accused and there cannot be any fetter on the power of the Police Officer in issuing the prohibitory orders from operating the bank account of the accused when the Police Officer reaches to the conclusion that the amount in the bank is an outcome of commission of offence by the accused.
  7. In the matter of Narottam Singh Dhillon and Anr. vs. State of Punjab {MANU/PH/0006/2007} a single Judge of the Punjab & Haryana High Court at Chandigarh discussed the scope of Section 102 Cr.P.C and the remedy available to a person aggrieved by the orders passed under Section 102 Cr.P.C.
  8. The Hon’ble Supreme Court of India in the matter of State of Gujarat v. Shyamlal Mohanlal Choksi {AIR 1965 SC 1251} held that the remedy open to the aggrieved is to approach the court under Section 457 Cr.P.C for release of the amount from the prohibitory orders. When direct remedy is available under the Statute i.e., Code of Criminal Procedure, the aggrieved cannot approach the High Court invoking its inherent jurisdiction under Section 482 Cr.P.C.
  9. In Sudeep Kaur Sawhney vs. Union of India and Ors. {MANU/PH/1033/2015} a Division Bench of the Hon’ble High Court of Punjab and Haryana had an occasion to consider whether the writ petition filed under Article 227 of the Constitution of India to set aside the order passed under Section 102 Cr.P.C freezing the accounts is maintainable. The Division Bench categorically held that when the remedy under Punjab Money Laundering Act is available under Section 8(c) a writ petition is not maintainable.
  10. In the light of the above, the first question as to whether a petitioner under Section 482 Cr.P.C questioning the proceedings issued under Section 102 Cr.P.C is maintainable in view of the alternative remedy available under the provisions of the Code of Criminal Procedure is bound to be answered as negative. The practice to approach the High Court hurriedly / directly  against every interlocutory order passed U/S 102 Cr.P.C is required to be curbed and the Hon’ble High Courts also would be loath to entertain such petitions.  It is not a self-imposed restriction and it is a statutory bar to entertain such petitions.  In other words, the provisions under Chapter-XXXIV of Cr.P.C would be otious if inherent power under Section 482 Cr.P.C is permitted to be invoked.
  11. The second question is relating to non-compliance of the provisions of Sub-Sec.(3) of Section 102 Cr.P.C whether they would vitiate the very freezing orders. The same question has come up before the Full Bench of the Mumbai High Court in Vinoskumar Ramachandran Valluvar and ors. vs. The State of Maharashtra and Ors. {2011 Crl.LJ 2522}, wherein it was held that no prior notice or intimation is required to be issued to a person before or simultaneously with the action of attaching his bank account during investigation.
  12. Similar view is expressed in R.Chandrasekar v. Inspector of Police Salem {2003 Crl.LJ 294}. In any event, in State of Maharashtra v. Tapas D.Neogy {referred to supra} the Hon’ble Supreme Court has categorically held that no such prior notice to the aggrieved is necessary.
  13. Under Sub-Sec.(3) of Section 102 Cr.P.C, the Police Officer is under obligation to report to the Jurisdictional Magistrate forthwith the seizure of the property involved in the crime. The Hon’ble Supreme Court in Shyamlal Mohanlal Choksi’s case {referred to supra} the purpose and objective behind such reporting was duly discussed and it was finally held that the same is procedural in nature since the aggrieved is aware of such freezing orders and approached himself with that knowledge for de-freezing.  Assuming for a moment that Section 102 (3) Cr.P.C is not complied with, it does not vitiate the entire proceedings, freezing the accounts.
  14. In an identical situation an identical question has come up before the then united Hon’ble High Court of Andhra Pradesh in the matter of Mohd.Maqbool Ahmed v. The Dy.Commr.of Police Hyd. & Ors. {1996 (2) APLJ 97 (HC)} wherein a Division Bench of the Hon’ble High Court of Andhra Pradesh at para-13 held that even assuming that there was non-compliance of the requirement of Section 102(3) Cr.P.C and the Police Officer has not informed the Jurisdictional Magistrate about the factum of seizing of bank accounts, such course of action would not vitiate the order passed under Section 102(1) Cr.P.C freezing the bank accounts.
  15. However, a single Judge of the Hon’ble High Court of Madras in the matter of Subbulakshmi v. The Commissioner of Police, Egmore, Chennai {2013 (3) MWN (Crl.) 40} took a contrary view. But in the matter of B.Ranganathan vs. State and others {2003 Crl.LJ 2779} another single Judge of the Hon’ble High Court of Madras took positive view.  Finally, it was held that non-compliance i.e., not reporting forthwith to the Jurisdictional Magistrate about the seizure by the Police Officer is only an irregularity and freezing of accounts is not vitiated.
  16. In the matter of Aranganayagam v. State, rep.by the Director of Vigilance and Anti Corruption, Erode 2000(1) MLJ 408 (Mad) and Shyamlal Mohanlal Choksi’s case {referred to supra} the law is very clear that the non-compliance of Sub-Sec.(3) of Section 102 Cr.P.C is only an irregularity and the aggrieved is bound to approach the Jurisdictional Magistrate under Section 457 Cr.P.C.
  17. The Hon’ble Supreme Court in the latest judgment in Teesta Atul Setalvad v. State of Gujarat {(2018) 2 SCC 372} held that sweep and applicability of Section 102 Cr.P.C is no more res integra. The ratio laid down in the above said judgment of the Hon’ble Supreme Court is that when there is prima facie material to satisfy the suspicion and the investigation discloses the link between the transactions and the crime is under investigation, not completed, no order of de-freezing can be passed.
  18. With respect to the third question whether the police officer has the power to freeze or seize the  property such as Bank Accounts etc  is concerned, the  law, now is very clear.  The bank accounts,  need not only of the accused,  and  they can be of or in the name of any person creating suspicion about the commission of offence.  In this regard, the judgment of the Hon’ble High Court of Mumbai passed in Adarsh Co-operative Housing Society Limited v Union of India {2011 SCC ONLINE Bom 974} is relevant wherein it was held that freezing of the accounts of not only of the named accused even the accounts of society (third party) which is not an accused is permissible in law, since Section 102 of Cr.P.C empowers the Police Officer to seize the properties not only of the accused but any of the relatives or any other person.
  19. In the light of the above,

 

1)      A criminal petition U/s. 482 Cr.P.C in the High Court against the order passed by police U/s 102 Cr.P.C is not maintainable.

 

2)      Sub-Sec.(3) of Section 102 Cr.P.C is directory in nature and is a procedural aspect the non compliance which does not vitiate the original proceeding or order passed under Sub-Sec.(1) of Section 102 Cr.P.C. and

 

3)      The police officer investigating the crime/ offence has all the powers subject to satisfaction of sub section (1) of Section 102 Cr.P.C to pass an order of seizing or freezing of the properties of not only of the named accused in FIR but also of  or in the name of the third parties who / which are not accused in the FIR  / Crime.

 

-The author is Spl Public Prosecutor CBI for all the high courts as well as Supreme Court  

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