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2023:GUJHC:42480

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CRIMINAL APPLICATION NO. 1699 of 2016

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE J. C. DOSHI

==========================================================
1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?

2 To be referred to the Reporter or not ? Yes

3 Whether their Lordships wish to see the fair copy No

of the judgment ?

4 Whether this case involves a substantial question No

of law as to the interpretation of the Constitution
of India or any order made thereunder ?

==========================================================
DILIPKUMAR JITENDRA SHAH
Versus
STATE OF GUJARAT & 2 other(s)
==========================================================
Appearance:
MR PM DAVE(263) for the Applicant(s) No. 1
DS AFF.NOT FILED (N) for the Respondent(s) No. 2
MR LAUKIK PANT WITH MR SIDDHANT K GUJARATHI AND MS. JANKI
BHATT FOR NANAVATI ASSOCIATES(1375) for the Respondent(s) No. 2
NOTICE SERVED BY DS for the Respondent(s) No. 3
MS ASMITA PATEL, APP for the Respondent(s) No. 1
==========================================================

CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI

Date : 17/08/2023

ORAL JUDGMENT

1. By way of present petition, following reliefs are prayed :-

“(A) Admit this petition.

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(B) Issue appropriate writ, order or direction upon

respondent authorities to withdraw the instructions
regarding sealing of the accounts of the petitioner and
further petitioner may be allowed to operate different bank
accounts and to make financial transactions in the interest
of justice and equity.
(C) Grant interim relief and by way of interim order be
pleased to allow the petitioner to operate the different bank
accounts with Kalupur Bank as also Kalupur Bank
Vadodara pending admission and final disposal of this
petition.
(D) Pass such orders as thought fit in the interest of
justice.”

2. The case background is as under :-

2.1. On 14.12.2012, one Kanubhai Motibha Pargho in capacity

of Liquidation Officer of Cambay Hindu Merchant Cooperative
Bank Ltd., Khambhat lodged written complaint addressed to the
Police Inspector, Khambhat Town Police Station against four
persons which includes present petitioner for the offence under
sections 406, 409, 420, 465, 467, 471, 477A, 120-B of Indian
Penal Code. This written complaint came to be lodged as FIR
being C.R.No.I-9 of 2012.

2.2. The petitioner herein was serving as Accountant in the

Bank which later on merged with Kalupur Bank, Khambhat.
According to FIR, huge financial scam took place in Cambay
Hindu Merchant Cooperative Bank Ltd., Khambhat. It is alleged
that along with other accused, petitioner has also played role in

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commission of an offence. The petitioner is arraigned as an

accused. He preferred Regular Bail application before this Court
being Criminal Misc. Application No.18782 of 2015 and on
30.11.2015, this Court had released the petitioner on bail with
condition that the petitioner shall deposit Rs. 11 lakhs before the
Trial Court along with some other conditions.

2.3. During the investigation of an offence, Investigating Officer

found incriminating material against the petitioner, therefore,
under Section 102 of the Cr.P.C, he freezed bank account of the
petitioner having C.C.Account No.273590043, held with Kalupur
Bank at Khambhat. Action of the Investigating Officer to freeze
bank account under Section 102 of Cr.P.C. has prompted the
petitioner to approach this Court under Section 482 of the
Cr.P.C. seeking above-stated relief.

3. Learned advocate Mr. P.M.Dave, having referred to

documents on record, submits that by following order of this
Court passed in bail application, the petitioner has deposited
Rs.11 lakhs before the learned Trial Court. He would further
submit that the petitioner has not played any role in commission
of an offence. He would further submit that when FIR was
lodged, the petitioner had already retired from services, after
taking VRS. He would further submit that during the time period
of his service, audit of the bank transaction took place but such
transaction did not point out any illegality or irregularity in
money transaction. The FIR is filed with device and design to
harass the present petitioner. Apart from such submissions, he
would submit that in view of Section 102 of Cr.P.C., Investigating
Officer has not followed mandatory procedure as laid down in

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Section 102 of Cr.P.C. After freezing bank account, he has not

reported to the jurisdictional Magistrate Court. In view of such,
action taken on the part of the Investigating Officer is bad in law,
without jurisdiction and therefore, requires to be quashed and
set aside. In support of his submission, he has relied on
judgment of this Court in the case of Trivendrakumar Somalal
Bhandari Vs. State of Gujarat (Special Criminal Application
No.5678 of 2021) and in the case of Hansaben w/o Sunilbhai
Gulabsinh Padhiyar Vs. State of Gujarat (2021 (3) GLR 2328).
Above submission is made to allow this petition.

4. On the other hand, learned APP, Ms. Asmita Patel, has

submitted Report of Police Inspector, Khambhat which is ordered
to be taken on record. Referring to this report, she would submit
that huge financial scam has taken place, which has send
Cambay Hindu Merchant Cooperative Bank Ltd., Khambhat into
liquidation. Present petitioner is one of the main accused in
commission of an offence. She would further submit that charge-
sheet is already filed and trial is already pending before the
Court concerned. She would further submit that trial of the
offences are registered as Criminal Case Nos.1168 of 2015 and
Criminal Case No.1049 of 2014 before the learned JMFC,
Khambhat. She would further submit that whether provision
under Section 102 of Cr.P.C. is followed or not, can be
adjudicated before the Court concerned. She would further
submit that since criminal cases are pending against the
petitioner and other co-accused, it would be open for the
jurisdictional Magistrate to decide the issue in context of the
material available on record. This submission is canvassed with
a view not to entertain this petition. Upon such submissions, she

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would submit to dismiss this petition.

5. Having heard learned advocates for both the parties, at the

outset, it is to be noted that undisputedably bank account of the
petitioner has been freezed by the Investigating Officer in
exercise of powers under Section 102 of Cr.P.C. It is alleged that
Investigating Officer has not followed provisions of Section 102 of
Cr.P.C., while taking exercise of freezing bank account. In order
to understand this aspect, it is apt to refer Section 102 of 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, 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.”

6. Sub-section (3) of section 102 of Cr.P.C., makes it

manifestly clear that police officer is required to report seizure
of the property to the Court having jurisdiction. The expression
“every police officer” as well as “shall” appearing in sub-section
(3) of section 102 of Cr.P.C. makes it mandatory in nature.
Magistrate having jurisdiction should be reported as he shall be
in domain of the property seized by the Investigating Officer.

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The Investigating Officer cannot exercise powers under section

102 of Cr.P.C. without informing same to the learned
Magistrate having jurisdiction. If police officer has acted in
contravention of sub-section (3) of section 102 of Cr.P.C., it is
manifestly erroneous act on the part of the Investigating Officer.
It would not be termed as seizure as stated in section 102 of
Cr.P.C. The unilateral act of the police officer seizing property
under section 102 of Cr.P.C. without informing Magistrate
having jurisdiction is arbitrary act and it is itself non-est act.
Report of the Police Officer clearly indicates that after freezing
bank account of the petitioner under section 102 of Cr.P.C., the
Investigating Officer had not informed to the Magistrate having
jurisdiction.

7. At this juncture, observation made by the Division Bench

of Delhi High Court in the case of Ms. Swaran Sabharwal v/s.
Commissioner of Police [(1988) Cr.L.J. 241] may be noted with
profit which reads as under :-

“……in to the case of seizure of a bank account, the police

officer should have done two things : he should have
informed the concerned magistrate forthwith regarding the
prohibitory order. He should have also give notice of the
seizure to the petitioner and followed her to operate the
bank account subject to her executing a bond undertaking
to produce the amounts in court as and when required or
to hold them subject to such orders as the court may make
regarding the disposal of the same. This was not done.
Even a copy of the prohibitory orders was not given to the
petitioner. The police did not seek the directions of the
Magistrate trying the offence. Not only that, when the
petitioner herself approached the Magistrate who was
trying the petitioner's husband under the official Secrets
Act, her request to be allowed to operate the account was

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opposed by the police contending that the bank account

was not "case property" and that the petitioner's remedies
lay elsewhere than in the court of the Magistrate. The
Magistrate accepted the plea of the police and dismissed
the application of the petitioner and directed to seek
remedy elsewhere before the appropriate authority. The
petitioner having lost before the Magistrate, had no other
recourse except to file a writ petition praying for the setting
aside of the prohibitory order.”

8. I may also refer to the decision of this Court in the case of

Paresha G. Shah v/s. State of Gujarat delivered in Special
Criminal Application No.150 of 2015 decided on 15.06.2015,
whereby it is observed as under :-

“Like any other property a bank account is freezable.

Freezing the account is an act in investigation. Like any
other act, it commands and behoves secrecy to preserve
the evidence. It does not deprive any person of his liberty
or his property. It is necessarily temporary i.e. till the
adequate material is collected. It clothes the authority with
the power to preserve a property suspected to have been
used in the commission of the offence in any manner. The
property, therefore, requires to be protected from
dissemination, depletion or destruction by any mode.
Consequently, under the guise of being given information
about the said action, no accused, not even a third party,
can overreach the law under the umbrella of a sublime
provision meant to protect the innocent and preserve his
property. It is also not necessary at all that a person must
be told that his bank account, which is suspected of
having been used in the commission of an offence by
himself or even by another, is being frozen to allow him to
have it closed or to have its proceeds withdrawn or
transferred upon such notice.”

9. The Apex Court has also recognized power of Investigating

Officer to freeze account under section 102 of Cr.P.C. In the
case of State of Maharashtra v/s. Tapas D. Neogy [(1999) 7 SCC

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685, the Apex Court has held that if circumstances exist in

relation to bank account, then section 102(1) of the Code would
be attracted empowering the police officer investigating the
offence to seize the bank account and to issue orders
prohibiting the account from being operated upon, if the
property has direct links with the commission of offence for
which the police officer is investigating. Thus, bank account of
the accused or his relatives could be said to be property within
the meaning of sub-section (1) of section 102 of the Code which
could be seized. What requires for the police while freezing
bank account or property having direct link with the
commission of offence under sub-section (1) of section 102 of
Cr.P.C. is required to be followed by informing jurisdictional
Magistrate under sub-section (3) of section 102 of Cr.P.C.

10. Thus while accepting that Investigating Officer has power

under section 102(1) of Cr.P.C. to freeze the bank account being
property said to have link with commission of offence,
Investigating Officer is required to follow procedure in toto i.e.
to follow procedure sub-section (3) of section 102 of Cr.P.C.
Admittedly, in this case, Investigating Officer has not followed
procedure laid down in sub-section (3) of section 102 of Cr.P.C.
Investigating Officer has tried to prove that amount which is
lying in the bank account freezed by him has link with the
commission of offence alleged against the petitioner. It is
undeniable that allegation of huge financial scam which caused
loss to Cambay Hindu Merchant Cooperative Bank Ltd.,
Khambhat is made in the FIR. However, the circumstances
spells that Investigating Officer has committed breach of
provisions of section 102(3) of Cr.P.C. Though freezing of bank

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account by Investigating Officer is in contravention of the

provision of law as such making act non-est but at the same
time, it cannot be ruled out that amount lying in the bank
account belongs to the petitioner is suspected of having link
with the commission of offence.

11. In juxtaposition of above situation and for the foregoing

reasons, this petition is allowed in terms of following order :-
ORDER
(1) The petitioner is directed to execute bond of amount
equivalent to amount with accrued interest lying in CC
Account No.273590043 with Kalupur Bank at Khambhat
to the satisfaction of learned JMFC, Khambhat within 15
days from today.
(2) In the event of compliance of above on the part of the
petitioner, the Investigating Officer shall inform bank
concerned to de-freeze the bank account being CC Account
No.273590043 with Kalupur Bank at Khambhat.
(3) Concerned learned JMFC, Khambhat is directed to
expedite trial of Criminal Case No.1049 of 2014 and
Criminal Case No.1168 of 2015 as early as possible and to
decide the same preferably within nine months from the
date of receipt of this order.
(4) Learned Principal District Judge, Anand is directed to
monitor progress of trial of Criminal Case No.1049 of 2014
and Criminal Case No.1168 of 2015.

(J. C. DOSHI,J)
SATISH

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