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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1099 OF 2017
(Arising out of SLP(Crl.) No. 6474 of 2016)
TEESTA ATUL SETALVAD …Appellant(s)
:Versus:
THE STATE OF GUJARAT …Respondent(s)
WITH
CRIMINAL APPEAL NO. 1083 OF 2017
(Arising out of SLP(Crl.) No.6477 of 2016)
JAVED IFTEKHER AHMED ANAND …Appellant(s)
:Versus:
THE STATE OF GUJARAT & ORS. …Respondent(s)
AND
CRIMINAL APPEAL NO. 1084 OF 2017
(Arising out of SLP(Crl.) No.6476 of 2016)
CITIZENS FOR JUSTICE & PEACE …Appellant(s)
:Versus:
THE STATE OF GUJARAT & ORS. …Respondent(s)
AND
CRIMINAL APPEAL NO. 1085 OF 2017
(Arising out of SLP(Crl.) No.6475 of 2016)
SABRANG TRUST …Appellant(s)
:Versus:
THE STATE OF GUJARAT & ORS. …Respondent(s)
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J U D G M E N T
A.M. Khanwilkar, J.
1. The common question posed in these appeals centres around
the sweep, purport and applicability of Section 102 of the Code of
Criminal Procedure, 1973 (hereinafter referred to as “the Code”),
which reads thus:
“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 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
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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.”
2. The bank accounts, in all nine, of the appellants have been
seized on the instructions of the Investigating Officer as a sequel to
the complaint filed by the members of Gulberg Co-Operative
Housing Society, registered by D.C.P. Police Station, bearing CR
No.1/2014, on 14th January, 2014 for offence punishable under
Sections 406, 420 and 120B of the Indian Penal Code and Section
72A of the Information Technology Act, 2000. The bank accounts
were seized and intimation in that behalf was given to the
concerned Magistrate on 21st January, 2014. The appellants filed a
petition before the Bombay High Court, being Writ Petition
(Criminal) No.173/2014, for quashing of the FIR and for setting
aside the freezing order which, however, was rejected on 4th
November, 2014 with liberty to the appellants to approach the
jurisdictional court. Against the said decision the appellants
preferred special leave petition before this Court, being Special
Leave Petition (Criminal) No.3330/2014, which was allowed to be
withdrawn on 5th May, 2014 with liberty to the appellants to move
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before the Competent Authority. The appellants then filed Special
Criminal Application No.2710/2014 before the High Court of
Gujarat at Ahmedabad. That application was, however, withdrawn
on 29th September, 2014 with liberty to approach the concerned
Magistrate for appropriate relief.
3. The appellants thereafter moved formal applications before the
Metropolitan Magistrate’s Court at Ahmedabad, being
Miscellaneous Application Nos.175-178/2014 which were dismissed
by common order dated 28th November, 2014 passed by Additional
Chief Metropolitan Magistrate, Ahmedabad. Aggrieved, the
appellants filed four separate revision applications before the High
Court of Gujarat at Ahmedabad, bearing Criminal Revision
Application Nos.249-252 of 2015. While the said revision
applications were pending, the anticipatory bail application filed by
the appellants in connection with the alleged offence came to be
rejected by the High Court by a speaking order dated 12th February,
2015. That order has been challenged by way of Special Leave
Petition (Criminal) No.1512/2015 which has been converted into
Criminal Appeal No.338/2015 and is pending for consideration by a
larger Bench in terms of order dated 19th March, 2015. The
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appellants have been given interim protection of stay of arrest
during the pendency of the said appeal.
4. The other relevant fact to be noted is that additional offences
have been added to the FIR in relation to which the bank account
freezing directions were issued by the Investigating Officer,
punishable under Sections 467 and 471 of the Indian Penal Code
(“IPC”). Besides, the Competent Authority under the Foreign
Contribution (Regulation) Act, 1976 issued orders on 23rd July,
2015, categorising the authorization in respect of Citizens for
Justice and Peace Trust (“CJP Trust”, appellant in Criminal Appeal
No.1084/2017), as “prior permission”. In so far as the Sabrang
Trust (appellant in Criminal Appeal No.1085/2017), vide order
dated 9th September, 2015 the Competent Authority suspended its
authorisation. It is also relevant to note that FIR has been
registered by the Competent Authority of CBI in respect of violation
of Foreign Contribution (Regulation) Act, 1976. On 8th July, 2015
the appellants have been granted anticipatory bail in respect of the
said offence.
5. Be that as it may, the criminal revision applications preferred
by the appellants before the High Court of Gujarat, challenging the
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order dated 28th November, 2014 passed by the Magistrate rejecting
the prayer for lifting of the bank account freezing, were finally heard
and dismissed vide common judgment dated 6th/7th October, 2015.
This order is the subject matter of the present appeals. In other
words, the limited issue to be addressed in the present appeals is
about the justness of the action of the Investigating Officer of
freezing of stated bank accounts of the appellants in connection
with FIR registered as CR No.1/2014; and the correctness of the
approach of the Magistrate in rejecting the request for de-freezing
the bank accounts of the appellants as affirmed by the High Court
vide impugned judgment.
6. The genesis of the freezing of the bank accounts of the
appellants is the registration of the FIR bearing CR No.1/2014 on
4th January, 2014. The same reads as follows:
“First Information Report of Offence under police
Jurisdiction
(under Sec.154 of Cr.P.C)
1. Dist. Ahmedabad Po.St. D.C.P. Year-2014.
First Information no. I CR No.01/2014 Dt.4/1/2014.
2. Law
(1) IPC sec.406, 420, 120(B) and The I.T. Act. 72(A)
(2) ---
(3) ---
3. (A) Date of offence occurred and date:- year
from 2007 to till today.
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(B) Date declared of offence (Po.St.) :- 4/1/14
Time:-14:15
(C) Station diary entry no. 07/2014 Time : 14:15
4. How got information :- Oral or writing :- Writing.
5. Offence place :
(A) Distance of offence from po.st. and direction.
Beat no. / Chawky name…:-
(B) Address :- Gulberg Society, Meghani Nagar,
Ahmedabad and by the interest
(C) If the offence has occurred outside the police
station then name of that police station….:-
6. Complaint / Information :-
(A) Name : Firozkhan
(B) Name of Father : Saeed Khan Pathan
(C) Birth Date/Year : ………………
(D) Nationality : Indian
(E) Passport No………….. Dt. ……………
(F) Occupation : Business
(G) Address : 15, Shukan Residency, 2nd floor,
Opp. Sonal Cinema, Vejalpur Road, Ahmedabad City.
7. Name, Add and details of Accused :-
(1) Teesta Setalvad Resi. Nirant, Juhu Tara
Road, Mumbai
(2) Javed Anand (Husband) Resi. Nirant, Juhu
Tara Road, Mumbai
(3) Tanveer Jafri
(4) Chairman of G.B.Soc. Salim Sandhi.
(5) Secretary of G.B.Soc. Firoz Gulzar M.Pathan
and others who come out after inquiry.
8. Reason for late information :-
9. Narration of Property if lost or theft
10. Total price of theft
11. Accident (if death) death :- ……
12. Details of 1st Information :- ………
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The facts of this case are such that as mentioned on
above date, time and place, the accused named in
had conspired and exhibited the photographs and
video of Gulberg Society and other affected areas
and the accused had put up on the CJP and
Sabrang‟s websites with the help of internet against
the wishes of the complainant and on the website
appealed wealthy people to deposit donation in the
CJP‟s IDBI bank account as well as Union Bank of
India Account of Sabrang and thereby obtained
deposits of crores of rupees and used the money for
personal use by diverting in different institutions
with one/same address thereby indulging in wrong
activities in the name of religion and used Rs.
1,51,00,000/- for personal use between 2009 and
2011 thereby committed breach of trust & cheated
the victims by using internet.
13. Details of act done after registration of the
offence:-
Dtd. 04/01/2014
My name is Firozkhan Saeedkhan Pathan, Aged 41,
Business. Re.15, Shukun Residency, 2nd Floor, Opp.
Sonal Cinema, Vejalpur Road, Ahmedabad City (M)
9974240961.
On being asked personally, I am giving this
complaint that I am residing at the above mentioned
address with my family since 2004 and own a Relief
Cyber Café at Relief Road.
In the year 2002, I was residing in Bungalow No. 18,
at Gulbarg Society, Chamanpura, Omnagar Road at
Meghaninagar, with my family at the time of Godhra
Riots. This bungalow was in the name of my uncle
Anwarkhan Ahmedkhan Pathan. In this bungalow
the nominee was my aunt Jetunbibi Anwarkhan
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Pathan. But this massacre time my elder father
Anwarkhan Ahmedkhan Pathan was killed. Thus,
this bungalow is on the name of his wife Jetunbibi
Anwarkhan Pathan who was residing there. This
bungalow no. 18 was three storied. On the ground
floor in two rooms my elder uncle Anwarkhan
A.Pathan and his wife were lived. And other two
rooms my younger uncle Rashidkhan A.Pathan and
his wife Jamilabanu and my grandmother
Kherunnisha A. Pathan lived in it. On the Second
floor two rooms where my uncle Anwarkhan‟s son
Asiamkhan A.Pathan and his wife Suraiya and their
son Azar lived. And in other two rooms my elder
father Anwarkhan‟s younger son Akhtar Khan A.
Pathan and his wife Sajedabanu and their son
Sadab and daughter Farin resided. On the third
floor, I myself, my father and my mother Jehunnissa
and my younger brother Imtiyazkhan Saeedkhan
Pathan were residing. In the year 2002, after
Godhra incident, our Gulbarg Society too was burnt
by anti-social elements and 68 persons killed
including my grand mother Kherunnisha A. Pathan
Aged 80 and my uncle Anwarkhan A. Pathan Aged
70, my mother Johurannisha Saeedkhan Pathan
aged 57, my uncle‟s wife Jamilabanu Rashidkhan
Pathan aged 45 and my elder father Anwarkhan‟s
son Akhtarkhan A. Pathan and his wife Sahedabanu
Akhtarkhan and his son Sadabkhan A.Pathan. We
lived at Dariyakhan Ghummat, Shahibaug relief
camp for three months. At that time Raiskhan
Azizkhan Pathan and Teesta Setawad met us and
told that they run one NGO and had taken an
interview. They told that they would publish the
interview in their magazine namely Communalism
Combat and would help you economically and legally
and also assured of help whenever needed. I did not
know Raiskhan and Teesta Setalwad before this
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time. After that, we have taken a flat on rent at
Rakhial and live there for one year, and then, in the
year 2004, we lived in a flat which on rent, at
Juhapura for one and half year. And after that we
lived in Ambar tower flat No.28, taken on rent and
lived for one and half year there. After that in the
2007 lived in Firozalla, Nr. Vejalpur and then in the
2010, we shifted 15, Shukun Residency, 2nd floor,
Opp. Sonal Cinema, Vejalpur with my family. After
Godhra Riots, we organized programme for paying
our tribute to our departed souls at Gulbarg Society
on the 28th Feb every year and read Quran there. At
this time, one NGO CJP‟s Ms. Setalvad arrived from
Mumbai assured support in the Gulberg Society‟s
case. This Teesta Setalvad helped us till the trial
went on. She helped us only for the trial case and
not economically.
Then in the year 2007, Teesta Setalvad‟s man one
Raiskhan A. Pathan, resident of Mumbai and at
present residing in Ajit mill compound, Ajit Residency
flat, at Rakhial. They told us that we lived in a
rental house and are tired of paying rent since 2002.
So, went to sell Gulbarg Society, then Raiskhan told
us that he has to talk with her and then reply us.
After some time we the members of society were
went at M.M. Tirmizi‟s office which is at Mirzapur
and arranged a meeting there. In this meeting,
Gulbarg Society members, Raiskhan Pathan, Teesta
Setalwad and M.M. Tirmizi were present. When
Raiskhan told Teesta Setalvad that the members of
the Gulbarg Society wanted to sell their houses, she
got angry at Raiskhan and told us that we all should
not indulge in selling the society and informed that
she would handle it in her own way and asked
Raiskhan to leave the office. Thereafter Ms. Setalvad
organised a meeting of the members of the society
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and informed chairman, secretary to make a survey
of Then a matting held the members of the society
and told that chairman and secretary surveyed the
society and expressed her wish to make a museum
at this place. I will pay you the value of your houses
within a month.
After this, in 2008, on 28.2.208, when all of us
members and residents of the Gulberg Society
gathered there to commemorate the dead, Teesta
Setalvad had also visited and held a meeting. At this
meeting affected persons following Godhra from
Naroda Gaam, Queishi Yunusmiya and Odh village‟s
Anwarmiyan and Saeed Radeeq Ahmed and Hasan
Khan Pathan and Yusuf Vora and Jaffer Khan
Pathan as also affected persons from Nroda Patiya,
Sardarpura, Visnagar (Deepda Darwaza), and
Pandharwada were also present at the meeting.
Every year since 2007 Teesta Setalvad held
meetings calling affected persons and media persons
and made CDs of the opinions of affected persons
and their plight and talked of making a museum
there. At this meeting, son of former MP Ahsan Jafri,
Tanvir Jafri was also there and spoke of putting a
statute of his father Ahsan Jafri and building a
Museum there.
Then on 28.2.2009, a meeting of the members and
residents of Gulberg society and other victims from
all over Gujarat and the media and other important
people was held when all members of the society
had told her that you had said in the 2007 meeting
that within a month we would be paid. Until now no
money has been paid. Hence pay us the money, we
said. She said that we are collecting funds and as
soon as funds are collected we will be paid, we were
informed. Then, in the years 2010 and 2011 again,
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on 28.2.2002, she organized functions when also
members had asked questions, but she had made
excused and not given the money.
On 28.2.2012, this Teesta Setalvad organised a
larger, well planed programme at Gulberg Society
where the affected persons of riots, media‟s persons
and Muslim leaders had gathered. At that time, all
over Gulberg society, photos of dead persons on a
Projector were shown. Banners displayed showed as
if the Museum had been created. A large stage was
made a Shobha Mudgal, a famous classical artist
was called and a programme was held. Members of
our society had opposed this and said that since you
had not given any monies to the members and falsely
projected that you had made a museum and collected
donations, since then, strong opposition between
society members and Teesta Setalvad began. Hence
Teesta Setalvad took Tanvir Jafri, and the Chairman
and the Secretary into her confidence and in a
confidential meeting resolved that any persons who
are members of the society could sell sale their
houses to any persons of their choice regardless of
caste or religion at the price of your choosing. Now
none of the built homes will be used by us for the
Museum. The resolution that was passed by which
other society members had opposed it. In our
opposition we had said that for 12 years since the
incident took place, and since 2007, you had on the
excuse of a Museum being built amassed crores of
rupees and this fund you did not use for the Society
or for riot victims, you have not paid any monies. You
have breached our trust and cheated us. Along with
this Teesta Setalvad and resident of Surat, Tanveer
Ahsan Hussain Jafri together, from 2007 to 2012
conducted programmes, made CDs and sent to her
sister, Nargis Jafri and his younger brother Zuber
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who lived in USA via email and through hard copies.
There, they organised seminars, showed CD‟s and
wrongfully collected funds and collected crores of
rupees for this. At these seminars, now and then,
Teesta Setalvad, Tanveer Jafri, as also their persons,
Father Cedric Prakash and R.B. Shree Kumar (Retd.
D.G.P.) had visited America.
This Teesta Setalvad and Tanveer Jafri and other
persons jointly planned a conspiracy of gathering
photos etc of affected persons of Gulberg Society and
other affected locations and displayed these on the
CJP and Sabrang website and on internet against
our desires.
Then the bank account numbers of the CJP. Institute
Bank A/c. in IDBI No.014104000204736 and the
Sabrang Bank Account @ Union Bank of India
No.369102010802885 were displayed on the
internet and appeals for the fund and crores of
rupees were collected in the bank accounts. This
fund was fraudulently used for their personal
expenses through the creation of different
organisations at the same address.
We got this information under an RTI application:-
that the CJP NGO had, from 2009 to 2011 had
collected Rs.63 (sixty-three) lakhs and the Sabrang
Trust had collected Rs.88 (eighty-eight) lakhs from
local and foreign countries. The members of these
trusts not amassed these funds through
misrepresentation but also used these funds for
personal reasons. These funds were not used for the
benefit of the members of Gulberg Society. Apart from
this also, crores of rupees have also been amassed
by them and used for personal reasons and
committed a breach of trust and cheating with
affected persons.
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Therefore, a complaint against Teesta Setalvad, her
husband Javed Anand, who both live at „Nirant‟
bungalow, Juhu Tara Road, Mumbai and Tanveer
Jafri, and Chairman of Gulberg Society, Salimbhai
Sandhi and Secretary Firoz Gulzar Mohammed
Pathan and others who may be involved after
investigations, this is my complaint for a detailed
and lawful investigation. The persons unknown are
named as etc. This complaint is true as per my
knowledge which has been read and understood by
me and thereafter signed. I have received a copy of
my complaint.
Sd(C.B.Gamit)
(P.S.I. Crime)
(S.O.G. Crime)
Ahmedabad City.
Sd- Asst.-
Adl. Chief Metro Magistrate Court-11 A‟bad.”
7. Simultaneously, with the registration of the aforementioned
FIR, the Assistant Commissioner of Police, Cyber Cell, Crime
Branch, Ahmedabad issued instructions to the Union Bank of
India, Juhu Tara Branch, Mumbai and IDBI, Khar Branch, Mumbai
to seize the stated bank accounts pertaining to Sabrang Trust, CJP
Trust, Teesta Atul Setalvad and Javad Anand, appellants herein.
Intimation about the seizure of concerned bank accounts was given
to the concerned Magistrate on 21st January, 2014. On the
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applications for de-freezing of the concerned bank account filed
before the Metropolitan Magistrate Court No. XI, Ahmedabad, it was
mainly contended that - the Investigating Officer had failed to
comply with the mandate of Section 102 of Cr.P.C., by not
informing the Magistrate of the action of freezing of the accounts;
the Investigating Officer has not given prior notice to the account
holders before freezing of their bank accounts; the appellant CJP
Trust, in any case, is not named as accused in the alleged crime
and is not associated with the same in any manner; the concerned
Trust maintains proper accounts which are duly audited and there
is no trace of any illegality committed in respect of receipt and
expenditure; the contributions made by foreign fund is after due
approval of the Competent Authority; the attempt of freezing of the
bank accounts of the Trust and also personal accounts of the
Trustees, in particular private appellants, was motivated and an
attempt to stifle them from carrying on their social welfare
activities; the bank accounts had no causal connection with the
commission of alleged offence in respect of which investigation was
in progress and more so, not even one donor has come forward to
question the intention or activity of the concerned Trust. These
contentions have been duly considered by the Magistrate whilst
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rejecting the application submitted by the appellants for de-freezing
the accounts. The Magistrate took the view that the private
applicants were the Trustees of the Trusts whose bank accounts
have been seized and preliminary investigation revealed substantial
discrepancies in the accounts, including that the accounts of the
Trusts were not audited for the relevant period and the transactions
and huge withdrawals from the bank accounts raised suspicion
regarding the commission of the alleged offence. It is further held
that since the investigation was at the nascent stage and was in
progress and the private appellants were seemingly not cooperating
with the investigation, the prayer for lifting of seizure of the bank
accounts cannot be acceded to. Accordingly, the applications came
to be rejected vide a common order dated 28th November, 2014 by
the Additional Chief Metropolitan Magistrate Court No.XI,
Ahmedabad.
8. Before the High Court, more or less similar arguments were
canvassed on behalf of the appellants. The High Court in paragraph
15 of the impugned judgment adverted to the gist of contentions
recorded by the Magistrate as under:
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“15. The questions which raised in the Lower Court,
as submitted by the learned counsel for the
petitioners, were (A) That seizer of accounts was
illegal in absence of prior notice, (B) The action of
freezing of accounts in absence required intimation
to the Magistrate concerned was illegal, (C) The
accounts could not have been freezed for all times to
come and the object of the investigation could have
been achieved by requiring the petitioners to execute
a bond to compensate the State, if at all the case
against the petitioners was made out, (D) Freezing of
accounts could have been resorted only as a sequel
to crime and not for the purpose of discovery of crime,
(E) The accounts had nothing to do with proceeds of
crime and therefore continued seizure was
unnecessary. (F) That accounts were Foreign
Contribution Regularization Accounts (FCRA) under
the authorization of the Home Ministry, and
therefore, local police had no authority to freeze
them.”
9. The High Court then adverted to the arguments of the
appellants as advanced, in paragraphs 16 to 24. The first point was
about the absence of prior notice to the appellants before the
freezing of the bank accounts, which has been rejected following the
Bombay High Court Full Bench decision in the case of Vinoskumar
Ramachandran Valluvar V. The State of Maharashtra1. The
High Court then noted the contention of the appellants that the
Audit Reports of the accounts concerned were submitted to various
authorities, like Charity Commissioner, Home Ministry etc., who
1 (2011) Cri.L.J. 2522 (Bom.)
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neither raised any objection nor found any irregularity in the
accounts. Further, different contributories including Human
Resources Development Ministry, have contributed to the corpus of
the Trust and none of the contributors or donors have ever raised
any objection about the activities of the appellants. The High Court
also noted that even United Nations Organization was one of the
donors. For obtaining donations from the said organizations, strict
procedure and formalities are required to be complied with and
have been so complied with and only thereafter the donation
amount has been released. The concerned authorities did not find
any irregularities in the transactions in question. It was then
contended that freezing of accounts cannot be for indefinite period.
The appellants can be allowed to operate the accounts upon
execution of a bond and that would subserve the interest of justice.
The appellants also contended that the accounts were re-audited by
the Chartered Accountants and no irregularity or illegality has been
found during the said re-audit. In case there is any illegality or
irregularity, the same can be deciphered by examining the entries in
the books of accounts and the vouchers in the relevant documents
which are already furnished to the Investigating Agency. It was
contended that freezing of the accounts of the Trust, in particular,
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operated for receiving donations under the FCRA, was motivated
and to completely paralyse the working of the
Trust. It was contended that there can be no presumption that the
use of the funds from the accounts in question was not for private
purpose. It was also contended that the appellants and their
chartered accountants and auditors were extending full cooperation
with the investigation. The principal argument of the appellants was
that the power under Section 102 of Cr.P.C. could not have been
exercised as no material was produced by the investigating
authority to support the fact that the property in question was
parted with to indicate the commission of alleged offence of cheating
or breach of trust or for that matter forgery of the record. These
contentions were countered by the respondents. The High Court
then considered the relevant material placed on record and the
affidavits filed by the investigating authority highlighting the
suspicious transactions done from the stated bank accounts and
the conduct of the appellants, including the incorrect statements
made by the appellants on oath in the proceedings before the Court
regarding the maintenance of the accounts of the two Trusts. The
High Court also adverted to the decision of the coordinate Bench
while rejecting the anticipatory bail application preferred by the
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appellants and inference drawn in support of the conclusion as to
why the prayer for anticipatory bail should be rejected. The same
has been extracted in paragraphs 37 and 38 of the impugned
judgment, which read thus:
“37. From the aforestated facts this Court drew
following inference thus:
„Thus, from the above, it is evident that the accounts
were also not audited for a long period of time, and it
is only when the FIR was registered wherein serious
allegations of misappropriation of lacs of rupees have
been alleged that all of a sudden the accounts from
April, 2003 to March, 2008 were got audited in the
year 2014.
38. On the basis of the facts available on record as
aforestated, this Court assigned the reasons as to
why custodial investigation was necessary; they
were as under:
(a) From the accounts of the Sabrang Trust and CJP,
a total amount of Rs.1,69,84,669=00 have been
transferred to the Sabrang Communication &
Publishing Pvt Ltd, a company owned by the
petitioners.
(b) From the accounts of the Sabrang Trust and of
CJP, an amount of Rs.46,91,250=00 and
Rs.28,34,804=00 were transferred to the personal
accounts of the petitioner nos. 1 & 2 respectively.
(c) From the accounts of the Sabrang Trust and CJP,
the petitioners have withdrawn Rs.1,08,73,782=00
as cash.
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(d) From the accounts of the Sabrang Trust and CJP,
the petitioners have paid Rs.29,66,121=00 towards
Credit Card payments.
(e) The petitioners have endeavored to explain the
credit card payment running into lakhs of rupees by
stating that all such personal expenditure were
repaid to the NGO Page 40 of 48 HC-NIC Page 40 of
48 Created On Fri May 06 16:33:26 IST 2016
R/CR.RA/249/2015 JUDGMENT accounts. This
employment of public donations to personal use
needs to be investigated. The petitioners have not
submitted any debit/ credit vouchers and/or cheques
details to prove their statement.
(f) Upon scrutiny of the saving accounts
Nos.014104000142595 & 014104000142601 of the
petitioner nos. 1 & 2 with the IDBI, Mumbai, it was
noticed that both the accounts were opened on
30.04.2005. The FCRA permission from MHA for CJP
and Sabrang Trust was granted in November, 2007.
Proposal to purchase the Gulbarg Society was
mooted by petitioner no.1 orally in December, 2007
and formally in January, 2008, Resolution was
passed by the society accepting her proposal in June,
2008 and thereafter the advertisements commenced
and monies started pouring in. Further no
substantial income of any nature, except from the
CJP and Sabrang Trust, is noticed in both the above
mentioned personal accounts of the petitioners,
which were further invested in fixed deposits, shares
and mutual funds such as ICICI Prudential, Reliance
Capital, Kotak Mahindra, Franklin Templeton etc.
(g) The donations received by the Sabrang Trust and
CJP are utilized for personal purposes.
(h) Receipt of donations to the tune of
Rs.29,20,000=00 from Ashoka Foundation, Arlington,
USA, in the personal accounts of Ms. Setalvad and
Rs.6,05,442=00 as foreign remittance in Ms.
Setalvads personal account.
22
(i) Monthly withdrawal of salary by both the accused
from all the six accounts of CJP, Sabrang Trust and
Sabrang Communications.
It also appears that the custodial interrogation is
necessary for the following reasons :
1. The case of the prosecution is based on cogent
documentary evidence received from the Charity
Commissioner, Mumbai, Ministry of Home Affairs,
New Delhi, various Banks, etc. Financial details
received from these authorities require detailed
investigation.
2. The petitioners have never remained present
before any investigating agency and have employed
every means to avoid the due process of law. The
petitioners seek to avoid custodial interrogation by
the investigating authorities by dismissing cogent
documentary evidence as accounting jugglery.
Approximately 44% of the total donations received in
the Sabrang Trust and approximately 35% of the
total donations received in the CJP, were transferred
to their personal accounts.
3. Cash withdrawal running into over Rs 1.09 crore
need to be further scrutinized and examined wherein
Rs.50,000=00 to Rs.5,00,000=00 have been
withdrawn as cash on a single day.
4. Credit card details received from the UBI and Citi
Bank revealed expenditure of purely personal nature
running into lacs of rupees being serviced from the
CJP and Sabrang Trust accounts through
cheques signed by the petitioners.”
23
10. After having noticed the relevant material, the High Court
proceeded to consider the contentions germane for answering the
issue regarding de-freezing of the bank accounts and answered in
the following words:
“39. This Court is conscious of the fact that question
of custodial investigation is not under consideration.
The endeavour of the Court is to point out material in
possession of the investigating agency in relation to
the accounts in question and the conduct of the
petitioners. It is required to be noted that the
affidavit-in-reply, in the same terms as in the
aforestated bail applications, has been filed by the
State in these petitions also. From the aforestated
facts, it cannot be disputed that the investigating
agency has in its possession a considerable
material entitling it to freeze the accounts of the
petitioners under Section 102 of Cr.P.C. The power
to seize the tainted property or the property which is
doubted as tainted, on the basis of substantial
material under Section 102 of Cr.P.C. is not in
dispute. It is also settled legal position that the
investigating agency, while investigating the matter,
is the master of its case; the Courts would be loath to
interfere in the investigation in absence of serious
irregularity or illegality aimed at mala fide impairing
the right of the accused rather than serving public
interest. It may be true that the action of the
investigating agency at the inception may not be
regular, but the Court cannot be oblivious to the
collection of substantial material by the investigating
agency justifying the action under Section 102 of
Cr.P.C. Therefore, it is insignificant at this stage,
when the investigation has progressed to a
material point, to ponder around the question as
to whether the act of freezing the accounts was a
sequel to crime or the crime was detected later. If
24
the arguments to that effect advanced by the
learned counsel for the petitioners is accepted at
this stage, it would advance the public injustice
rather than serving the ends of justice. De-freezing
accounts on the basis of such arguments, may
paralyze the investigation, which cannot be
approved as an act ‘in the interest of justice.’
40. Having found the aforestated serious material
against the petitioners, it cannot be said that the
execution of the bond by the petitioners is a suitable
alternative. Securing the public interest rather than
money is the central point of consideration when
theft or manipulation of accounts meant for the
beneficiaries, is alleged. It is rightly contended by the
learned Public Prosecutor that when the
investigating agency is wanting to ascertain the
extent of the tainted accounts, and when on the basis
of material, the whole corpus of the accounts is under
the cloud of doubt, at this stage, mere execution of
bond is not going to serve the purpose of law.
41. The learned counsel for the petitioners submitted
in the affidavit-in-rejoinder in Para 5.2, that the
petitioners have controverted the facts as regards
non-auditing of accounts by the petitioners for a
continuous period of six years or so as alleged by the
State with appropriate material. That is not the only
question on which the investigation is based as
indicated in detail. Irrespective of the accounts
being audited or not, serious discrepancies have
been noticed by the Court in the audited accounts
submitted to the Charity Commissioner and in the
bank statements etc. It is apparent from the
affidavit-in-reply filed by the State that they have
noticed and compared various entries in the
audited accounts with the statements of the bank
accounts. Further, this is not a stage where the
Court will appreciate the case as if in a trial. The
question is whether there is a material with the
investigating agency justifying freezing of accounts
under Section 102. The purpose of Section 102
obviously is to find out the truth after noticing the
25
material raising doubt about the commission of
offence. At this stage, it is not incumbent upon the
investigating agency to justify the material as if in a
trial and it would be suffice for it to justify the
material for the purpose of investigation. If justifiable
material for investigation is available, the Court
would not sit in appeal over such justification, as
investigation is in the absolute domain of the
investigating agency, and as pointed out earlier,
the Court may interfere only in exception
circumstances.
42. As indicated above, prima facie the entire
accounts are in serious clouds of doubt, and
therefore, freezing thereof could be the only remedy
with the investigating agency. The law must be
allowed to take its own course, even at the cost of
causing inconvenience to the accused or others, and
therefore, the petitioners cannot be heard to
complain that the consequence of legal action has
translated into paralyzing its activities.
43. It is also rightly contended by the learned
Public Prosecutor that arguments of the learned
counsel for the petitioners justifying the
transactions or offering justification as to certain
entries are more in the nature of defence than valid
arguments at this stage. Such facts are required to
be considered at this stage by the investigating
agency on cooperation of the petitioners, and later,
in the trial, if at all the case is found against the
petitioners by the investigating agency for trial, and if
the cognizance of the offence as alleged is taken by
the competent Court. Therefore, arguments that the
trusts are registered under the FCRA 1976, and that
it has various reputed contributors or the donors
including the Human Resources Development
Ministry or that the trusts have avowed objects of
brining about the communal harmony and helping
the victim and providing legal aid to them must fail.
26
44. The arguments impugning the freezing of the
accounts under Section 102 of Cr.P.C. without notice
to the petitioners are to be noted for rejection for the
simple reason that the Section 102 does not
contemplate issuance of any such notice, and for the
purpose of investigation, no notice to the suspect can
be expected under the law. Section 102 of Cr.P.C. is
an important step towards investigation and in view
of settled legal position that accused cannot have
any say in investigation, notice to the suspect is out
of question. The intention of the investigating agency
is not required to be revealed to the suspect at that
crucial stage, else, a message of alert would be
received by the suspect creating a huge room for
manipulation and or destruction of evidence.
45. It is noticed from the impugned order that the
notice of the seizure or freezing of the accounts or its
intimation was sent to the competent magistrate, and
therefore, learned counsel for the petitioners has
fairly not pressed the said argument.
46. It is also misconceived to argue that the seizure
in exercise of powers under Section 102 of Cr.P.C.
would be valid only if the accounts in question
contain the proceeds of crime.
47. There appears to be no substance in the
argument that it is only Human Resources
Development Ministry which can exercise power of
freezing or seizing of the account. There is nothing in
the language of any of the provisions of FCRA 1976
to infer any fetters on the powers of the police to
investigate even those accounts in which the
authorization to obtain the donation even from a
foreign national is granted under the FCRA Act. No
fetters, therefore can be read in the powers of
investigating agency investigating the case under the
Cr.P.C.
27
48. True it is that the learned Government Public
Prosecutor rightly concedes against perennial
freezing of accounts; however, it is for the
investigating agency, probably on conclusion of the
investigation to determine the extent of the
accounts tainted with crime and to De-freeze the
rest, if at all such Defreezing is warranted in the
facts and circumstances of the case. This issue can
be answered from another angle as contended by the
learned Public Prosecutor. If upon conclusion of the
investigation, a part of accounts is found to be
tainted, obviously it would amount to stolen property
within the meaning of Section 410 of IPC, and in such
an eventuality, by no stretch of imagination, a stolen
property can be released before trial or acquittal of
accused.
49. The argument as to applicability of the penal
provisions invoked against the petitioners cannot be
gone into at this stage when the investigation is at
crucial point and the material in this regard is yet to
be placed before the Court after conclusion of the
investigation. In fact, in view of the settled legal
position that accused has no role to play in the
investigation except as indicated in Cr.P.C., the
question as to applicability of a particular provision is
required to be left to the discretion of the
investigating agency and then to the Court as and
when and if the report under Section 173 of Cr.P.C. is
filed.”
11. In the present appeals, the appellants have largely reiterated
the stand taken in the proceedings before the Magistrate and the
High Court, wherefrom the present appeals have arisen. The
appellants contend that to justify the freezing of the bank accounts
the investigating authority must demonstrate that the monies held
28
in these accounts are connected with the commission of the offence.
The investigation of the alleged offence has been a roving one and
the police has investigated the entire accounts of the appellants
even beyond the period referred to in the FIR. Further, the seized
accounts have nothing to do with the subject matter of the FIR. CJP
Trust has no concern with the appeal made by the Sabrang Trust
on its website. The donations were invited by Sabrang Trust to be
deposited in its account displayed on the website. Notably, the
grants/donations made by the donors for executing specific projects
and the amounts were and still are supposed to be spent in
accordance with the agreements. The donors are private parties and
none of them has complained about the embezzlement of their
funds. The donors have been furnished with relevant information
and accounts concerning their donations. In the written
submissions filed by the appellants it is submitted that the
provisions of law sought to be invoked against the appellants and
the transactions in question must necessarily result in commission
of some offence by the appellants so as to invoke Section 102 of the
Code; whereas keeping in mind the ingredients of Sections 405 &
406, there is nothing to indicate that the said offence is made out
against the appellants. Only that private person who has
29
contributed can be heard to make grievance about entrustment and
criminal breach of trust. Not even one donor has come forward to
make such grievance. Similarly, the ingredients of offence of
cheating specified in Section 415 to be an offence under Section
420, required dishonest or fraudulent inducement of any person to
deliver any property to the accused. None of the donors have come
forward to make grievance in that behalf. It is submitted that it is
well settled that if the property is not suspected of commission of
offence, it cannot be seized under Section 102 of the Code. For, the
police officer can seize only such property which may be alleged or
suspected to have been alleged in the commission of offence.
Reliance has been placed on M.T. Enrica Lexie and Anr. v.
Doramma and Ors.2 and Sri Jayendra Saraswathy Swamigal
(II), T.N. v. State of T.N. and Ors.3 to contend that in the absence
of due procedure as specified by Section 102 of the Code, seizure of
bank accounts would be illegal and more so, when it has been done
to stifle all the activities of the Trust. The counsel for the appellants,
during the course of argument, had invited our attention to various
documents and also explained the entries relied upon by the
respondents, which according to the appellants was a tenuous plea
2 (2012) 6 SCC 760
3 (2005) 8 SCC 771
30
to link the stated bank accounts with the crime under
investigation. Details have been given in the written submission as
to how the entries in the books of accounts have been distorted and
misread by the respondents.
12. The respondents, on the other hand, submit that the
investigation is still in progress and the appellants have not given
full cooperation to the Investigating Officer. Rather, the appellants
have caused hurdles in the smooth progress of the investigation of
the alleged crime. The record would reveal that proper procedure for
seizure of the bank accounts was followed and that considering the
nature of allegations in the FIR and the material gathered during
the investigation thus far, would require elaborate investigation
with regard to the subject matter of the FIR. The High Court had
elaborately analysed the material on record while considering the
prayer for grant of anticipatory bail of the private appellants and
prima facie found substance in the allegations against the
appellants of misuse of funds received by them through various
donors and that the appellants were not ready and willing to
cooperate with the investigation. The respondents would submit
that since the investigation is in progress and the material already
gathered throws up circumstances which create suspicion of the
31
commission of the alleged offence, therefore it is imperative to
continue the seizure of bank accounts until it is necessary and till
the completion of the investigation. If the Investigating Officer
eventually finds that the accounts are not tainted with the crime, he
would not hesitate to defreeze the same or to exclude the untainted
amounts.
13. We have heard Mr. Kapil Sibal, learned senior counsel along
with Ms. Aparna Bhat, appearing for the appellants and Mr. Tushar
Mehta, learned Additional Solicitor General along with Mr. Ajay
Chokshi, appearing for the State of Gujarat.
14. The sweep and applicability of Section 102 of the Code is no
more res integra. That question has been directly considered and
answered in the case of State of Maharashtra v. Tapas D.
Neogy.
4 The Court examined the question whether the police officer
investigating any offence can issue prohibitory orders in respect of
bank accounts in exercise of power under Section 102 of the Code.
The High Court, in that case, after analysing the provisions of
Section 102 of the Code had opined that bank account of the
accused or of any relation of the accused cannot be held to be
4 (1999) 7 SCC 685
32
“property” within the meaning of Section 102 of the Code.
Therefore, the Investigating Officer will have no power to seize bank
accounts or to issue any prohibitory order prohibiting the operation
of the bank account. This Court noted that there were conflicting
decisions of different High Courts on this aspect and as the
question was seminal, it chose to answer the same. In paragraph 6,
this Court noted thus:
“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. In this view of the matter
the two further questions that arise for consideration
are whether the bank account of an accused or of his
relation can be said to be „property‟ within the
meaning of sub-section (1) of Section 102 of the
Cr.P.C. and secondly, whether circumstances exist,
creating suspicion of commission of any offence in
relation to the same………..”
15. After analysing the decisions of different High Courts, this
Court in paragraph 12, expounded the legal position thus:
33
“Having considered the divergent views taken by
different High Courts with regard to the power of
seizure under Section 102 of the Code of Criminal
Procedure, and whether the bank account can be
held to be „property‟ within the meaning of the said
Section 102(1), we see no justification to give any
narrow interpretation to the provisions of the
Criminal Procedure Code. It is well known that
corruption in public offices has become so rampant
that it has become difficult to cope up with the same.
Then again the time consumed by the Courts in
concluding the trials is another factor which should
be borne in mind in interpreting the provisions of
Section 102 of the Criminal Procedure Code and the
underlying object engrafted therein, inasmuch as if
there can be no order of seizure of the bank account
of the accused then the entire money deposited in a
bank which is ultimately held in the trial to be the
outcome of the illegal gratification, could be
withdrawn by the accused and the Courts would be
powerless to get the said money which has any
direct link with the commission of the offence
committed by the accused as a public officer. We
are, therefore, persuaded to take the view that the
bank account of the accused or any of his relations
is „property‟ within the meaning of Section 102 of the
Criminal Procedure Code and a police officer in
course of investigation can seize or prohibit the
operation of the said account if such assets have
direct links with the commission of the offence for
which the police officer is investigating into.
xxx xxx xxx xxx xxx
In the aforesaid premises, we have no hesitation to
come to the conclusion that the High Court of
Bombay committed error in holding that the police
officer could not have seized the bank account or
could not have issued any direction to the bank
officer, prohibiting the account of the accused from
being operated upon.”
34
16. After this decision, there is no room to countenance the
challenge to the action of seizure of bank account of any person
which may be found under circumstances creating suspicion of the
commission of any offence.
17. In the present case, FIR has been registered at least against
three private appellants, naming them as accused. CJP Trust has
not been named as an accused in the FIR. But the investigation
thus far, according to the respondents, reveals that Teesta Atul
Setalvad and Javed Anand are actively associated with the said
Trusts and have carried out transactions which may be found
under circumstances suspicious of the commission of the alleged
offence. That is still a matter of investigation. For the present, the
Investigating Officer is of the view that there are certain
circumstances emerging from the transactions done from these
bank accounts which create suspicion of the commission of an
offence. It is on that belief he has exercised his discretion to issue
directions to seize the bank accounts pertaining to CJP Trust.
18. As regards the procedure for issuing instructions to freeze the
bank accounts, it is noticed that the same has been followed by
giving intimation to the concerned Magistrate on 21st November,
35
2014 as required in terms of Section 102 of the Code. There is
nothing in Section 102 which mandates giving of prior notice to the
account holder before the seizure of his bank account. The
Magistrate after noticing that the principle stated by the Division
Bench of the Bombay High Court in the case of Dr. Shashikant D.
Karnik v. State of Maharashtra5 has been overruled in terms of
the Full Bench Judgment of the Bombay High Court in the case of
Vinoskumar Ramachandran Valluvar (supra), rightly negatived
that contention. The Full Bench of the Bombay High Court has
expounded that Section 102 does not require issuance of notice to a
person before or simultaneously with the action attaching his bank
account. In the case of Adarsh Co-operative Housing Society
Limited v. Union of India & Ors.6, the Division Bench of the
Bombay High Court once again considered the issue and rejected
the argument that prior notice to the account holder was required
to be given before seizure of his bank account. It also noted that the
bank account need not be only of the accused but it can be any
account creating suspicion about the commission of an offence. The
view so taken commends us.
5 (2008) Cri.L.J. 148 (Bom.)
6 (2012) Cri.L.J. 520 (Bom.)
36
19. In the case of Sri Jayendra Saraswathy Swamigal (supra),
the Court while considering a transfer petition under Section 406 of
the Code, seeking transfer of the case pending before the Principal
Sessions Court, Chenglepet, to any other State outside the State of
Tamil Nadu, adverted to the circumstance of a motivated order
passed under Section 102 of the Code for freezing of 183 bank
accounts of the Mutt on the ground that the head of the Mutt was
involved in a murder case. In that context, it observed that the
power vested under Section 102 of the Code cannot be stretched to
irrelevant matters, to extremes and to a breaking point. The power
must be exercised cautiously, failing which, the discretion exercised
by the authority would be tainted with arbitrariness. In paragraph
23, the Court observed thus:
“…Again, the action of the State in directing the
banks to freeze all the 183 accounts of the Mutt in
the purported exercise of the power conferred under
Section 102 CrPC, which had affected the entire
activities of the Mutt and other associated trusts and
endowments only on the ground that the petitioner,
who is the head of the Mutt, has been chargesheeted
for entering into a conspiracy to murder
Sankararaman, leads to an inference that the State
machinery is not only interested in securing
conviction of the petitioner and the other co-accused
but also to bring to a complete halt the entire
religious and other activities of the various trusts
and endowments and the performance of pooja and
other rituals in the temples and religious places in
37
accordance with the custom and traditions and
thereby create a fear psychosis in the minds of the
people. This may deter anyone from appearing in
Court and give evidence in defence of the
accused……..”
The Court did not lay down as a proposition that it is impermissible
to freeze multiple bank accounts, even though circumstances
emanating from the nature of transactions effected from the
concerned bank accounts and the conduct of the account holders
created suspicion of the commission of an offence. The Court while
directing lifting of seizure of bank accounts had noted that the Mutt
could not be paralysed by freezing of all its bank accounts in the
guise of a direction issued under Section 102 of the Code. Further,
the continuation of the seizure of all the bank accounts even after
completion of the investigation of the case and filing of charge-sheet
was unwarranted.
20. In the case of M.T. Enrica Lexie (supra), the Court noted in
paragraph 7 that agencies had completed their respective
investigations and vessel was seized in exercise of power under
Section 102 of the Code. In Para 16, the Court noted the
concession given by the counsel for the Government that the vessel
was not the object of the crime or the circumstances which came up
38
in the course of investigation that create suspicion of the
commission of any offence. In that case, it was alleged that while
the fishing boat was sailing through the Arabian Sea, indiscriminate
firing was opened from the vessel in question, as a result of which
two innocent fishermen who were on board, died. The Counsel for
the State had also conceded that the vessel was no longer required
in connection with the offence in question. Indeed, in paragraph
14, the Court made the following observations:-
“14. The police officer in course of investigation can
seize any property under Section 102 if such property
is alleged to be stolen or is suspected to be stolen or
is the object of the crime under investigation or has
direct link with the commission of offence for which
the police officer is investigating into. A property not
suspected of commission of the offence which is
being investigated into by the police officer cannot be
seized. Under Section 102 of the Code, the police
officer can seize such property which is covered by
Section 102(1) and no other.”
These observations are in no way different from the proposition
expounded in the case of Tapas D. Neogy (supra).
21. Keeping these principles in mind and the material on record, it
is noticed that the prosecution has alleged that the two Trusts are
run by the private appellants and other accused. They were actively
involved in collecting huge funds as donation in the name of
39
providing legal assistance to the 2002 Gujarat Riot Victims. Such
donations received by the two Trusts had never reached the victims,
the members of the Gulberg Society in respect of which grievance
has been made in the subject FIR. Further, substantial
discrepancies have been noticed from the bank accounts, copies of
audited account statements and Balance Sheet. The final account
did not tally with the accounts, as submitted. The appellants did
not offer credible explanation in that regard, much less
satisfactory. According to the respondents, the conduct of the
appellants of non-cooperation during the investigation strengthens
the suspicion of the commission of an offence. They provided
incorrect information. It is also a case of non-disclosure and
suppression of material facts. These circumstances create suspicion
of the commission of offence under investigation. It is alleged by
the respondents that the appellants deliberately and intentionally
did not disclose that they have already opened new accounts and
transferred huge sums of money after knowing that stated bank
accounts of the appellants were seized on 21.01.2014 by the
investigating agency. The details of the two newly opened accounts
were not forthcoming. Further, in the proceedings filed before
different Courts, incorrect plea has been taken by the appellants,
40
suggestive of the fact that their accounts were not compliant and
duly scrutinized by the Competent Authority.
22. Suffice it to observe that as the Investigating Officer was in
possession of materials pointing out circumstances which create
suspicion of the commission of an offence, in particular, the one
under investigation and he having exercised powers under Section
102 of the Code, which he could, in law, therefore, could
legitimately seize the bank accounts of the appellants after following
the procedure prescribed in sub-Section (2) and sub-Section (3) of
the same provision. As aforementioned, the Investigating Officer
after issuing instructions to seize the stated bank accounts of the
appellants submitted report to the Magistrate concerned and thus
complied with the requirement of sub-Section (3).
23. Although both sides have adverted to statement of accounts
and vouchers to buttress their respective submissions, we do not
deem it necessary nor think it appropriate to analyse the same
while considering the matter on hand which emanates from an
application preferred by the appellants to de-freeze the stated bank
accounts pending investigation of the case. Indisputably, the
investigation is still in progress. The appellants will have to explain
41
their position to the investigating agency and after investigation is
complete, the matter can proceed further depending on the material
gathered during the investigation. The suspicion entertained by the
investigating agency as to how the appellants appropriated huge
funds, which in fact were meant to be disbursed to the unfortunate
victims of 2002 riots will have to be explained by the appellants.
Further, once the investigation is complete and police report is
submitted to the concerned Court, it would be open to the
appellants to apply for de-freezing of the bank accounts and
persuade the concerned Court that the said bank accounts are no
more necessary for the purpose of investigation, as provided in subSection
(3) of Section 102 of the Code. It will be open to the
concerned Court to consider that request in accordance with law
after hearing the investigating agency, including to impose
conditions as may be warranted in the fact situation of the case.
24. In our opinion, such a course would meet the ends of justice.
We say so also because the explanation offered by the appellants in
respect of the discrepancies in the accounts, pointed out by the
respondents, will be a matter of defence of the appellants.
42
25. We clarify that at an appropriate stage or upon completion of
the investigation, if the Investigating Officer is satisfied with the
explanation offered by the appellants and is of the opinion that
continuance of the seizure of the stated bank accounts or any one
of them is not necessary, he will be well advised to issue instruction
in that behalf.
26. Accordingly, these appeals are dismissed.
…………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
New Delhi;
15th December, 2017.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1099 OF 2017
(Arising out of SLP(Crl.) No. 6474 of 2016)
TEESTA ATUL SETALVAD …Appellant(s)
:Versus:
THE STATE OF GUJARAT …Respondent(s)
WITH
CRIMINAL APPEAL NO. 1083 OF 2017
(Arising out of SLP(Crl.) No.6477 of 2016)
JAVED IFTEKHER AHMED ANAND …Appellant(s)
:Versus:
THE STATE OF GUJARAT & ORS. …Respondent(s)
AND
CRIMINAL APPEAL NO. 1084 OF 2017
(Arising out of SLP(Crl.) No.6476 of 2016)
CITIZENS FOR JUSTICE & PEACE …Appellant(s)
:Versus:
THE STATE OF GUJARAT & ORS. …Respondent(s)
AND
CRIMINAL APPEAL NO. 1085 OF 2017
(Arising out of SLP(Crl.) No.6475 of 2016)
SABRANG TRUST …Appellant(s)
:Versus:
THE STATE OF GUJARAT & ORS. …Respondent(s)
2
J U D G M E N T
A.M. Khanwilkar, J.
1. The common question posed in these appeals centres around
the sweep, purport and applicability of Section 102 of the Code of
Criminal Procedure, 1973 (hereinafter referred to as “the Code”),
which reads thus:
“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 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
3
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.”
2. The bank accounts, in all nine, of the appellants have been
seized on the instructions of the Investigating Officer as a sequel to
the complaint filed by the members of Gulberg Co-Operative
Housing Society, registered by D.C.P. Police Station, bearing CR
No.1/2014, on 14th January, 2014 for offence punishable under
Sections 406, 420 and 120B of the Indian Penal Code and Section
72A of the Information Technology Act, 2000. The bank accounts
were seized and intimation in that behalf was given to the
concerned Magistrate on 21st January, 2014. The appellants filed a
petition before the Bombay High Court, being Writ Petition
(Criminal) No.173/2014, for quashing of the FIR and for setting
aside the freezing order which, however, was rejected on 4th
November, 2014 with liberty to the appellants to approach the
jurisdictional court. Against the said decision the appellants
preferred special leave petition before this Court, being Special
Leave Petition (Criminal) No.3330/2014, which was allowed to be
withdrawn on 5th May, 2014 with liberty to the appellants to move
4
before the Competent Authority. The appellants then filed Special
Criminal Application No.2710/2014 before the High Court of
Gujarat at Ahmedabad. That application was, however, withdrawn
on 29th September, 2014 with liberty to approach the concerned
Magistrate for appropriate relief.
3. The appellants thereafter moved formal applications before the
Metropolitan Magistrate’s Court at Ahmedabad, being
Miscellaneous Application Nos.175-178/2014 which were dismissed
by common order dated 28th November, 2014 passed by Additional
Chief Metropolitan Magistrate, Ahmedabad. Aggrieved, the
appellants filed four separate revision applications before the High
Court of Gujarat at Ahmedabad, bearing Criminal Revision
Application Nos.249-252 of 2015. While the said revision
applications were pending, the anticipatory bail application filed by
the appellants in connection with the alleged offence came to be
rejected by the High Court by a speaking order dated 12th February,
2015. That order has been challenged by way of Special Leave
Petition (Criminal) No.1512/2015 which has been converted into
Criminal Appeal No.338/2015 and is pending for consideration by a
larger Bench in terms of order dated 19th March, 2015. The
5
appellants have been given interim protection of stay of arrest
during the pendency of the said appeal.
4. The other relevant fact to be noted is that additional offences
have been added to the FIR in relation to which the bank account
freezing directions were issued by the Investigating Officer,
punishable under Sections 467 and 471 of the Indian Penal Code
(“IPC”). Besides, the Competent Authority under the Foreign
Contribution (Regulation) Act, 1976 issued orders on 23rd July,
2015, categorising the authorization in respect of Citizens for
Justice and Peace Trust (“CJP Trust”, appellant in Criminal Appeal
No.1084/2017), as “prior permission”. In so far as the Sabrang
Trust (appellant in Criminal Appeal No.1085/2017), vide order
dated 9th September, 2015 the Competent Authority suspended its
authorisation. It is also relevant to note that FIR has been
registered by the Competent Authority of CBI in respect of violation
of Foreign Contribution (Regulation) Act, 1976. On 8th July, 2015
the appellants have been granted anticipatory bail in respect of the
said offence.
5. Be that as it may, the criminal revision applications preferred
by the appellants before the High Court of Gujarat, challenging the
6
order dated 28th November, 2014 passed by the Magistrate rejecting
the prayer for lifting of the bank account freezing, were finally heard
and dismissed vide common judgment dated 6th/7th October, 2015.
This order is the subject matter of the present appeals. In other
words, the limited issue to be addressed in the present appeals is
about the justness of the action of the Investigating Officer of
freezing of stated bank accounts of the appellants in connection
with FIR registered as CR No.1/2014; and the correctness of the
approach of the Magistrate in rejecting the request for de-freezing
the bank accounts of the appellants as affirmed by the High Court
vide impugned judgment.
6. The genesis of the freezing of the bank accounts of the
appellants is the registration of the FIR bearing CR No.1/2014 on
4th January, 2014. The same reads as follows:
“First Information Report of Offence under police
Jurisdiction
(under Sec.154 of Cr.P.C)
1. Dist. Ahmedabad Po.St. D.C.P. Year-2014.
First Information no. I CR No.01/2014 Dt.4/1/2014.
2. Law
(1) IPC sec.406, 420, 120(B) and The I.T. Act. 72(A)
(2) ---
(3) ---
3. (A) Date of offence occurred and date:- year
from 2007 to till today.
7
(B) Date declared of offence (Po.St.) :- 4/1/14
Time:-14:15
(C) Station diary entry no. 07/2014 Time : 14:15
4. How got information :- Oral or writing :- Writing.
5. Offence place :
(A) Distance of offence from po.st. and direction.
Beat no. / Chawky name…:-
(B) Address :- Gulberg Society, Meghani Nagar,
Ahmedabad and by the interest
(C) If the offence has occurred outside the police
station then name of that police station….:-
6. Complaint / Information :-
(A) Name : Firozkhan
(B) Name of Father : Saeed Khan Pathan
(C) Birth Date/Year : ………………
(D) Nationality : Indian
(E) Passport No………….. Dt. ……………
(F) Occupation : Business
(G) Address : 15, Shukan Residency, 2nd floor,
Opp. Sonal Cinema, Vejalpur Road, Ahmedabad City.
7. Name, Add and details of Accused :-
(1) Teesta Setalvad Resi. Nirant, Juhu Tara
Road, Mumbai
(2) Javed Anand (Husband) Resi. Nirant, Juhu
Tara Road, Mumbai
(3) Tanveer Jafri
(4) Chairman of G.B.Soc. Salim Sandhi.
(5) Secretary of G.B.Soc. Firoz Gulzar M.Pathan
and others who come out after inquiry.
8. Reason for late information :-
9. Narration of Property if lost or theft
10. Total price of theft
11. Accident (if death) death :- ……
12. Details of 1st Information :- ………
8
The facts of this case are such that as mentioned on
above date, time and place, the accused named in
had conspired and exhibited the photographs and
video of Gulberg Society and other affected areas
and the accused had put up on the CJP and
Sabrang‟s websites with the help of internet against
the wishes of the complainant and on the website
appealed wealthy people to deposit donation in the
CJP‟s IDBI bank account as well as Union Bank of
India Account of Sabrang and thereby obtained
deposits of crores of rupees and used the money for
personal use by diverting in different institutions
with one/same address thereby indulging in wrong
activities in the name of religion and used Rs.
1,51,00,000/- for personal use between 2009 and
2011 thereby committed breach of trust & cheated
the victims by using internet.
13. Details of act done after registration of the
offence:-
Dtd. 04/01/2014
My name is Firozkhan Saeedkhan Pathan, Aged 41,
Business. Re.15, Shukun Residency, 2nd Floor, Opp.
Sonal Cinema, Vejalpur Road, Ahmedabad City (M)
9974240961.
On being asked personally, I am giving this
complaint that I am residing at the above mentioned
address with my family since 2004 and own a Relief
Cyber Café at Relief Road.
In the year 2002, I was residing in Bungalow No. 18,
at Gulbarg Society, Chamanpura, Omnagar Road at
Meghaninagar, with my family at the time of Godhra
Riots. This bungalow was in the name of my uncle
Anwarkhan Ahmedkhan Pathan. In this bungalow
the nominee was my aunt Jetunbibi Anwarkhan
9
Pathan. But this massacre time my elder father
Anwarkhan Ahmedkhan Pathan was killed. Thus,
this bungalow is on the name of his wife Jetunbibi
Anwarkhan Pathan who was residing there. This
bungalow no. 18 was three storied. On the ground
floor in two rooms my elder uncle Anwarkhan
A.Pathan and his wife were lived. And other two
rooms my younger uncle Rashidkhan A.Pathan and
his wife Jamilabanu and my grandmother
Kherunnisha A. Pathan lived in it. On the Second
floor two rooms where my uncle Anwarkhan‟s son
Asiamkhan A.Pathan and his wife Suraiya and their
son Azar lived. And in other two rooms my elder
father Anwarkhan‟s younger son Akhtar Khan A.
Pathan and his wife Sajedabanu and their son
Sadab and daughter Farin resided. On the third
floor, I myself, my father and my mother Jehunnissa
and my younger brother Imtiyazkhan Saeedkhan
Pathan were residing. In the year 2002, after
Godhra incident, our Gulbarg Society too was burnt
by anti-social elements and 68 persons killed
including my grand mother Kherunnisha A. Pathan
Aged 80 and my uncle Anwarkhan A. Pathan Aged
70, my mother Johurannisha Saeedkhan Pathan
aged 57, my uncle‟s wife Jamilabanu Rashidkhan
Pathan aged 45 and my elder father Anwarkhan‟s
son Akhtarkhan A. Pathan and his wife Sahedabanu
Akhtarkhan and his son Sadabkhan A.Pathan. We
lived at Dariyakhan Ghummat, Shahibaug relief
camp for three months. At that time Raiskhan
Azizkhan Pathan and Teesta Setawad met us and
told that they run one NGO and had taken an
interview. They told that they would publish the
interview in their magazine namely Communalism
Combat and would help you economically and legally
and also assured of help whenever needed. I did not
know Raiskhan and Teesta Setalwad before this
10
time. After that, we have taken a flat on rent at
Rakhial and live there for one year, and then, in the
year 2004, we lived in a flat which on rent, at
Juhapura for one and half year. And after that we
lived in Ambar tower flat No.28, taken on rent and
lived for one and half year there. After that in the
2007 lived in Firozalla, Nr. Vejalpur and then in the
2010, we shifted 15, Shukun Residency, 2nd floor,
Opp. Sonal Cinema, Vejalpur with my family. After
Godhra Riots, we organized programme for paying
our tribute to our departed souls at Gulbarg Society
on the 28th Feb every year and read Quran there. At
this time, one NGO CJP‟s Ms. Setalvad arrived from
Mumbai assured support in the Gulberg Society‟s
case. This Teesta Setalvad helped us till the trial
went on. She helped us only for the trial case and
not economically.
Then in the year 2007, Teesta Setalvad‟s man one
Raiskhan A. Pathan, resident of Mumbai and at
present residing in Ajit mill compound, Ajit Residency
flat, at Rakhial. They told us that we lived in a
rental house and are tired of paying rent since 2002.
So, went to sell Gulbarg Society, then Raiskhan told
us that he has to talk with her and then reply us.
After some time we the members of society were
went at M.M. Tirmizi‟s office which is at Mirzapur
and arranged a meeting there. In this meeting,
Gulbarg Society members, Raiskhan Pathan, Teesta
Setalwad and M.M. Tirmizi were present. When
Raiskhan told Teesta Setalvad that the members of
the Gulbarg Society wanted to sell their houses, she
got angry at Raiskhan and told us that we all should
not indulge in selling the society and informed that
she would handle it in her own way and asked
Raiskhan to leave the office. Thereafter Ms. Setalvad
organised a meeting of the members of the society
11
and informed chairman, secretary to make a survey
of Then a matting held the members of the society
and told that chairman and secretary surveyed the
society and expressed her wish to make a museum
at this place. I will pay you the value of your houses
within a month.
After this, in 2008, on 28.2.208, when all of us
members and residents of the Gulberg Society
gathered there to commemorate the dead, Teesta
Setalvad had also visited and held a meeting. At this
meeting affected persons following Godhra from
Naroda Gaam, Queishi Yunusmiya and Odh village‟s
Anwarmiyan and Saeed Radeeq Ahmed and Hasan
Khan Pathan and Yusuf Vora and Jaffer Khan
Pathan as also affected persons from Nroda Patiya,
Sardarpura, Visnagar (Deepda Darwaza), and
Pandharwada were also present at the meeting.
Every year since 2007 Teesta Setalvad held
meetings calling affected persons and media persons
and made CDs of the opinions of affected persons
and their plight and talked of making a museum
there. At this meeting, son of former MP Ahsan Jafri,
Tanvir Jafri was also there and spoke of putting a
statute of his father Ahsan Jafri and building a
Museum there.
Then on 28.2.2009, a meeting of the members and
residents of Gulberg society and other victims from
all over Gujarat and the media and other important
people was held when all members of the society
had told her that you had said in the 2007 meeting
that within a month we would be paid. Until now no
money has been paid. Hence pay us the money, we
said. She said that we are collecting funds and as
soon as funds are collected we will be paid, we were
informed. Then, in the years 2010 and 2011 again,
12
on 28.2.2002, she organized functions when also
members had asked questions, but she had made
excused and not given the money.
On 28.2.2012, this Teesta Setalvad organised a
larger, well planed programme at Gulberg Society
where the affected persons of riots, media‟s persons
and Muslim leaders had gathered. At that time, all
over Gulberg society, photos of dead persons on a
Projector were shown. Banners displayed showed as
if the Museum had been created. A large stage was
made a Shobha Mudgal, a famous classical artist
was called and a programme was held. Members of
our society had opposed this and said that since you
had not given any monies to the members and falsely
projected that you had made a museum and collected
donations, since then, strong opposition between
society members and Teesta Setalvad began. Hence
Teesta Setalvad took Tanvir Jafri, and the Chairman
and the Secretary into her confidence and in a
confidential meeting resolved that any persons who
are members of the society could sell sale their
houses to any persons of their choice regardless of
caste or religion at the price of your choosing. Now
none of the built homes will be used by us for the
Museum. The resolution that was passed by which
other society members had opposed it. In our
opposition we had said that for 12 years since the
incident took place, and since 2007, you had on the
excuse of a Museum being built amassed crores of
rupees and this fund you did not use for the Society
or for riot victims, you have not paid any monies. You
have breached our trust and cheated us. Along with
this Teesta Setalvad and resident of Surat, Tanveer
Ahsan Hussain Jafri together, from 2007 to 2012
conducted programmes, made CDs and sent to her
sister, Nargis Jafri and his younger brother Zuber
13
who lived in USA via email and through hard copies.
There, they organised seminars, showed CD‟s and
wrongfully collected funds and collected crores of
rupees for this. At these seminars, now and then,
Teesta Setalvad, Tanveer Jafri, as also their persons,
Father Cedric Prakash and R.B. Shree Kumar (Retd.
D.G.P.) had visited America.
This Teesta Setalvad and Tanveer Jafri and other
persons jointly planned a conspiracy of gathering
photos etc of affected persons of Gulberg Society and
other affected locations and displayed these on the
CJP and Sabrang website and on internet against
our desires.
Then the bank account numbers of the CJP. Institute
Bank A/c. in IDBI No.014104000204736 and the
Sabrang Bank Account @ Union Bank of India
No.369102010802885 were displayed on the
internet and appeals for the fund and crores of
rupees were collected in the bank accounts. This
fund was fraudulently used for their personal
expenses through the creation of different
organisations at the same address.
We got this information under an RTI application:-
that the CJP NGO had, from 2009 to 2011 had
collected Rs.63 (sixty-three) lakhs and the Sabrang
Trust had collected Rs.88 (eighty-eight) lakhs from
local and foreign countries. The members of these
trusts not amassed these funds through
misrepresentation but also used these funds for
personal reasons. These funds were not used for the
benefit of the members of Gulberg Society. Apart from
this also, crores of rupees have also been amassed
by them and used for personal reasons and
committed a breach of trust and cheating with
affected persons.
14
Therefore, a complaint against Teesta Setalvad, her
husband Javed Anand, who both live at „Nirant‟
bungalow, Juhu Tara Road, Mumbai and Tanveer
Jafri, and Chairman of Gulberg Society, Salimbhai
Sandhi and Secretary Firoz Gulzar Mohammed
Pathan and others who may be involved after
investigations, this is my complaint for a detailed
and lawful investigation. The persons unknown are
named as etc. This complaint is true as per my
knowledge which has been read and understood by
me and thereafter signed. I have received a copy of
my complaint.
Sd(C.B.Gamit)
(P.S.I. Crime)
(S.O.G. Crime)
Ahmedabad City.
Sd- Asst.-
Adl. Chief Metro Magistrate Court-11 A‟bad.”
7. Simultaneously, with the registration of the aforementioned
FIR, the Assistant Commissioner of Police, Cyber Cell, Crime
Branch, Ahmedabad issued instructions to the Union Bank of
India, Juhu Tara Branch, Mumbai and IDBI, Khar Branch, Mumbai
to seize the stated bank accounts pertaining to Sabrang Trust, CJP
Trust, Teesta Atul Setalvad and Javad Anand, appellants herein.
Intimation about the seizure of concerned bank accounts was given
to the concerned Magistrate on 21st January, 2014. On the
15
applications for de-freezing of the concerned bank account filed
before the Metropolitan Magistrate Court No. XI, Ahmedabad, it was
mainly contended that - the Investigating Officer had failed to
comply with the mandate of Section 102 of Cr.P.C., by not
informing the Magistrate of the action of freezing of the accounts;
the Investigating Officer has not given prior notice to the account
holders before freezing of their bank accounts; the appellant CJP
Trust, in any case, is not named as accused in the alleged crime
and is not associated with the same in any manner; the concerned
Trust maintains proper accounts which are duly audited and there
is no trace of any illegality committed in respect of receipt and
expenditure; the contributions made by foreign fund is after due
approval of the Competent Authority; the attempt of freezing of the
bank accounts of the Trust and also personal accounts of the
Trustees, in particular private appellants, was motivated and an
attempt to stifle them from carrying on their social welfare
activities; the bank accounts had no causal connection with the
commission of alleged offence in respect of which investigation was
in progress and more so, not even one donor has come forward to
question the intention or activity of the concerned Trust. These
contentions have been duly considered by the Magistrate whilst
16
rejecting the application submitted by the appellants for de-freezing
the accounts. The Magistrate took the view that the private
applicants were the Trustees of the Trusts whose bank accounts
have been seized and preliminary investigation revealed substantial
discrepancies in the accounts, including that the accounts of the
Trusts were not audited for the relevant period and the transactions
and huge withdrawals from the bank accounts raised suspicion
regarding the commission of the alleged offence. It is further held
that since the investigation was at the nascent stage and was in
progress and the private appellants were seemingly not cooperating
with the investigation, the prayer for lifting of seizure of the bank
accounts cannot be acceded to. Accordingly, the applications came
to be rejected vide a common order dated 28th November, 2014 by
the Additional Chief Metropolitan Magistrate Court No.XI,
Ahmedabad.
8. Before the High Court, more or less similar arguments were
canvassed on behalf of the appellants. The High Court in paragraph
15 of the impugned judgment adverted to the gist of contentions
recorded by the Magistrate as under:
17
“15. The questions which raised in the Lower Court,
as submitted by the learned counsel for the
petitioners, were (A) That seizer of accounts was
illegal in absence of prior notice, (B) The action of
freezing of accounts in absence required intimation
to the Magistrate concerned was illegal, (C) The
accounts could not have been freezed for all times to
come and the object of the investigation could have
been achieved by requiring the petitioners to execute
a bond to compensate the State, if at all the case
against the petitioners was made out, (D) Freezing of
accounts could have been resorted only as a sequel
to crime and not for the purpose of discovery of crime,
(E) The accounts had nothing to do with proceeds of
crime and therefore continued seizure was
unnecessary. (F) That accounts were Foreign
Contribution Regularization Accounts (FCRA) under
the authorization of the Home Ministry, and
therefore, local police had no authority to freeze
them.”
9. The High Court then adverted to the arguments of the
appellants as advanced, in paragraphs 16 to 24. The first point was
about the absence of prior notice to the appellants before the
freezing of the bank accounts, which has been rejected following the
Bombay High Court Full Bench decision in the case of Vinoskumar
Ramachandran Valluvar V. The State of Maharashtra1. The
High Court then noted the contention of the appellants that the
Audit Reports of the accounts concerned were submitted to various
authorities, like Charity Commissioner, Home Ministry etc., who
1 (2011) Cri.L.J. 2522 (Bom.)
18
neither raised any objection nor found any irregularity in the
accounts. Further, different contributories including Human
Resources Development Ministry, have contributed to the corpus of
the Trust and none of the contributors or donors have ever raised
any objection about the activities of the appellants. The High Court
also noted that even United Nations Organization was one of the
donors. For obtaining donations from the said organizations, strict
procedure and formalities are required to be complied with and
have been so complied with and only thereafter the donation
amount has been released. The concerned authorities did not find
any irregularities in the transactions in question. It was then
contended that freezing of accounts cannot be for indefinite period.
The appellants can be allowed to operate the accounts upon
execution of a bond and that would subserve the interest of justice.
The appellants also contended that the accounts were re-audited by
the Chartered Accountants and no irregularity or illegality has been
found during the said re-audit. In case there is any illegality or
irregularity, the same can be deciphered by examining the entries in
the books of accounts and the vouchers in the relevant documents
which are already furnished to the Investigating Agency. It was
contended that freezing of the accounts of the Trust, in particular,
19
operated for receiving donations under the FCRA, was motivated
and to completely paralyse the working of the
Trust. It was contended that there can be no presumption that the
use of the funds from the accounts in question was not for private
purpose. It was also contended that the appellants and their
chartered accountants and auditors were extending full cooperation
with the investigation. The principal argument of the appellants was
that the power under Section 102 of Cr.P.C. could not have been
exercised as no material was produced by the investigating
authority to support the fact that the property in question was
parted with to indicate the commission of alleged offence of cheating
or breach of trust or for that matter forgery of the record. These
contentions were countered by the respondents. The High Court
then considered the relevant material placed on record and the
affidavits filed by the investigating authority highlighting the
suspicious transactions done from the stated bank accounts and
the conduct of the appellants, including the incorrect statements
made by the appellants on oath in the proceedings before the Court
regarding the maintenance of the accounts of the two Trusts. The
High Court also adverted to the decision of the coordinate Bench
while rejecting the anticipatory bail application preferred by the
20
appellants and inference drawn in support of the conclusion as to
why the prayer for anticipatory bail should be rejected. The same
has been extracted in paragraphs 37 and 38 of the impugned
judgment, which read thus:
“37. From the aforestated facts this Court drew
following inference thus:
„Thus, from the above, it is evident that the accounts
were also not audited for a long period of time, and it
is only when the FIR was registered wherein serious
allegations of misappropriation of lacs of rupees have
been alleged that all of a sudden the accounts from
April, 2003 to March, 2008 were got audited in the
year 2014.
38. On the basis of the facts available on record as
aforestated, this Court assigned the reasons as to
why custodial investigation was necessary; they
were as under:
(a) From the accounts of the Sabrang Trust and CJP,
a total amount of Rs.1,69,84,669=00 have been
transferred to the Sabrang Communication &
Publishing Pvt Ltd, a company owned by the
petitioners.
(b) From the accounts of the Sabrang Trust and of
CJP, an amount of Rs.46,91,250=00 and
Rs.28,34,804=00 were transferred to the personal
accounts of the petitioner nos. 1 & 2 respectively.
(c) From the accounts of the Sabrang Trust and CJP,
the petitioners have withdrawn Rs.1,08,73,782=00
as cash.
21
(d) From the accounts of the Sabrang Trust and CJP,
the petitioners have paid Rs.29,66,121=00 towards
Credit Card payments.
(e) The petitioners have endeavored to explain the
credit card payment running into lakhs of rupees by
stating that all such personal expenditure were
repaid to the NGO Page 40 of 48 HC-NIC Page 40 of
48 Created On Fri May 06 16:33:26 IST 2016
R/CR.RA/249/2015 JUDGMENT accounts. This
employment of public donations to personal use
needs to be investigated. The petitioners have not
submitted any debit/ credit vouchers and/or cheques
details to prove their statement.
(f) Upon scrutiny of the saving accounts
Nos.014104000142595 & 014104000142601 of the
petitioner nos. 1 & 2 with the IDBI, Mumbai, it was
noticed that both the accounts were opened on
30.04.2005. The FCRA permission from MHA for CJP
and Sabrang Trust was granted in November, 2007.
Proposal to purchase the Gulbarg Society was
mooted by petitioner no.1 orally in December, 2007
and formally in January, 2008, Resolution was
passed by the society accepting her proposal in June,
2008 and thereafter the advertisements commenced
and monies started pouring in. Further no
substantial income of any nature, except from the
CJP and Sabrang Trust, is noticed in both the above
mentioned personal accounts of the petitioners,
which were further invested in fixed deposits, shares
and mutual funds such as ICICI Prudential, Reliance
Capital, Kotak Mahindra, Franklin Templeton etc.
(g) The donations received by the Sabrang Trust and
CJP are utilized for personal purposes.
(h) Receipt of donations to the tune of
Rs.29,20,000=00 from Ashoka Foundation, Arlington,
USA, in the personal accounts of Ms. Setalvad and
Rs.6,05,442=00 as foreign remittance in Ms.
Setalvads personal account.
22
(i) Monthly withdrawal of salary by both the accused
from all the six accounts of CJP, Sabrang Trust and
Sabrang Communications.
It also appears that the custodial interrogation is
necessary for the following reasons :
1. The case of the prosecution is based on cogent
documentary evidence received from the Charity
Commissioner, Mumbai, Ministry of Home Affairs,
New Delhi, various Banks, etc. Financial details
received from these authorities require detailed
investigation.
2. The petitioners have never remained present
before any investigating agency and have employed
every means to avoid the due process of law. The
petitioners seek to avoid custodial interrogation by
the investigating authorities by dismissing cogent
documentary evidence as accounting jugglery.
Approximately 44% of the total donations received in
the Sabrang Trust and approximately 35% of the
total donations received in the CJP, were transferred
to their personal accounts.
3. Cash withdrawal running into over Rs 1.09 crore
need to be further scrutinized and examined wherein
Rs.50,000=00 to Rs.5,00,000=00 have been
withdrawn as cash on a single day.
4. Credit card details received from the UBI and Citi
Bank revealed expenditure of purely personal nature
running into lacs of rupees being serviced from the
CJP and Sabrang Trust accounts through
cheques signed by the petitioners.”
23
10. After having noticed the relevant material, the High Court
proceeded to consider the contentions germane for answering the
issue regarding de-freezing of the bank accounts and answered in
the following words:
“39. This Court is conscious of the fact that question
of custodial investigation is not under consideration.
The endeavour of the Court is to point out material in
possession of the investigating agency in relation to
the accounts in question and the conduct of the
petitioners. It is required to be noted that the
affidavit-in-reply, in the same terms as in the
aforestated bail applications, has been filed by the
State in these petitions also. From the aforestated
facts, it cannot be disputed that the investigating
agency has in its possession a considerable
material entitling it to freeze the accounts of the
petitioners under Section 102 of Cr.P.C. The power
to seize the tainted property or the property which is
doubted as tainted, on the basis of substantial
material under Section 102 of Cr.P.C. is not in
dispute. It is also settled legal position that the
investigating agency, while investigating the matter,
is the master of its case; the Courts would be loath to
interfere in the investigation in absence of serious
irregularity or illegality aimed at mala fide impairing
the right of the accused rather than serving public
interest. It may be true that the action of the
investigating agency at the inception may not be
regular, but the Court cannot be oblivious to the
collection of substantial material by the investigating
agency justifying the action under Section 102 of
Cr.P.C. Therefore, it is insignificant at this stage,
when the investigation has progressed to a
material point, to ponder around the question as
to whether the act of freezing the accounts was a
sequel to crime or the crime was detected later. If
24
the arguments to that effect advanced by the
learned counsel for the petitioners is accepted at
this stage, it would advance the public injustice
rather than serving the ends of justice. De-freezing
accounts on the basis of such arguments, may
paralyze the investigation, which cannot be
approved as an act ‘in the interest of justice.’
40. Having found the aforestated serious material
against the petitioners, it cannot be said that the
execution of the bond by the petitioners is a suitable
alternative. Securing the public interest rather than
money is the central point of consideration when
theft or manipulation of accounts meant for the
beneficiaries, is alleged. It is rightly contended by the
learned Public Prosecutor that when the
investigating agency is wanting to ascertain the
extent of the tainted accounts, and when on the basis
of material, the whole corpus of the accounts is under
the cloud of doubt, at this stage, mere execution of
bond is not going to serve the purpose of law.
41. The learned counsel for the petitioners submitted
in the affidavit-in-rejoinder in Para 5.2, that the
petitioners have controverted the facts as regards
non-auditing of accounts by the petitioners for a
continuous period of six years or so as alleged by the
State with appropriate material. That is not the only
question on which the investigation is based as
indicated in detail. Irrespective of the accounts
being audited or not, serious discrepancies have
been noticed by the Court in the audited accounts
submitted to the Charity Commissioner and in the
bank statements etc. It is apparent from the
affidavit-in-reply filed by the State that they have
noticed and compared various entries in the
audited accounts with the statements of the bank
accounts. Further, this is not a stage where the
Court will appreciate the case as if in a trial. The
question is whether there is a material with the
investigating agency justifying freezing of accounts
under Section 102. The purpose of Section 102
obviously is to find out the truth after noticing the
25
material raising doubt about the commission of
offence. At this stage, it is not incumbent upon the
investigating agency to justify the material as if in a
trial and it would be suffice for it to justify the
material for the purpose of investigation. If justifiable
material for investigation is available, the Court
would not sit in appeal over such justification, as
investigation is in the absolute domain of the
investigating agency, and as pointed out earlier,
the Court may interfere only in exception
circumstances.
42. As indicated above, prima facie the entire
accounts are in serious clouds of doubt, and
therefore, freezing thereof could be the only remedy
with the investigating agency. The law must be
allowed to take its own course, even at the cost of
causing inconvenience to the accused or others, and
therefore, the petitioners cannot be heard to
complain that the consequence of legal action has
translated into paralyzing its activities.
43. It is also rightly contended by the learned
Public Prosecutor that arguments of the learned
counsel for the petitioners justifying the
transactions or offering justification as to certain
entries are more in the nature of defence than valid
arguments at this stage. Such facts are required to
be considered at this stage by the investigating
agency on cooperation of the petitioners, and later,
in the trial, if at all the case is found against the
petitioners by the investigating agency for trial, and if
the cognizance of the offence as alleged is taken by
the competent Court. Therefore, arguments that the
trusts are registered under the FCRA 1976, and that
it has various reputed contributors or the donors
including the Human Resources Development
Ministry or that the trusts have avowed objects of
brining about the communal harmony and helping
the victim and providing legal aid to them must fail.
26
44. The arguments impugning the freezing of the
accounts under Section 102 of Cr.P.C. without notice
to the petitioners are to be noted for rejection for the
simple reason that the Section 102 does not
contemplate issuance of any such notice, and for the
purpose of investigation, no notice to the suspect can
be expected under the law. Section 102 of Cr.P.C. is
an important step towards investigation and in view
of settled legal position that accused cannot have
any say in investigation, notice to the suspect is out
of question. The intention of the investigating agency
is not required to be revealed to the suspect at that
crucial stage, else, a message of alert would be
received by the suspect creating a huge room for
manipulation and or destruction of evidence.
45. It is noticed from the impugned order that the
notice of the seizure or freezing of the accounts or its
intimation was sent to the competent magistrate, and
therefore, learned counsel for the petitioners has
fairly not pressed the said argument.
46. It is also misconceived to argue that the seizure
in exercise of powers under Section 102 of Cr.P.C.
would be valid only if the accounts in question
contain the proceeds of crime.
47. There appears to be no substance in the
argument that it is only Human Resources
Development Ministry which can exercise power of
freezing or seizing of the account. There is nothing in
the language of any of the provisions of FCRA 1976
to infer any fetters on the powers of the police to
investigate even those accounts in which the
authorization to obtain the donation even from a
foreign national is granted under the FCRA Act. No
fetters, therefore can be read in the powers of
investigating agency investigating the case under the
Cr.P.C.
27
48. True it is that the learned Government Public
Prosecutor rightly concedes against perennial
freezing of accounts; however, it is for the
investigating agency, probably on conclusion of the
investigation to determine the extent of the
accounts tainted with crime and to De-freeze the
rest, if at all such Defreezing is warranted in the
facts and circumstances of the case. This issue can
be answered from another angle as contended by the
learned Public Prosecutor. If upon conclusion of the
investigation, a part of accounts is found to be
tainted, obviously it would amount to stolen property
within the meaning of Section 410 of IPC, and in such
an eventuality, by no stretch of imagination, a stolen
property can be released before trial or acquittal of
accused.
49. The argument as to applicability of the penal
provisions invoked against the petitioners cannot be
gone into at this stage when the investigation is at
crucial point and the material in this regard is yet to
be placed before the Court after conclusion of the
investigation. In fact, in view of the settled legal
position that accused has no role to play in the
investigation except as indicated in Cr.P.C., the
question as to applicability of a particular provision is
required to be left to the discretion of the
investigating agency and then to the Court as and
when and if the report under Section 173 of Cr.P.C. is
filed.”
11. In the present appeals, the appellants have largely reiterated
the stand taken in the proceedings before the Magistrate and the
High Court, wherefrom the present appeals have arisen. The
appellants contend that to justify the freezing of the bank accounts
the investigating authority must demonstrate that the monies held
28
in these accounts are connected with the commission of the offence.
The investigation of the alleged offence has been a roving one and
the police has investigated the entire accounts of the appellants
even beyond the period referred to in the FIR. Further, the seized
accounts have nothing to do with the subject matter of the FIR. CJP
Trust has no concern with the appeal made by the Sabrang Trust
on its website. The donations were invited by Sabrang Trust to be
deposited in its account displayed on the website. Notably, the
grants/donations made by the donors for executing specific projects
and the amounts were and still are supposed to be spent in
accordance with the agreements. The donors are private parties and
none of them has complained about the embezzlement of their
funds. The donors have been furnished with relevant information
and accounts concerning their donations. In the written
submissions filed by the appellants it is submitted that the
provisions of law sought to be invoked against the appellants and
the transactions in question must necessarily result in commission
of some offence by the appellants so as to invoke Section 102 of the
Code; whereas keeping in mind the ingredients of Sections 405 &
406, there is nothing to indicate that the said offence is made out
against the appellants. Only that private person who has
29
contributed can be heard to make grievance about entrustment and
criminal breach of trust. Not even one donor has come forward to
make such grievance. Similarly, the ingredients of offence of
cheating specified in Section 415 to be an offence under Section
420, required dishonest or fraudulent inducement of any person to
deliver any property to the accused. None of the donors have come
forward to make grievance in that behalf. It is submitted that it is
well settled that if the property is not suspected of commission of
offence, it cannot be seized under Section 102 of the Code. For, the
police officer can seize only such property which may be alleged or
suspected to have been alleged in the commission of offence.
Reliance has been placed on M.T. Enrica Lexie and Anr. v.
Doramma and Ors.2 and Sri Jayendra Saraswathy Swamigal
(II), T.N. v. State of T.N. and Ors.3 to contend that in the absence
of due procedure as specified by Section 102 of the Code, seizure of
bank accounts would be illegal and more so, when it has been done
to stifle all the activities of the Trust. The counsel for the appellants,
during the course of argument, had invited our attention to various
documents and also explained the entries relied upon by the
respondents, which according to the appellants was a tenuous plea
2 (2012) 6 SCC 760
3 (2005) 8 SCC 771
30
to link the stated bank accounts with the crime under
investigation. Details have been given in the written submission as
to how the entries in the books of accounts have been distorted and
misread by the respondents.
12. The respondents, on the other hand, submit that the
investigation is still in progress and the appellants have not given
full cooperation to the Investigating Officer. Rather, the appellants
have caused hurdles in the smooth progress of the investigation of
the alleged crime. The record would reveal that proper procedure for
seizure of the bank accounts was followed and that considering the
nature of allegations in the FIR and the material gathered during
the investigation thus far, would require elaborate investigation
with regard to the subject matter of the FIR. The High Court had
elaborately analysed the material on record while considering the
prayer for grant of anticipatory bail of the private appellants and
prima facie found substance in the allegations against the
appellants of misuse of funds received by them through various
donors and that the appellants were not ready and willing to
cooperate with the investigation. The respondents would submit
that since the investigation is in progress and the material already
gathered throws up circumstances which create suspicion of the
31
commission of the alleged offence, therefore it is imperative to
continue the seizure of bank accounts until it is necessary and till
the completion of the investigation. If the Investigating Officer
eventually finds that the accounts are not tainted with the crime, he
would not hesitate to defreeze the same or to exclude the untainted
amounts.
13. We have heard Mr. Kapil Sibal, learned senior counsel along
with Ms. Aparna Bhat, appearing for the appellants and Mr. Tushar
Mehta, learned Additional Solicitor General along with Mr. Ajay
Chokshi, appearing for the State of Gujarat.
14. The sweep and applicability of Section 102 of the Code is no
more res integra. That question has been directly considered and
answered in the case of State of Maharashtra v. Tapas D.
Neogy.
4 The Court examined the question whether the police officer
investigating any offence can issue prohibitory orders in respect of
bank accounts in exercise of power under Section 102 of the Code.
The High Court, in that case, after analysing the provisions of
Section 102 of the Code had opined that bank account of the
accused or of any relation of the accused cannot be held to be
4 (1999) 7 SCC 685
32
“property” within the meaning of Section 102 of the Code.
Therefore, the Investigating Officer will have no power to seize bank
accounts or to issue any prohibitory order prohibiting the operation
of the bank account. This Court noted that there were conflicting
decisions of different High Courts on this aspect and as the
question was seminal, it chose to answer the same. In paragraph 6,
this Court noted thus:
“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. In this view of the matter
the two further questions that arise for consideration
are whether the bank account of an accused or of his
relation can be said to be „property‟ within the
meaning of sub-section (1) of Section 102 of the
Cr.P.C. and secondly, whether circumstances exist,
creating suspicion of commission of any offence in
relation to the same………..”
15. After analysing the decisions of different High Courts, this
Court in paragraph 12, expounded the legal position thus:
33
“Having considered the divergent views taken by
different High Courts with regard to the power of
seizure under Section 102 of the Code of Criminal
Procedure, and whether the bank account can be
held to be „property‟ within the meaning of the said
Section 102(1), we see no justification to give any
narrow interpretation to the provisions of the
Criminal Procedure Code. It is well known that
corruption in public offices has become so rampant
that it has become difficult to cope up with the same.
Then again the time consumed by the Courts in
concluding the trials is another factor which should
be borne in mind in interpreting the provisions of
Section 102 of the Criminal Procedure Code and the
underlying object engrafted therein, inasmuch as if
there can be no order of seizure of the bank account
of the accused then the entire money deposited in a
bank which is ultimately held in the trial to be the
outcome of the illegal gratification, could be
withdrawn by the accused and the Courts would be
powerless to get the said money which has any
direct link with the commission of the offence
committed by the accused as a public officer. We
are, therefore, persuaded to take the view that the
bank account of the accused or any of his relations
is „property‟ within the meaning of Section 102 of the
Criminal Procedure Code and a police officer in
course of investigation can seize or prohibit the
operation of the said account if such assets have
direct links with the commission of the offence for
which the police officer is investigating into.
xxx xxx xxx xxx xxx
In the aforesaid premises, we have no hesitation to
come to the conclusion that the High Court of
Bombay committed error in holding that the police
officer could not have seized the bank account or
could not have issued any direction to the bank
officer, prohibiting the account of the accused from
being operated upon.”
34
16. After this decision, there is no room to countenance the
challenge to the action of seizure of bank account of any person
which may be found under circumstances creating suspicion of the
commission of any offence.
17. In the present case, FIR has been registered at least against
three private appellants, naming them as accused. CJP Trust has
not been named as an accused in the FIR. But the investigation
thus far, according to the respondents, reveals that Teesta Atul
Setalvad and Javed Anand are actively associated with the said
Trusts and have carried out transactions which may be found
under circumstances suspicious of the commission of the alleged
offence. That is still a matter of investigation. For the present, the
Investigating Officer is of the view that there are certain
circumstances emerging from the transactions done from these
bank accounts which create suspicion of the commission of an
offence. It is on that belief he has exercised his discretion to issue
directions to seize the bank accounts pertaining to CJP Trust.
18. As regards the procedure for issuing instructions to freeze the
bank accounts, it is noticed that the same has been followed by
giving intimation to the concerned Magistrate on 21st November,
35
2014 as required in terms of Section 102 of the Code. There is
nothing in Section 102 which mandates giving of prior notice to the
account holder before the seizure of his bank account. The
Magistrate after noticing that the principle stated by the Division
Bench of the Bombay High Court in the case of Dr. Shashikant D.
Karnik v. State of Maharashtra5 has been overruled in terms of
the Full Bench Judgment of the Bombay High Court in the case of
Vinoskumar Ramachandran Valluvar (supra), rightly negatived
that contention. The Full Bench of the Bombay High Court has
expounded that Section 102 does not require issuance of notice to a
person before or simultaneously with the action attaching his bank
account. In the case of Adarsh Co-operative Housing Society
Limited v. Union of India & Ors.6, the Division Bench of the
Bombay High Court once again considered the issue and rejected
the argument that prior notice to the account holder was required
to be given before seizure of his bank account. It also noted that the
bank account need not be only of the accused but it can be any
account creating suspicion about the commission of an offence. The
view so taken commends us.
5 (2008) Cri.L.J. 148 (Bom.)
6 (2012) Cri.L.J. 520 (Bom.)
36
19. In the case of Sri Jayendra Saraswathy Swamigal (supra),
the Court while considering a transfer petition under Section 406 of
the Code, seeking transfer of the case pending before the Principal
Sessions Court, Chenglepet, to any other State outside the State of
Tamil Nadu, adverted to the circumstance of a motivated order
passed under Section 102 of the Code for freezing of 183 bank
accounts of the Mutt on the ground that the head of the Mutt was
involved in a murder case. In that context, it observed that the
power vested under Section 102 of the Code cannot be stretched to
irrelevant matters, to extremes and to a breaking point. The power
must be exercised cautiously, failing which, the discretion exercised
by the authority would be tainted with arbitrariness. In paragraph
23, the Court observed thus:
“…Again, the action of the State in directing the
banks to freeze all the 183 accounts of the Mutt in
the purported exercise of the power conferred under
Section 102 CrPC, which had affected the entire
activities of the Mutt and other associated trusts and
endowments only on the ground that the petitioner,
who is the head of the Mutt, has been chargesheeted
for entering into a conspiracy to murder
Sankararaman, leads to an inference that the State
machinery is not only interested in securing
conviction of the petitioner and the other co-accused
but also to bring to a complete halt the entire
religious and other activities of the various trusts
and endowments and the performance of pooja and
other rituals in the temples and religious places in
37
accordance with the custom and traditions and
thereby create a fear psychosis in the minds of the
people. This may deter anyone from appearing in
Court and give evidence in defence of the
accused……..”
The Court did not lay down as a proposition that it is impermissible
to freeze multiple bank accounts, even though circumstances
emanating from the nature of transactions effected from the
concerned bank accounts and the conduct of the account holders
created suspicion of the commission of an offence. The Court while
directing lifting of seizure of bank accounts had noted that the Mutt
could not be paralysed by freezing of all its bank accounts in the
guise of a direction issued under Section 102 of the Code. Further,
the continuation of the seizure of all the bank accounts even after
completion of the investigation of the case and filing of charge-sheet
was unwarranted.
20. In the case of M.T. Enrica Lexie (supra), the Court noted in
paragraph 7 that agencies had completed their respective
investigations and vessel was seized in exercise of power under
Section 102 of the Code. In Para 16, the Court noted the
concession given by the counsel for the Government that the vessel
was not the object of the crime or the circumstances which came up
38
in the course of investigation that create suspicion of the
commission of any offence. In that case, it was alleged that while
the fishing boat was sailing through the Arabian Sea, indiscriminate
firing was opened from the vessel in question, as a result of which
two innocent fishermen who were on board, died. The Counsel for
the State had also conceded that the vessel was no longer required
in connection with the offence in question. Indeed, in paragraph
14, the Court made the following observations:-
“14. The police officer in course of investigation can
seize any property under Section 102 if such property
is alleged to be stolen or is suspected to be stolen or
is the object of the crime under investigation or has
direct link with the commission of offence for which
the police officer is investigating into. A property not
suspected of commission of the offence which is
being investigated into by the police officer cannot be
seized. Under Section 102 of the Code, the police
officer can seize such property which is covered by
Section 102(1) and no other.”
These observations are in no way different from the proposition
expounded in the case of Tapas D. Neogy (supra).
21. Keeping these principles in mind and the material on record, it
is noticed that the prosecution has alleged that the two Trusts are
run by the private appellants and other accused. They were actively
involved in collecting huge funds as donation in the name of
39
providing legal assistance to the 2002 Gujarat Riot Victims. Such
donations received by the two Trusts had never reached the victims,
the members of the Gulberg Society in respect of which grievance
has been made in the subject FIR. Further, substantial
discrepancies have been noticed from the bank accounts, copies of
audited account statements and Balance Sheet. The final account
did not tally with the accounts, as submitted. The appellants did
not offer credible explanation in that regard, much less
satisfactory. According to the respondents, the conduct of the
appellants of non-cooperation during the investigation strengthens
the suspicion of the commission of an offence. They provided
incorrect information. It is also a case of non-disclosure and
suppression of material facts. These circumstances create suspicion
of the commission of offence under investigation. It is alleged by
the respondents that the appellants deliberately and intentionally
did not disclose that they have already opened new accounts and
transferred huge sums of money after knowing that stated bank
accounts of the appellants were seized on 21.01.2014 by the
investigating agency. The details of the two newly opened accounts
were not forthcoming. Further, in the proceedings filed before
different Courts, incorrect plea has been taken by the appellants,
40
suggestive of the fact that their accounts were not compliant and
duly scrutinized by the Competent Authority.
22. Suffice it to observe that as the Investigating Officer was in
possession of materials pointing out circumstances which create
suspicion of the commission of an offence, in particular, the one
under investigation and he having exercised powers under Section
102 of the Code, which he could, in law, therefore, could
legitimately seize the bank accounts of the appellants after following
the procedure prescribed in sub-Section (2) and sub-Section (3) of
the same provision. As aforementioned, the Investigating Officer
after issuing instructions to seize the stated bank accounts of the
appellants submitted report to the Magistrate concerned and thus
complied with the requirement of sub-Section (3).
23. Although both sides have adverted to statement of accounts
and vouchers to buttress their respective submissions, we do not
deem it necessary nor think it appropriate to analyse the same
while considering the matter on hand which emanates from an
application preferred by the appellants to de-freeze the stated bank
accounts pending investigation of the case. Indisputably, the
investigation is still in progress. The appellants will have to explain
41
their position to the investigating agency and after investigation is
complete, the matter can proceed further depending on the material
gathered during the investigation. The suspicion entertained by the
investigating agency as to how the appellants appropriated huge
funds, which in fact were meant to be disbursed to the unfortunate
victims of 2002 riots will have to be explained by the appellants.
Further, once the investigation is complete and police report is
submitted to the concerned Court, it would be open to the
appellants to apply for de-freezing of the bank accounts and
persuade the concerned Court that the said bank accounts are no
more necessary for the purpose of investigation, as provided in subSection
(3) of Section 102 of the Code. It will be open to the
concerned Court to consider that request in accordance with law
after hearing the investigating agency, including to impose
conditions as may be warranted in the fact situation of the case.
24. In our opinion, such a course would meet the ends of justice.
We say so also because the explanation offered by the appellants in
respect of the discrepancies in the accounts, pointed out by the
respondents, will be a matter of defence of the appellants.
42
25. We clarify that at an appropriate stage or upon completion of
the investigation, if the Investigating Officer is satisfied with the
explanation offered by the appellants and is of the opinion that
continuance of the seizure of the stated bank accounts or any one
of them is not necessary, he will be well advised to issue instruction
in that behalf.
26. Accordingly, these appeals are dismissed.
…………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
New Delhi;
15th December, 2017.
