Nowhere has the Supreme Court held that the right to legal representation includes right to the counsel of one's choice even though the person concerned does not have necessary funds. Such a proposition is also not found in M.H. Hoskot or Maneka Gandhi on which reliance is placed. If the petitioner- society had claimed any legal aid that could have been provided to it. No such application is made. Besides, we find that the petitioner-society has all along been represented by some of the finest counsel in the country. Therefore, seizure of the bank accounts has caused no prejudice to it. In any case, bank accounts which are frozen for investigation, particularly in respect of benami transactions cannot be defreezed on the specious ground that the petitioner-society wants to engage lawyer of its choice. The amounts lying in the bank accounts which create suspicion about commission of crime cannot be allowed to be depleted
2. In this p
etition filed under Article 226 of the Constitution of India, the petitioner-society has, inter alia, prayed that the letter dated 31/1/2011 issued by CBI in AJN 00-CRI-WP570.11 :3:
respect of accounts of the petitioner-society maintained with the State Bank of India in Wodehouse Road Branch and Cuffe Parade Branch be quashed. By the said letter, CBI has issued a direction to the State Bank of India to stop operation of the said accounts of the petitioner- society.
3. Gist of the facts stated in the petition will have to be noted.
(a) The petitioner-society is a society registered under the Maharashtra Co- operative Societies Act, 1960. It has 102 members. The petitioner-society and its members were allotted, on occupancy basis, 6428.5 sq. meters of land owned by the Government of Maharashtra situate in the Backbay Reclamation Area in Block
No.VI in Colaba, Mumbai. The petitioner- society paid a total amount of Rs. AJN 00-CRI-WP570.11 :4:
16,33,22,292/-. It was duly granted all necessary permissions. Occupation Certificate was granted on 16/9/2010. A complaint was registered by the Ministry of Defence, Government of India with the CBI requesting the CBI to conduct enquiry
about the alleged irregularities concerning the petitioner-society. Upon the complaint being received, the CBI conducted a preliminary enquiry.
(b) On 29/1/2011, the CBI registered FIR against several persons connected with the petitioner-society under Sections 120-B, 420, 468 and 471 of the Indian Penal Code, 1860 (for short, "the IPC") and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (for short, "the P.C. Act") alleging that, the accused abused their official position, AJN 00-CRI-WP570.11 :5:
manipulated and fabricated the records to achieve their objective of getting the land allotted in favour of the petitioner-society in an illegal manner. It is further alleged that various clearances from Municipal Authorities and other State Government Authorities were taken in an illegal manner. It was alleged that the accused abused their official position and obtained for themselves and for their close relations, property rights over flats in the petitioner- society at a very low cost compared to the market value.
(c) The investigation was started. The office of the petitioner-society was searched and several documents, writings, etc. were seized. Similarly, residences of the accused were searched. The CBI seized all the documents required by the petitioner- AJN 00-CRI-WP570.11 :6:
society for operating its bank accounts such as bank passbooks, cheque books,
statement of bank accounts, etc. On 31/1/2010, the CBI wrote to the State Bank of India, Wodehouse Road Branch and
Cuffe Parade Branch directing them to stop operation of the said bank accounts and not to allow their operation without further instructions from the CBI. The CBI did not serve any notice on the petitioner- society prior to freezing of the said accounts. The petitioner-society came to know about the said direction issued by the CBI through a letter addressed by the State Bank of India to it on 1/2/2011. Being aggrieved by this action of the CBI, the petitioner-society has approached this court.
4. We have heard Mr. Thorat, learned senior counsel AJN 00-CRI-WP570.11 :7:
appearing for the petitioner-society and Mr. Khambatta, learned Additional Solicitor General appearing for respondents 1 and 3. We have perused the affidavit-in- reply of Mr. Ravindra Singh, Addl. Superintendent of Police, CBI, dated 15/3/2011 and affidavit-in-rejoinder and additional affidavit of Lt. (Commander) (Retd.) G.S Grewal. We have also carefully perused the written submissions filed by the petitioner-society and the CBI.
5. Mr. Thorat, learned senior counsel submitted that the unlawful and unjust freezing of accounts of the petitioner- society must be set aside. Counsel submitted that it is alleged in the FIR that 13 persons who are members of the petitioner-society conspired with each other with the intention to illegally get land allotted in its favour. The period during which the offences are alleged to have been committed is prior to 2004. The amount lying deposited in the petitioner-society's two accounts in the State Bank of India have been deposited on or about 1/11/2010 in the form of contribution from the members of the petitioner- AJN 00-CRI-WP570.11 :8:
society for the purpose, inter alia, of meeting the expenses of litigation initiated against the petitioner- society. Thus, ex facie, there is no connection between the said amount and the alleged offences.
6. Counsel further submitted that the petitioner-society is a society registered under the Maharashtra Co- operative Societies Act, 1960. It is a separate and legal entity. It is statutorily required to open bank account so as to discharge its financial commitments through its operation. It is required to make payments towards (a) security agencies for the purpose of security of its building and compound, (b) maintenance of building and its precincts. The building has a lift. If it is not maintained, it will become junk, (c) pending invoices of contractors and other service providers who have rendered their service towards construction of the building, (d) payment towards advocates and counsel engaged by the petitioner-society in various litigations concerning the petitioner-society, (e) salary of the staff of the petitioner-society and (f) AJN 00-CRI-WP570.11 :9:
payment of statutory dues. Due to the freezing of its accounts, the petitioner-society has not been able to make the above payments.
7. Counsel further submitted that freezing of the accounts has caused injustice to the petitioner-society. It is deprived of its right to engage a lawyer of its choice. There is thus violation of its fundamental rights guaranteed by the Constitution of India under Articles 14, 19 and 21. In this connection, counsel relied on the judgments of the Supreme Court in Madhav Hayawadanrao Hoskot v. State of Maharashtra 1, Maneka Gandhi v. Union of India2 and Hussainara Khatoon & Ors. v. Home Secretary, State of Bihar, Patna.3 Counsel pointed out that the petitioner-society had addressed a letter to the bank requesting it to allow it to open a new account, however, permission was denied.
8. Counsel submitted that the CBI has not collected any 1 AIR 1978 SC 1548.
2 AIR 1978 SC 597.
3 AIR 1979 SC 1369.
AJN 00-CRI-WP570.11 : 10 :
material against the petitioner-society to establish causal connection between the funds deposited in its bank accounts and the alleged offence. The only evidence is found in paragraphs 12 and 13 of the affidavit of Mr. Singh, where it is stated that this amount would be utilized to tamper with the evidence which submission is too farfetched. Relying on the judgment of learned Single Judge of the Madras High Court in His Holiness Sri Kanchi Kamakoti Peetadipathi Jagadguru Sri Sankaracharya Swamigal Srimatam Samasthanam represented by its Manager v. The State of Tamil Nadu represented by the Secretary to Government Home Department and Ors.,4 counsel submitted that bank account cannot be frozen on this ground. Seizure under Section 102 of the Code of Criminal Procedure, 1973 (for short, "the Code") can be done in respect of assets which are a direct outcome of the crime.
9. Counsel submitted that the petitioner-society is not the accused in the FIR. There is no reference to the bank 4 (2005) 1 CTC 657.
AJN 00-CRI-WP570.11 : 11 :
accounts in the FIR. Retention of money in the accounts, by no stretch of imagination can be said to be a requirement for investigation into the source of funds or to determine whether any account is benami. It is alleged that the accused have generated money from benami transactions, however, there is no allegation that this amount is deposited in the petitioner-society's accounts which are seized.
10. Counsel submitted that no notice was given to the petitioner-society prior to freezing of accounts. Relying on the judgment of this court in Shashikant D. Karnik v. State of Maharashtra 5, counsel submitted that therefore the seizure is bad. Counsel also relied on Anwar Ahmad v. State of U.P. 6, B. Ranganathan v. State & Ors.7 and R. Chandrasekar v. Inspector of Police, Salem & Anr.8 Counsel submitted that in the circumstances, this court should direct the CBI to forthwith defreeze the seized accounts. 5 2007 (2) Bom.C.R.87.
6 1976 Cri.L.J. 620.
7 2003 Cri.L.J. 2779.
8 2003 Cri.L.J. 294.
AJN 00-CRI-WP570.11 : 12 :
11. Mr. Khambatta, learned Additional Solicitor General appearing for the Union of India and the CBI, on the other hand, submitted that no case is made out for defreezing the accounts. He submitted that scope of Section 102 of the Code is very wide. It contemplates seizure of any property. Property of an accused or even property of a non-accused could be seized provided, it is found in circumstances which create suspicion about commission of an offence. Drawing our attention to the definition of the term 'suspicion' given in P. Ramanatha Aiyar's Advanced Law Lexicon Vol.4 (2005), counsel submitted that attachment of the property may be backed with slight or no evidence. In this connection, counsel also relied on judgment of the Division Bench of the Andhra Pradesh High Court in K. Munivelu v. The Government of India9. Counsel submitted that State of Maharashtra v. Tapas Neogy 10 is the case on the point. Counsel also relied on the Full Bench decision of 9 AIR 1972 AP 318.
10 (1999) 7 SCC 685.
AJN 00-CRI-WP570.11 : 13 :
this court in Vinoskumar Ramchandran Valluvor v. State of Maharashtra 11, where it is held that Section 102 of the Code does not require issuance of a notice to a person before attachment of property. Counsel submitted that during the course of investigation, prima facie, it appeared that various public servants/private persons had acquired flats in the petitioner-society in benami names. In Writ Petition No.3359 of 2010 concerning the petitioner- society, on 17/3/2011, a Division Bench of this court directed the concerned officer to amend the FIR so as to invoke the provisions of the Benami Transactions (Prohibition) Act, 1988 (for short, "the Benami Act"). Counsel submitted that the investigation is at a crucial stage. It is to investigate the offences under the Benami Act that the accounts of the petitioner-society had to be seized. Counsel submitted that the accused are charged for offences under the P.C. Act. In the light of observations of the Supreme Court in Tapas Neogy, counsel submitted that the trial court may after conclusion of the trial, exercise its powers under Section 11 2011 (2) Bom. C.R. (Cri.) 179.
AJN 00-CRI-WP570.11 : 14 :
13 read with Section 16 of the P.C. Act while imposing fine. The trial court may take into consideration the amount or the value of the property which the accused has obtained or the pecuniary sources of the property which the accused is unable to satisfactorily account. It is, therefore, necessary to ensure that the money lying in the bank accounts of the petitioner-society is secured. If the seizure is lifted at this stage that will adversely affect the investigation.
12. Counsel submitted that it is true that the Supreme Court has held that the right to legal services is a fundamental right, but nowhere has it said that it includes the right of person to engage a counsel of his choice irrespective of the fact whether he has funds or not. Counsel submitted that the petitioner-society has so far not been prejudiced. This is evident from the fact that so far it has been defended by some of the finest lawyers of the country. In this connection, counsel also relied on the following two decisions of the Supreme Court of the AJN 00-CRI-WP570.11 : 15 :
United States (i) United States v. Monsanto12 and (ii) Caplin & Dysdale v. United States 13. Counsel submitted that the judgments cited by Mr. Thorat are not applicable to the facts of this case. Counsel submitted that in the circumstances, the petition deserves to be dismissed.
13. The members of the petitioner-society and others have been charged with offences punishable under Sections 120-B, 420, 468 and 471 of the IPC and under Section 13(2) read with section 13(1)(d) of the P.C. Act. It is, inter alia, alleged that the accused conspired with the Defence Service officers and functionaries of Government of Maharashtra and others with the intention to illegally get the land allotted in favour of the petitioner-society in which they were the members. The concerned public servants abused their official position, manipulated and fabricated the records to achieve their objective of getting the land allotted in favour of the petitioner-society in an 12 491 US 600 (1989).
13 49 U.S> 617 (1989)
AJN 00-CRI-WP570.11 : 16 :
illegal manner and also got various clearances from the Municipal Authorities and other State Government Authorities in an illegal manner and in lieu of this, abused their official position and obtained for themselves and for their close relations, property rights over flats at a very low cost compared to the market value.
14. From the affidavit of Mr. Ravindra Singh, Additional Superintendent of Police, CBI, it appears that during the course of investigation, CBI carried out searches of the office/residential premises of the main accused. Office of the petitioner-society was also searched on 30/1/2011. During preliminary investigation, it prima facie appeared that various public servants/private persons have acquired flats in the petitioner-society in benami names. In Writ Petition No.3359 of 2010, on 17/3/2011, a Division Bench of this court directed that due steps be taken to amend the FIR so as to invoke the provisions of the Benami Act, so that every membership of the petitioner- society is investigated into. Accordingly, CBI submitted a AJN 00-CRI-WP570.11 : 17 :
corrigendum to the FIR submitted to the Special Court, Mumbai, to include the provisions of the Benami Act in the FIR. It is stated by Mr. Singh in his affidavit that with a view to verifying benami transactions, purportedly made by the suspected accused persons, the operation of the bank accounts of the petitioner-society maintained with State Bank of India were seized after observing due process of law in order to verify the various transactions. To complete the narration of facts, we must note the information supplied to us by Mr. Khambatta, learned Addl. Solicitor General. Apart from the accounts of the petitioner-society, the CBI has frozen the accounts of the following accused i.e. (i) Mr. R.C. Thakur, (ii) Brig. (Retd.) Madan Mohan Wanchu, (iii) Mr. Kanhalyalal Gidwani, (iv) Mr. P.V. Deshmukh, (v) Mr. Ramanand Tiwari, (vi) Mr. Subhash Lal and (vii) Mr. Jairaj Phatak.
15. It is necessary to quote paragraphs 10, 11 and 12 of Mr. Singh's affidavit which clearly spell out CBI's stand and the reason why the accounts were seized. AJN 00-CRI-WP570.11 : 18 :
"10. It is true that Adarsh Co-op Hsg. Soc. LTD., petitioner here in is not
accused in this case. However, all transaction related to the accused
persons in this case are flowing from
this account and the operations there of are being carried out by the office
bearers of the Society. Who are the
accused in this case, therefore, to
investigate the issue of Benami
Transactions and other aspects the
seizure of this accounts was considered necessary.
11. Investigation revealed that accused K.L. Gidwani and his two sons, are having flat in Adarsh Co-op Hsg.
Soc. for which an amount of Rs. 56 lakhs (appx.) have been paid by each of his
sons whereas Rs. 82 lakhs (appx.) has
been paid by Shri K.L. Gidwani himself. Prima facie it is revealed that Shri
Gajanan S. Koli, Amol V. Kharbhari and Shri Kiran Bhadange have been shown
to have given loan of Rs. 51.3 lakhs by Shri Sunil Gidwani, Rs.52.04 lakhs by
Shri Amit Gidwani and Apeksha Impex P. Ltd., (belonging to accused K.L. Gidwani). Rs.52.4 lakhs was given to
Shri Kiran Bhadange by Devi Gidwani
and Apeksha Impex P. Ltd. Shri Amol V. Kharbhari even dose not have a PAN no
of his own and has not even filed any IT return. This prima facie indicates that all the three flats are benami and
belonging to Shri K.L. Gidwani. Similar more transactions of Benami Transaction are evident which needs to AJN 00-CRI-WP570.11 : 19 :
be proved further under Benami Transaction Act.
12. If we allow to operate the society account, the proceeds of crime would be utilized to tamper with the evidence and also would get benefit of using the
amount in their own ways to indulge in illegal activities."
16. The above case of the CBI will have to be kept in mind while dealing with the submissions of counsel for the petitioner-society. Since we are concerned with the interpretation of Section 102 of the Code, it is necessary to quote sub-section (1) thereof for ready reference.
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.
17. In Tapas Neogy, the Supreme Court was considering whether a police officer investigating into an offence can issue prohibitory order in respect of the bank AJN 00-CRI-WP570.11 : 20 :
account of the accused in exercise of power under Section 102 of the Code. The Supreme Court held that the bank account of the accused or any of his relations is 'property' within the meaning of Section 102 of the 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 which the police is investigating into. The Supreme Court found that Section 102 is cast in the widest terms. The following observations of the Supreme Court are material. "6. 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
preconditions for applicability of Section 102(1) are that it must be "property"
and secondly, in respect of the said
property there must have been suspicion of commission of any offence. AJN 00-CRI-WP570.11 : 21 :
18. Thus, the Supreme Court has noted that the use of the words 'any property' and 'any offence' in sub-section (1) of Section 102 of the Code indicates its wide applicability. Seizure under Section 102 can be effected in respect of property which may be alleged or suspected to have been stolen or in respect of property found under circumstances which create suspicion about the commission of an offence. As rightly pointed out by Mr. Khambatta, learned Additional Solicitor General, in P. Ramanatha Aiyar's Advanced Law Lexicon Vol.4, (2005), the word 'suspicion' is defined as being imagination of the existence of something without proof, or upon very slight evidence or upon no evidence at all. In this connection, reliance placed on the judgment of the Division Bench of the Andhra Pradesh High Court in K. Munivelu is apt. In that case, the Andhra Pradesh High Court has stated that the word 'suspicion' regarding a fact is the first and initial stage for believing the existence of certain thing or alleged fact. Information is then collected by investigation and examined to come to a final AJN 00-CRI-WP570.11 : 22 :
conclusion on the basis of the information that the thing or condition or fact exists.
19. Admittedly, provisions of Benami Act have been applied to this case. Section 3 of the Benami Act prohibits benami transactions. Section 2(a) defines benami transactions. Section 5 provides that property held benami is liable to acquisition and no money will be payable for such an acquisition. Section 2(c) defines 'property' as follows:
"2(c) 'property' means property of any kind, whether moveable or immoveable,
tangible or intangible and includes any right or interest in such property."
This definition is of wide amplitude.
20. We have already quoted relevant portions of the affidavit of Mr. Singh, the Superintendent of Police, CBI. He has stated that investigation has, prima facie, revealed that the various public servants/private persons have AJN 00-CRI-WP570.11 : 23 :
acquired flats in the petitioner-society in benami names and all the transactions related to the accused persons are flowing from the accounts which are seized. It is further stated that the operations of these accounts are being carried out by the office bearers of the petitioner- society, who are the accused and the said accounts are seized with a view to verifying the benami transactions. Thus, if the investigating agency, at this crucial stage of investigation as regards benami transactions, entertains any suspicion about the bank accounts of the petitioner- society, which are in the light of Tapas Neogy, a 'property' within the meaning of Section 102 of the Code, their seizure cannot be faulted. In the circumstances of the case, investigating agency would be right in concluding that the said bank accounts create suspicion about commission of an offence. The contention that the offence is alleged to have been committed prior to 2004 and the money has been deposited in the accounts by the members in the form of contribution on or about 1/11/2010 for meeting the expenses of the AJN 00-CRI-WP570.11 : 24 :
petitioner-society and, therefore, the offence has no casual connection with the amounts deposited in the seized accounts must be rejected. We are also unable to accept the submission that retention of money in the accounts is not necessary for investigating into the source of funds or to determine whether any account is benami. It is improper at this stage to draw such conclusions. Investigating agency must be given a free hand to determine the course of its investigation. We cannot trench upon its domain.
21. It is also necessary to bear in mind that the accused have been charged under Section 13(2) read with Section 13(1)(d) of the P.C. Act. Section 16 of the P.C. Act states the matters which the court has to take into consideration for fixing fine. Section 16 reads thus: "16. Matters to be taken into
consideration for fixing fine. - Where a sentence of fine is imposed under sub- section (2) of Section 13 of Section 14, the court in fixing the amount of the fine shall take into consideration the amount or the value of the property, if any,
AJN 00-CRI-WP570.11 : 25 :
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 referred to in that clause for which the accused person is unable to account
satisfactorily."
22. Section 16 of the P.C. Act indicates that on conclusion of the trial, if the court wants to impose fine, it has to take into consideration the amount or the value of the property which the accused had obtained by committing the offence. In Tapas Neogy, the Supreme Court observed that the time consumed by the courts in concluding the trials is another factor, which should be borne in mind while interpreting the provisions of Section 102 of the 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 the 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 AJN 00-CRI-WP570.11 : 26 :
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. The Supreme Court also observed that in the P.C. Act, 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. The Supreme Court observed that therefore, the interpretation given by it in respect of the power of seizure under Section 102 of the Code was in accordance with the intention of the legislatures engrafted in Section 16 of the P.C. Act.
23. Examined in the light of the above observations of the Supreme Court, in our opinion, the action of the investigating agency in seizing the bank accounts of the petitioner-society is justified. The money lying in the said account cannot be allowed to be dessipated or depleted as the said amount would have great relevance at the AJN 00-CRI-WP570.11 : 27 :
conclusion of the trial in case the trial court decides to impose the sentence of fine. This answers the contention raised by the counsel for the petitioner-society that retention of amount in the bank accounts is not necessary. In this connection, it is also necessary to refer to the judgment of the Full Bench of this court in Vinoskumar Valluvar. The Full Bench highlighted the need to preserve the property suspected to have been used in the commission of offence from being disseminated, depleted or destroyed. This judgment also provides answer to the argument advanced by the counsel for the petitioner-society that no notice was given to the petitioner-society before seizing its accounts. The Full Bench has clarified that no such notice is necessary. We may quote the relevant observations of the Full Bench.
"18. It is, therefore, clear that 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 AJN 00-CRI-WP570.11 : 28 :
property. It is necessarily temporary i.e. till the merit of the case is decided. It clothes the Investigating Officers 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 would indeed be absurd to suggest 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. "
Reliance placed on the judgment of this court in Shashikant Karnik by the counsel for the petitioner- society to buttress the contention that notice ought to have been given to the petitioner-society is, therefore, misplaced.
24. There is also no substance in the contention of Mr. AJN 00-CRI-WP570.11 : 29 :
Thorat that since the petitioner-society is not the accused, its bank accounts cannot be seized. We have already referred to Tapas Neogy. There is no doubt that amplitude of Section 102 of the Code is very wide. It empowers the police officers to seize properties not only of the accused but of any of his relatives or any other person who could be concerned with the said property. The requirement is only that it must be found under the circumstances which create suspicion about the commission of an offence. In Tapas Neogy, the Supreme Court has observed that the bank account of the accused or any of his relations is 'property' within the meaning of Section 102 of the Code. This would apply with more force in cases involving illegal gratification/gain and benami transactions. The fact that the accused are members of the petitioner-society has great relevance. In the circumstances, we find nothing wrong in seizure of the bank accounts of the petitioner-society though the petitioner-society is not cited as an accused. Considering the intention of the legislature behind enacting Section AJN 00-CRI-WP570.11 : 30 :
102 of the Code and also upon giving effect to its plain language, we are unable to give any restricted meaning to it. Once action is taken under this section, it is clear that the property needs to be protected during investigation. Its wide amplitude cannot be restricted by ordering release of some property on the ground that statutory dues are to be paid or lawyers fees have to be paid. It is necessary to state here that since one of the grounds on which the petitioner-society has prayed for defreezing the accounts was the need to pay statutory dues, we had called upon the CBI to state whether the amounts of statutory dues could be released from the frozen accounts. Without prejudice to the rights and contentions of the CBI, Mr. Khambatta, learned Additional Solicitor General had submitted that the statutory dues would be released provided detailed particulars of the bills are furnished. However, the petitioner-society did not accept this offer.
25. We also do not find any substance in the contention AJN 00-CRI-WP570.11 : 31 :
that the impugned action of the CBI has affected the petitioner-society's right to legal representation being part of its fundamental right under Article 21 of the Constitution of India. It is true that the Supreme Court has held that right to legal services is a fundamental right. We may quote the relevant paragraph of the Supreme Court judgment in Hussainara Khatoon.
"This Article also emphasizes that free legal service is an unalienable element of 'reasonable, fair and just' procedure for without it a person suffering from economic or other disabilities would be deprived of the opportunity for securing justice. The right to free legal services is, therefore, clearly an essential
ingredient of 'reasonable, fair and just' procedure for a person accused of an
offence and it must be held implicit in the guarantee of Article 21. This is a constitutional right of every accused
person who is unable to engage a
lawyer and secure legal services on
account of reasons such as poverty,
indigence or incommunicado situation
and the State is under a mandate to
provide a lawyer to an accused person if the circumstances of the case and the
needs of justice so required, provided of course the accused person does not
object to the provision of such
lawyer ....."
AJN 00-CRI-WP570.11 : 32 :
26. However, nowhere has the Supreme Court held that the right to legal representation includes right to the counsel of one's choice even though the person concerned does not have necessary funds. Such a proposition is also not found in M.H. Hoskot or Maneka Gandhi on which reliance is placed. If the petitioner- society had claimed any legal aid that could have been provided to it. No such application is made. Besides, we find that the petitioner-society has all along been represented by some of the finest counsel in the country. Therefore, seizure of the bank accounts has caused no prejudice to it. In any case, bank accounts which are frozen for investigation, particularly in respect of benami transactions cannot be defreezed on the specious ground that the petitioner-society wants to engage lawyer of its choice. The amounts lying in the bank accounts which create suspicion about commission of crime cannot be allowed to be depleted. In this connection, we may usefully refer to two decisions of the Supreme Court of the AJN 00-CRI-WP570.11 : 33 :
United States to which our attention was drawn by Mr. Khambatta, learned Additional Solicitor General. In Monsanto and Caplin & Dysdole, the U.S. Supreme Court rejected the constitutional challenge to a statute providing for forfeiture of an accused's property. The challenge was on the ground that the accused was denied his constitutional right to counsel of his choice (6th Amendment) and that the due process clause (5th Amendment) stood violated. The U.S. Supreme Court held that the language of the statute concerned was unambiguous and did not exclude or make an exception for money which the accused wanted to pay his lawyer, out of forfeited property or in respect of pre-trial restraining orders (made on a probable cause basis) in respect of properties of the accused. It was further held that the accused's constitutional right did not extend to permitting him to use assets adjudged to be forefeitable to pay his lawyer's fees.
27. We shall now refer to some of the cases which we AJN 00-CRI-WP570.11 : 34 :
have not discussed though reliance is placed on them by the petitioner-society. Anwar Ahmed's case is not applicable to this case because there the court was dealing with an issue whether a police officer can take a bond from a person to whom the property is entrusted under Section 523 of the old Criminal Procedure Code. In Kanchi Kamakoti Peetadhipathi, learned Single Judge of the Madras High Court was dealing with a case where bank accounts of the Mutt were seized due to the commission of offence punishable under Section 302 of the IPC by the head of the Mutt. Facts of that case, therefore, materially differ from the present case. Learned Single Judge however, observed that if the accused were public servants and investigation was about illegal gratification, invocation of Section 102 of the Code would be justified. In our opinion, in view of the authoritative pronouncement of the Supreme Court in Tapas Neogy that property of a person who is not an accused can also be seized under Section 102 of the Code, contrary view taken by the Madras High Court in AJN 00-CRI-WP570.11 : 35 :
this case, is per incurriam.
28. In the ultimate analysis, we are of the view that freezing of the accounts of the petitioner-society cannot be interfered with by us. We find no substance in the petition. The petition is, therefore, rejected. [SMT. RANJANA DESAI, J.]
[RANJIT MORE, J.]
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Bombay High Court
Adarsh Co-Operative Housing vs Union Of India, Near Cgo on 27 July, 2011
Bench: Ranjana Desai, R. V. More
1. The petitioner is a society registered under the Maharashtra Co-operative Societies Act, 1960 (for convenience, "the petitioner-society"). Respondent 1 is the Union of India. Respondent 2 is the State of Maharashtra and Respondent No.3 is the Central Bureau of Investigation, Anti Corruption Branch (for short, "the CBI"), who is currently investigating certain matters connected with the petitioner-society and its members. 2. In this p
etition filed under Article 226 of the Constitution of India, the petitioner-society has, inter alia, prayed that the letter dated 31/1/2011 issued by CBI in AJN 00-CRI-WP570.11 :3:
respect of accounts of the petitioner-society maintained with the State Bank of India in Wodehouse Road Branch and Cuffe Parade Branch be quashed. By the said letter, CBI has issued a direction to the State Bank of India to stop operation of the said accounts of the petitioner- society.
3. Gist of the facts stated in the petition will have to be noted.
(a) The petitioner-society is a society registered under the Maharashtra Co- operative Societies Act, 1960. It has 102 members. The petitioner-society and its members were allotted, on occupancy basis, 6428.5 sq. meters of land owned by the Government of Maharashtra situate in the Backbay Reclamation Area in Block
No.VI in Colaba, Mumbai. The petitioner- society paid a total amount of Rs. AJN 00-CRI-WP570.11 :4:
16,33,22,292/-. It was duly granted all necessary permissions. Occupation Certificate was granted on 16/9/2010. A complaint was registered by the Ministry of Defence, Government of India with the CBI requesting the CBI to conduct enquiry
about the alleged irregularities concerning the petitioner-society. Upon the complaint being received, the CBI conducted a preliminary enquiry.
(b) On 29/1/2011, the CBI registered FIR against several persons connected with the petitioner-society under Sections 120-B, 420, 468 and 471 of the Indian Penal Code, 1860 (for short, "the IPC") and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (for short, "the P.C. Act") alleging that, the accused abused their official position, AJN 00-CRI-WP570.11 :5:
manipulated and fabricated the records to achieve their objective of getting the land allotted in favour of the petitioner-society in an illegal manner. It is further alleged that various clearances from Municipal Authorities and other State Government Authorities were taken in an illegal manner. It was alleged that the accused abused their official position and obtained for themselves and for their close relations, property rights over flats in the petitioner- society at a very low cost compared to the market value.
(c) The investigation was started. The office of the petitioner-society was searched and several documents, writings, etc. were seized. Similarly, residences of the accused were searched. The CBI seized all the documents required by the petitioner- AJN 00-CRI-WP570.11 :6:
society for operating its bank accounts such as bank passbooks, cheque books,
statement of bank accounts, etc. On 31/1/2010, the CBI wrote to the State Bank of India, Wodehouse Road Branch and
Cuffe Parade Branch directing them to stop operation of the said bank accounts and not to allow their operation without further instructions from the CBI. The CBI did not serve any notice on the petitioner- society prior to freezing of the said accounts. The petitioner-society came to know about the said direction issued by the CBI through a letter addressed by the State Bank of India to it on 1/2/2011. Being aggrieved by this action of the CBI, the petitioner-society has approached this court.
4. We have heard Mr. Thorat, learned senior counsel AJN 00-CRI-WP570.11 :7:
appearing for the petitioner-society and Mr. Khambatta, learned Additional Solicitor General appearing for respondents 1 and 3. We have perused the affidavit-in- reply of Mr. Ravindra Singh, Addl. Superintendent of Police, CBI, dated 15/3/2011 and affidavit-in-rejoinder and additional affidavit of Lt. (Commander) (Retd.) G.S Grewal. We have also carefully perused the written submissions filed by the petitioner-society and the CBI.
5. Mr. Thorat, learned senior counsel submitted that the unlawful and unjust freezing of accounts of the petitioner- society must be set aside. Counsel submitted that it is alleged in the FIR that 13 persons who are members of the petitioner-society conspired with each other with the intention to illegally get land allotted in its favour. The period during which the offences are alleged to have been committed is prior to 2004. The amount lying deposited in the petitioner-society's two accounts in the State Bank of India have been deposited on or about 1/11/2010 in the form of contribution from the members of the petitioner- AJN 00-CRI-WP570.11 :8:
society for the purpose, inter alia, of meeting the expenses of litigation initiated against the petitioner- society. Thus, ex facie, there is no connection between the said amount and the alleged offences.
6. Counsel further submitted that the petitioner-society is a society registered under the Maharashtra Co- operative Societies Act, 1960. It is a separate and legal entity. It is statutorily required to open bank account so as to discharge its financial commitments through its operation. It is required to make payments towards (a) security agencies for the purpose of security of its building and compound, (b) maintenance of building and its precincts. The building has a lift. If it is not maintained, it will become junk, (c) pending invoices of contractors and other service providers who have rendered their service towards construction of the building, (d) payment towards advocates and counsel engaged by the petitioner-society in various litigations concerning the petitioner-society, (e) salary of the staff of the petitioner-society and (f) AJN 00-CRI-WP570.11 :9:
payment of statutory dues. Due to the freezing of its accounts, the petitioner-society has not been able to make the above payments.
7. Counsel further submitted that freezing of the accounts has caused injustice to the petitioner-society. It is deprived of its right to engage a lawyer of its choice. There is thus violation of its fundamental rights guaranteed by the Constitution of India under Articles 14, 19 and 21. In this connection, counsel relied on the judgments of the Supreme Court in Madhav Hayawadanrao Hoskot v. State of Maharashtra 1, Maneka Gandhi v. Union of India2 and Hussainara Khatoon & Ors. v. Home Secretary, State of Bihar, Patna.3 Counsel pointed out that the petitioner-society had addressed a letter to the bank requesting it to allow it to open a new account, however, permission was denied.
8. Counsel submitted that the CBI has not collected any 1 AIR 1978 SC 1548.
2 AIR 1978 SC 597.
3 AIR 1979 SC 1369.
AJN 00-CRI-WP570.11 : 10 :
material against the petitioner-society to establish causal connection between the funds deposited in its bank accounts and the alleged offence. The only evidence is found in paragraphs 12 and 13 of the affidavit of Mr. Singh, where it is stated that this amount would be utilized to tamper with the evidence which submission is too farfetched. Relying on the judgment of learned Single Judge of the Madras High Court in His Holiness Sri Kanchi Kamakoti Peetadipathi Jagadguru Sri Sankaracharya Swamigal Srimatam Samasthanam represented by its Manager v. The State of Tamil Nadu represented by the Secretary to Government Home Department and Ors.,4 counsel submitted that bank account cannot be frozen on this ground. Seizure under Section 102 of the Code of Criminal Procedure, 1973 (for short, "the Code") can be done in respect of assets which are a direct outcome of the crime.
9. Counsel submitted that the petitioner-society is not the accused in the FIR. There is no reference to the bank 4 (2005) 1 CTC 657.
AJN 00-CRI-WP570.11 : 11 :
accounts in the FIR. Retention of money in the accounts, by no stretch of imagination can be said to be a requirement for investigation into the source of funds or to determine whether any account is benami. It is alleged that the accused have generated money from benami transactions, however, there is no allegation that this amount is deposited in the petitioner-society's accounts which are seized.
10. Counsel submitted that no notice was given to the petitioner-society prior to freezing of accounts. Relying on the judgment of this court in Shashikant D. Karnik v. State of Maharashtra 5, counsel submitted that therefore the seizure is bad. Counsel also relied on Anwar Ahmad v. State of U.P. 6, B. Ranganathan v. State & Ors.7 and R. Chandrasekar v. Inspector of Police, Salem & Anr.8 Counsel submitted that in the circumstances, this court should direct the CBI to forthwith defreeze the seized accounts. 5 2007 (2) Bom.C.R.87.
6 1976 Cri.L.J. 620.
7 2003 Cri.L.J. 2779.
8 2003 Cri.L.J. 294.
AJN 00-CRI-WP570.11 : 12 :
11. Mr. Khambatta, learned Additional Solicitor General appearing for the Union of India and the CBI, on the other hand, submitted that no case is made out for defreezing the accounts. He submitted that scope of Section 102 of the Code is very wide. It contemplates seizure of any property. Property of an accused or even property of a non-accused could be seized provided, it is found in circumstances which create suspicion about commission of an offence. Drawing our attention to the definition of the term 'suspicion' given in P. Ramanatha Aiyar's Advanced Law Lexicon Vol.4 (2005), counsel submitted that attachment of the property may be backed with slight or no evidence. In this connection, counsel also relied on judgment of the Division Bench of the Andhra Pradesh High Court in K. Munivelu v. The Government of India9. Counsel submitted that State of Maharashtra v. Tapas Neogy 10 is the case on the point. Counsel also relied on the Full Bench decision of 9 AIR 1972 AP 318.
10 (1999) 7 SCC 685.
AJN 00-CRI-WP570.11 : 13 :
this court in Vinoskumar Ramchandran Valluvor v. State of Maharashtra 11, where it is held that Section 102 of the Code does not require issuance of a notice to a person before attachment of property. Counsel submitted that during the course of investigation, prima facie, it appeared that various public servants/private persons had acquired flats in the petitioner-society in benami names. In Writ Petition No.3359 of 2010 concerning the petitioner- society, on 17/3/2011, a Division Bench of this court directed the concerned officer to amend the FIR so as to invoke the provisions of the Benami Transactions (Prohibition) Act, 1988 (for short, "the Benami Act"). Counsel submitted that the investigation is at a crucial stage. It is to investigate the offences under the Benami Act that the accounts of the petitioner-society had to be seized. Counsel submitted that the accused are charged for offences under the P.C. Act. In the light of observations of the Supreme Court in Tapas Neogy, counsel submitted that the trial court may after conclusion of the trial, exercise its powers under Section 11 2011 (2) Bom. C.R. (Cri.) 179.
AJN 00-CRI-WP570.11 : 14 :
13 read with Section 16 of the P.C. Act while imposing fine. The trial court may take into consideration the amount or the value of the property which the accused has obtained or the pecuniary sources of the property which the accused is unable to satisfactorily account. It is, therefore, necessary to ensure that the money lying in the bank accounts of the petitioner-society is secured. If the seizure is lifted at this stage that will adversely affect the investigation.
12. Counsel submitted that it is true that the Supreme Court has held that the right to legal services is a fundamental right, but nowhere has it said that it includes the right of person to engage a counsel of his choice irrespective of the fact whether he has funds or not. Counsel submitted that the petitioner-society has so far not been prejudiced. This is evident from the fact that so far it has been defended by some of the finest lawyers of the country. In this connection, counsel also relied on the following two decisions of the Supreme Court of the AJN 00-CRI-WP570.11 : 15 :
United States (i) United States v. Monsanto12 and (ii) Caplin & Dysdale v. United States 13. Counsel submitted that the judgments cited by Mr. Thorat are not applicable to the facts of this case. Counsel submitted that in the circumstances, the petition deserves to be dismissed.
13. The members of the petitioner-society and others have been charged with offences punishable under Sections 120-B, 420, 468 and 471 of the IPC and under Section 13(2) read with section 13(1)(d) of the P.C. Act. It is, inter alia, alleged that the accused conspired with the Defence Service officers and functionaries of Government of Maharashtra and others with the intention to illegally get the land allotted in favour of the petitioner-society in which they were the members. The concerned public servants abused their official position, manipulated and fabricated the records to achieve their objective of getting the land allotted in favour of the petitioner-society in an 12 491 US 600 (1989).
13 49 U.S> 617 (1989)
AJN 00-CRI-WP570.11 : 16 :
illegal manner and also got various clearances from the Municipal Authorities and other State Government Authorities in an illegal manner and in lieu of this, abused their official position and obtained for themselves and for their close relations, property rights over flats at a very low cost compared to the market value.
14. From the affidavit of Mr. Ravindra Singh, Additional Superintendent of Police, CBI, it appears that during the course of investigation, CBI carried out searches of the office/residential premises of the main accused. Office of the petitioner-society was also searched on 30/1/2011. During preliminary investigation, it prima facie appeared that various public servants/private persons have acquired flats in the petitioner-society in benami names. In Writ Petition No.3359 of 2010, on 17/3/2011, a Division Bench of this court directed that due steps be taken to amend the FIR so as to invoke the provisions of the Benami Act, so that every membership of the petitioner- society is investigated into. Accordingly, CBI submitted a AJN 00-CRI-WP570.11 : 17 :
corrigendum to the FIR submitted to the Special Court, Mumbai, to include the provisions of the Benami Act in the FIR. It is stated by Mr. Singh in his affidavit that with a view to verifying benami transactions, purportedly made by the suspected accused persons, the operation of the bank accounts of the petitioner-society maintained with State Bank of India were seized after observing due process of law in order to verify the various transactions. To complete the narration of facts, we must note the information supplied to us by Mr. Khambatta, learned Addl. Solicitor General. Apart from the accounts of the petitioner-society, the CBI has frozen the accounts of the following accused i.e. (i) Mr. R.C. Thakur, (ii) Brig. (Retd.) Madan Mohan Wanchu, (iii) Mr. Kanhalyalal Gidwani, (iv) Mr. P.V. Deshmukh, (v) Mr. Ramanand Tiwari, (vi) Mr. Subhash Lal and (vii) Mr. Jairaj Phatak.
15. It is necessary to quote paragraphs 10, 11 and 12 of Mr. Singh's affidavit which clearly spell out CBI's stand and the reason why the accounts were seized. AJN 00-CRI-WP570.11 : 18 :
"10. It is true that Adarsh Co-op Hsg. Soc. LTD., petitioner here in is not
accused in this case. However, all transaction related to the accused
persons in this case are flowing from
this account and the operations there of are being carried out by the office
bearers of the Society. Who are the
accused in this case, therefore, to
investigate the issue of Benami
Transactions and other aspects the
seizure of this accounts was considered necessary.
11. Investigation revealed that accused K.L. Gidwani and his two sons, are having flat in Adarsh Co-op Hsg.
Soc. for which an amount of Rs. 56 lakhs (appx.) have been paid by each of his
sons whereas Rs. 82 lakhs (appx.) has
been paid by Shri K.L. Gidwani himself. Prima facie it is revealed that Shri
Gajanan S. Koli, Amol V. Kharbhari and Shri Kiran Bhadange have been shown
to have given loan of Rs. 51.3 lakhs by Shri Sunil Gidwani, Rs.52.04 lakhs by
Shri Amit Gidwani and Apeksha Impex P. Ltd., (belonging to accused K.L. Gidwani). Rs.52.4 lakhs was given to
Shri Kiran Bhadange by Devi Gidwani
and Apeksha Impex P. Ltd. Shri Amol V. Kharbhari even dose not have a PAN no
of his own and has not even filed any IT return. This prima facie indicates that all the three flats are benami and
belonging to Shri K.L. Gidwani. Similar more transactions of Benami Transaction are evident which needs to AJN 00-CRI-WP570.11 : 19 :
be proved further under Benami Transaction Act.
12. If we allow to operate the society account, the proceeds of crime would be utilized to tamper with the evidence and also would get benefit of using the
amount in their own ways to indulge in illegal activities."
16. The above case of the CBI will have to be kept in mind while dealing with the submissions of counsel for the petitioner-society. Since we are concerned with the interpretation of Section 102 of the Code, it is necessary to quote sub-section (1) thereof for ready reference.
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.
17. In Tapas Neogy, the Supreme Court was considering whether a police officer investigating into an offence can issue prohibitory order in respect of the bank AJN 00-CRI-WP570.11 : 20 :
account of the accused in exercise of power under Section 102 of the Code. The Supreme Court held that the bank account of the accused or any of his relations is 'property' within the meaning of Section 102 of the 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 which the police is investigating into. The Supreme Court found that Section 102 is cast in the widest terms. The following observations of the Supreme Court are material. "6. 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
preconditions for applicability of Section 102(1) are that it must be "property"
and secondly, in respect of the said
property there must have been suspicion of commission of any offence. AJN 00-CRI-WP570.11 : 21 :
18. Thus, the Supreme Court has noted that the use of the words 'any property' and 'any offence' in sub-section (1) of Section 102 of the Code indicates its wide applicability. Seizure under Section 102 can be effected in respect of property which may be alleged or suspected to have been stolen or in respect of property found under circumstances which create suspicion about the commission of an offence. As rightly pointed out by Mr. Khambatta, learned Additional Solicitor General, in P. Ramanatha Aiyar's Advanced Law Lexicon Vol.4, (2005), the word 'suspicion' is defined as being imagination of the existence of something without proof, or upon very slight evidence or upon no evidence at all. In this connection, reliance placed on the judgment of the Division Bench of the Andhra Pradesh High Court in K. Munivelu is apt. In that case, the Andhra Pradesh High Court has stated that the word 'suspicion' regarding a fact is the first and initial stage for believing the existence of certain thing or alleged fact. Information is then collected by investigation and examined to come to a final AJN 00-CRI-WP570.11 : 22 :
conclusion on the basis of the information that the thing or condition or fact exists.
19. Admittedly, provisions of Benami Act have been applied to this case. Section 3 of the Benami Act prohibits benami transactions. Section 2(a) defines benami transactions. Section 5 provides that property held benami is liable to acquisition and no money will be payable for such an acquisition. Section 2(c) defines 'property' as follows:
"2(c) 'property' means property of any kind, whether moveable or immoveable,
tangible or intangible and includes any right or interest in such property."
This definition is of wide amplitude.
20. We have already quoted relevant portions of the affidavit of Mr. Singh, the Superintendent of Police, CBI. He has stated that investigation has, prima facie, revealed that the various public servants/private persons have AJN 00-CRI-WP570.11 : 23 :
acquired flats in the petitioner-society in benami names and all the transactions related to the accused persons are flowing from the accounts which are seized. It is further stated that the operations of these accounts are being carried out by the office bearers of the petitioner- society, who are the accused and the said accounts are seized with a view to verifying the benami transactions. Thus, if the investigating agency, at this crucial stage of investigation as regards benami transactions, entertains any suspicion about the bank accounts of the petitioner- society, which are in the light of Tapas Neogy, a 'property' within the meaning of Section 102 of the Code, their seizure cannot be faulted. In the circumstances of the case, investigating agency would be right in concluding that the said bank accounts create suspicion about commission of an offence. The contention that the offence is alleged to have been committed prior to 2004 and the money has been deposited in the accounts by the members in the form of contribution on or about 1/11/2010 for meeting the expenses of the AJN 00-CRI-WP570.11 : 24 :
petitioner-society and, therefore, the offence has no casual connection with the amounts deposited in the seized accounts must be rejected. We are also unable to accept the submission that retention of money in the accounts is not necessary for investigating into the source of funds or to determine whether any account is benami. It is improper at this stage to draw such conclusions. Investigating agency must be given a free hand to determine the course of its investigation. We cannot trench upon its domain.
21. It is also necessary to bear in mind that the accused have been charged under Section 13(2) read with Section 13(1)(d) of the P.C. Act. Section 16 of the P.C. Act states the matters which the court has to take into consideration for fixing fine. Section 16 reads thus: "16. Matters to be taken into
consideration for fixing fine. - Where a sentence of fine is imposed under sub- section (2) of Section 13 of Section 14, the court in fixing the amount of the fine shall take into consideration the amount or the value of the property, if any,
AJN 00-CRI-WP570.11 : 25 :
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 referred to in that clause for which the accused person is unable to account
satisfactorily."
22. Section 16 of the P.C. Act indicates that on conclusion of the trial, if the court wants to impose fine, it has to take into consideration the amount or the value of the property which the accused had obtained by committing the offence. In Tapas Neogy, the Supreme Court observed that the time consumed by the courts in concluding the trials is another factor, which should be borne in mind while interpreting the provisions of Section 102 of the 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 the 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 AJN 00-CRI-WP570.11 : 26 :
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. The Supreme Court also observed that in the P.C. Act, 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. The Supreme Court observed that therefore, the interpretation given by it in respect of the power of seizure under Section 102 of the Code was in accordance with the intention of the legislatures engrafted in Section 16 of the P.C. Act.
23. Examined in the light of the above observations of the Supreme Court, in our opinion, the action of the investigating agency in seizing the bank accounts of the petitioner-society is justified. The money lying in the said account cannot be allowed to be dessipated or depleted as the said amount would have great relevance at the AJN 00-CRI-WP570.11 : 27 :
conclusion of the trial in case the trial court decides to impose the sentence of fine. This answers the contention raised by the counsel for the petitioner-society that retention of amount in the bank accounts is not necessary. In this connection, it is also necessary to refer to the judgment of the Full Bench of this court in Vinoskumar Valluvar. The Full Bench highlighted the need to preserve the property suspected to have been used in the commission of offence from being disseminated, depleted or destroyed. This judgment also provides answer to the argument advanced by the counsel for the petitioner-society that no notice was given to the petitioner-society before seizing its accounts. The Full Bench has clarified that no such notice is necessary. We may quote the relevant observations of the Full Bench.
"18. It is, therefore, clear that 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 AJN 00-CRI-WP570.11 : 28 :
property. It is necessarily temporary i.e. till the merit of the case is decided. It clothes the Investigating Officers 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 would indeed be absurd to suggest 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. "
Reliance placed on the judgment of this court in Shashikant Karnik by the counsel for the petitioner- society to buttress the contention that notice ought to have been given to the petitioner-society is, therefore, misplaced.
24. There is also no substance in the contention of Mr. AJN 00-CRI-WP570.11 : 29 :
Thorat that since the petitioner-society is not the accused, its bank accounts cannot be seized. We have already referred to Tapas Neogy. There is no doubt that amplitude of Section 102 of the Code is very wide. It empowers the police officers to seize properties not only of the accused but of any of his relatives or any other person who could be concerned with the said property. The requirement is only that it must be found under the circumstances which create suspicion about the commission of an offence. In Tapas Neogy, the Supreme Court has observed that the bank account of the accused or any of his relations is 'property' within the meaning of Section 102 of the Code. This would apply with more force in cases involving illegal gratification/gain and benami transactions. The fact that the accused are members of the petitioner-society has great relevance. In the circumstances, we find nothing wrong in seizure of the bank accounts of the petitioner-society though the petitioner-society is not cited as an accused. Considering the intention of the legislature behind enacting Section AJN 00-CRI-WP570.11 : 30 :
102 of the Code and also upon giving effect to its plain language, we are unable to give any restricted meaning to it. Once action is taken under this section, it is clear that the property needs to be protected during investigation. Its wide amplitude cannot be restricted by ordering release of some property on the ground that statutory dues are to be paid or lawyers fees have to be paid. It is necessary to state here that since one of the grounds on which the petitioner-society has prayed for defreezing the accounts was the need to pay statutory dues, we had called upon the CBI to state whether the amounts of statutory dues could be released from the frozen accounts. Without prejudice to the rights and contentions of the CBI, Mr. Khambatta, learned Additional Solicitor General had submitted that the statutory dues would be released provided detailed particulars of the bills are furnished. However, the petitioner-society did not accept this offer.
25. We also do not find any substance in the contention AJN 00-CRI-WP570.11 : 31 :
that the impugned action of the CBI has affected the petitioner-society's right to legal representation being part of its fundamental right under Article 21 of the Constitution of India. It is true that the Supreme Court has held that right to legal services is a fundamental right. We may quote the relevant paragraph of the Supreme Court judgment in Hussainara Khatoon.
"This Article also emphasizes that free legal service is an unalienable element of 'reasonable, fair and just' procedure for without it a person suffering from economic or other disabilities would be deprived of the opportunity for securing justice. The right to free legal services is, therefore, clearly an essential
ingredient of 'reasonable, fair and just' procedure for a person accused of an
offence and it must be held implicit in the guarantee of Article 21. This is a constitutional right of every accused
person who is unable to engage a
lawyer and secure legal services on
account of reasons such as poverty,
indigence or incommunicado situation
and the State is under a mandate to
provide a lawyer to an accused person if the circumstances of the case and the
needs of justice so required, provided of course the accused person does not
object to the provision of such
lawyer ....."
AJN 00-CRI-WP570.11 : 32 :
26. However, nowhere has the Supreme Court held that the right to legal representation includes right to the counsel of one's choice even though the person concerned does not have necessary funds. Such a proposition is also not found in M.H. Hoskot or Maneka Gandhi on which reliance is placed. If the petitioner- society had claimed any legal aid that could have been provided to it. No such application is made. Besides, we find that the petitioner-society has all along been represented by some of the finest counsel in the country. Therefore, seizure of the bank accounts has caused no prejudice to it. In any case, bank accounts which are frozen for investigation, particularly in respect of benami transactions cannot be defreezed on the specious ground that the petitioner-society wants to engage lawyer of its choice. The amounts lying in the bank accounts which create suspicion about commission of crime cannot be allowed to be depleted. In this connection, we may usefully refer to two decisions of the Supreme Court of the AJN 00-CRI-WP570.11 : 33 :
United States to which our attention was drawn by Mr. Khambatta, learned Additional Solicitor General. In Monsanto and Caplin & Dysdole, the U.S. Supreme Court rejected the constitutional challenge to a statute providing for forfeiture of an accused's property. The challenge was on the ground that the accused was denied his constitutional right to counsel of his choice (6th Amendment) and that the due process clause (5th Amendment) stood violated. The U.S. Supreme Court held that the language of the statute concerned was unambiguous and did not exclude or make an exception for money which the accused wanted to pay his lawyer, out of forfeited property or in respect of pre-trial restraining orders (made on a probable cause basis) in respect of properties of the accused. It was further held that the accused's constitutional right did not extend to permitting him to use assets adjudged to be forefeitable to pay his lawyer's fees.
27. We shall now refer to some of the cases which we AJN 00-CRI-WP570.11 : 34 :
have not discussed though reliance is placed on them by the petitioner-society. Anwar Ahmed's case is not applicable to this case because there the court was dealing with an issue whether a police officer can take a bond from a person to whom the property is entrusted under Section 523 of the old Criminal Procedure Code. In Kanchi Kamakoti Peetadhipathi, learned Single Judge of the Madras High Court was dealing with a case where bank accounts of the Mutt were seized due to the commission of offence punishable under Section 302 of the IPC by the head of the Mutt. Facts of that case, therefore, materially differ from the present case. Learned Single Judge however, observed that if the accused were public servants and investigation was about illegal gratification, invocation of Section 102 of the Code would be justified. In our opinion, in view of the authoritative pronouncement of the Supreme Court in Tapas Neogy that property of a person who is not an accused can also be seized under Section 102 of the Code, contrary view taken by the Madras High Court in AJN 00-CRI-WP570.11 : 35 :
this case, is per incurriam.
28. In the ultimate analysis, we are of the view that freezing of the accounts of the petitioner-society cannot be interfered with by us. We find no substance in the petition. The petition is, therefore, rejected. [SMT. RANJANA DESAI, J.]
[RANJIT MORE, J.]
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