Section 102 of Code of Criminal Procedure,1973 (hereinafter referred to as “Cr.P.C.”) provides power to the Investigating Agency to ‘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. Under Section 102(3) Cr.P.C., every police officer, who seizes any property will have to report the seizure to the Magistrate having jurisdiction. The power has been provided to the Investigating Agency to help and assist in its investigation, and to collect and collate the evidence in order to prove the charges thereof.
Section 102 Cr.P.C. reads as below:
Power of police officer to seize certain property.
- 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.
- Such police officer, if subordinate to the office in charge of a police station, shall forthwith report the seizure to that officer.
- 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 subsection (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.
The position of law in relation to the meaning of the word ‘seize’, the nature of property that can be seized under Section 102 Cr.P.C. and standard that the Investigating Agency has to apply before seizing any property is herein mentioned below:
Nevada Properties Private Limited through its Directors v. State of Maharashtra & Anr., 2019 SCC OnLine SC 1247 [Supreme Court of India, 3 Judge Bench]
The Supreme Court was called upon to decide whether ‘immovable property’ could be seized using the trope of Section 102 Cr.P.C. The case arose from a judgement of Bombay High Court wherein the High Court held that the expression ‘any property’ used under Section 102(1) Cr.P.C. does not include immovable property and consequently, a police officer investigating a crime has no power to seize any immovable property which is found under circumstances that create suspicion of commission of a crime. The matter came up before the Division Bench of the Supreme Court. However, realizing its gravity and magnitude, a reference was made to a three judge bench of the Supreme Court.
The Supreme Court held that the police have no power to seize immovable property under Section 102 Cr.P.C. The word ‘seized’ has been used in the sense of taking actual physical custody of the property, and thus, would only include movable properties. Language of Section 102 does not support the interpretation that the police has power to dispossess a person from occupation and take possession of immovable property in order to seize it. If such allowance is given to the police officer, it would give him drastic and extreme power to dispossess on a mere surmise or conjecture, that is, suspicion. Such an interpretation may lead to a chaotic situation.
The question that arose before the Supreme Court was whether a police officer investigating an offence can issue prohibitory order, or order seizure, in respect of the bank account of an accused in exercise of power under Section 102 Cr.P.C. The CBI had registered a case under the Prevention of Corruption Act, 1988, against the appellant and it was alleged that ill-gotten gains has been transferred to his and his relatives’ bank accounts. The Bombay High Court took the view that the bank account of an accused, or any of his relations, could not be held to be a ‘property’ within the meaning of Section 102 Cr.P.C and thus, police has no power to seize or issue prohibitory order against it. Aggrieved by the said judgment of the High Court, the State of Maharashtra filed an appeal before the Supreme Court.
The Supreme Court held that the bank account of accused and his relations comes within the purview of ‘property’ under Section 102 Cr.P.C. and a police officer during the course of investigation has power to seize, or issue prohibitory order, with respect to the bank account, that have direct links with the commission of the offence for which the police officer is investigating into. One of the factors that included the Supreme Court to take this view was the time consumed by the courts in concluding the trials inasmuch as if there was no seizure/prohibitory order with respect to the accounts of the accused, the same could be withdrawn by him, and then the courts would be powerless to get the said money which has direct link with the commission of offence committed by the accused.
The petitioner had challenged the prohibitory order issued by the Investigating Officer which had the effect of freezing the operation of the saving bank account of the petitioner. It was argued on behalf of the Investigating Officer that such order directing freezing of accounts was necessary since the funds had been deposited in the account of Petitioner by one of the accused persons and thus, such seizure is justified under Section 102 Cr.P.C.
The High Court quashed the seizure order while holding that the ‘property’ liable to be seized, under Section 102 Cr.P.C, should be the property that is ‘found under circumstances which create the suspicion of commission of crime’. The property under Section 102 Cr.P.C. should be the property that has been traced or discovered in circumstances which have led the police to believe of the commission of the offence. In view of the facts of the present case, it was held that there were no circumstances attendant thereto with respect to the bank account that had led the police officer to believe that some offence has been committed somewhere.
It was alleged that the petitioner had opened bogus banks accounts which he used to divert funds, allegedly obtained by fraud. He used to withdraw the amounts later on for acquiring immovable properties in his and his family members’ names with a firm namely M/s. Ansal Properties and Industries Pvt. Ltd. The Investigating Officer sent a letter to the Ansal Properties restraining them to handover the properties to the Petitioner and his family members, against which the Petitioner came before the High Court.
The High Court held that the principle to be kept in mind, before seizing any property, was that unless discovery of property leads to suspicion of an offence having been committed, Section 102 cannot be invoked for seizing such properties. The Court quashed the letter, issued by the Investigating Officer, stating that the deposits made with the Ansal Properties for acquiring immovable property by the petitioner and his family members had not created any suspicion in the his mind with regard to commission of an offence and therefore, the Investigating Officer had no power to ask Ansal Properties not to transfer the possession to the petitioner and his relations.
Manish Khandelwal & Ors. v. State of Maharashtra through Economic Offences & Ors., 2019 SCC OnLine Bom 1412 [Bombay High Court, Single Judge]
The question that arose was whether freezing of the bank accounts of the Petitioners by the Investigating Officer during the course of investigation without intimating the concerned magistrate is legally sustainable. The First Information Report was registered against the Petitioners for committing criminal breach of trust and cheating, and the Investigating Agency directed the banks that their accounts be freezed. The Petitioners, before approaching the Bombay High Court, in a writ petition, approached the concerned Magistrate and the Court of Sessions for defreezing their accounts, specifically raising a contention that Section 102(3) Cr.P.C. is mandatory and that no compliance was by the Investigating Officer thereto. However, both the courts dismissed such applications.
It was submitted by the State that non-compliance of Section 102(3) Cr.P.C. is merely an irregularity and it will not vitiate the proceeding of freezing of bank accounts. However, the High Court declined to accept such submission, and held that provision under Section 102(3) Cr.P.C. is a mandatory provision, and where it has not been followed, it will entail a direction to defreeze the said accounts. In the present case, no report of seizure, as mandated under Section 102(3) Cr.P.C., was sent to the concerned magistrate and in view of the same, the writ petition was allowed, directing the Investigating Officer to defreeze the said accounts.
Also See: [Muktaben M.Mashru v. State of NCT of Delhi & Anr., 2019 SCC OnLine Del 11509, [Delhi High Court, Single Judge] follows the ratio laid down in Manish Khandelwal (Supra)]