Allowed

Sri. M. Thanigachalam v. the State of Karnataka

Karnataka HC17 Nov 2023WP/14119/2023

Case brief

AI extract

What is this about?

A writ petition filed to quash police notices directing Axis Bank to freeze the petitioner's account issued under Sections 91 and 102 of the CrPC. The High Court held that failure to intimate the Magistrate as required by Section 102(3) CrPC renders the notice invalid.

What did the court decide?

Impugned notice dated 28.12.2022 quashed; Respondents directed to defreeze petitioner's bank account within one week.

Sri. M. Thanigachalam Vs the State of Karnataka — Writ and Judicial Review | Karnataka HC (2023)

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1 - NC: 2023:KHC:41215 WP No. 14119 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 17^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 14119 OF 2023 (GM-RES)

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BETWEEN:

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SRI. M. THANIGACHALAM, S/O M MANI, AGED ABOUT 49 YEARS, GENERAL MANAGER, M/S GOMES ELECTRICLAS PVT. LTD., NEW NO. 43, OLD NO. 113, 1ST MAIN ROAD, R.K.NAGAR, MANDAVALLI, CHENNAI - 600 028.

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…PETITIONER

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(BY SRI. ARAVIND NEGLUR, ADVOCATE)

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AND:

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Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA, REPRESENTED BY HSR LAYOUT POLICE STATION, BENGALURU, REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, BENGALURU - 560 001.

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M/S. INDELECSA INDIA PVT. LTD., REPRESENTED BY ITS DIRECTOR, SRI. VINOD VISHWANATHAN, SANGAM, NO. 1475/1A, GROUND FLOOR, 13THCROSS, 20TH MAIN, HSR LAYOUT, SECTOR I, BENGALURU - 560 102, REGISTERED UNDER COMPANIES ACT, 2013.

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NC: 2023:KHC:41215 WP No. 14119 of 2023

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AXIS BANK,

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NO. 113, G. N. CHETTY ROAD, WEST T. NAGAR, CHENNAI - 600 017, REPRESENTED BY ITS MANGER.

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…RESPONDENTS

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(BY SRI. KIRAN KUMAR, AGA FOR R1; R2 - SERVED)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE DATED 28.12.2022 ISSUED BY THE R1 POLICE TO THE R3 BANK TO FREEZE THE ACCOUNT NO.014010100238755 OF THE PETITIONER, WHICH IS AT ANNEXURE-A AND ETC.,

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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Heard Sri. Aravind Neglur, learned counsel appearing for the petitioner and Sri. Kiran Kumar, learned AGA appearing for respondent No.1.

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Respondent No.2 is served and unrepresented.

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Learned counsel appearing for the petitioner

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submits that the issue in the lis stands covered by judgment rendered by this Court in W.P.No.7925/2023 disposed on 21.04.2023, wherein this Court has held as follows:

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"The petitioner is before this Court calling in question notices dated 28.12.2022, by which the first respondent – jurisdictional police communicates to respondent Nos.2 and 3 banks to freeze the accounts of the petitioner. A

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consequent direction by issuance of writ in the nature of mandamus to defreeze is sought.

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2. Heard Smt. Anuparna Bordoloi, learned counsel for the petitioner and Sri B.V.Krishna, learned Additional Government Advocate appearing for the first respondent.

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3. Brief facts of the case that leads the petitioner to this Court, in the subject petition as borne out from the pleadings are as follows:

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The petitioner claims to be a company registered under the Companies Act, 1956 and engaged in the business of electrical engineering and contracting services. The respondent No.2 is engaged in the business of supplying, lighting and earthing materials. In the year 2020, the agreement is entered into between the petitioner and the second respondent. Certain disputes arose between the two with regard to supply arrangement between them. The second respondent sets the criminal law in motion by registering a private complaint against the petitioner in P.C.R.No.16119/2022 before the learned Magistrate. The matter is referred to investigation under Section 156(3) of the Cr.P.C. and it then becomes a crime in Crime No.317/2022 registered for offences punishable under Sections 420, 504, 506 r/w. 34 of the IPC, on 06.02.2023.

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4. On registration of the crime, the first respondent issues notices to the third respondent – Axis Bank terming them to be under Sections 91 and 102 of the Cr.P.C., directing freezement of the accounts held by the petitioner with the third respondent. The accounts were frozen on such direction. Freezing of the accounts leads the petitioner to this Court in the subject petition.

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5. The learned counsel appearing for the petitioner would contend that there is blatant violation of law insofar as it pertains to compliance with Section 102 of the Cr.P.C. It is the contention of the petitioner that both Sections 91 and 102 of the Cr.P.C. cannot be invoked in a solitary communication/notices. They operate for different purposes. Therefore, the learned counsel would seek grant of the prayer as sought in the petition.

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6. On the other hand, learned Additional Government Advocate would seek to defend the action on the ground that power under Section 102 of the Cr.P.C. is always available for directing freezing of the accounts of the parties in a given case. Therefore, no fault can be found with the direction for freezement of accounts. He would contend that all necessary requirements of law are fulfilled while directing such freezement.

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7. I have given my anxious consideration to the submissions made by the learned counsel appearing for both the parties and have perused the material on record.

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8. The afore-narrated facts are not in dispute and therefore, requires no reiteration. The issue brought before this Court lies in a narrow compass. The first respondent on registration of the crime in crime No.317/2022 for offences punishable under Sections 420, 504, 506 r/w. 34 of the IPC, issues notices to the third respondent - Axis bank to debit freeze the accounts of the petitioner. The notices are issued both under Sections 91 and 102 of the Cr.P.C. Though the submission is made by the learned counsel for the petitioner that a solitary notice could not contain both the provisions, the same is not considered for the reason that the aftermath of the notices render the notices, a nullity. Section 102 of the Cr.P.C. reads as follows:

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“102. Power of police officer to seize certain property.—

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(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.

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(2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer.

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(3) Every police officer acting under subsection (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it

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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.

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Provided that where the property seized under sub-section (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

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property is less than five hundred rupees, it may forthwith be sold by auction under the orders of the

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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.”

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(Emphasis supplied)

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Sub-section 3 of Section 102 mandates that a moment a debit freeze order is made under Section 102 of the Cr.P.C. intimation to the learned Magistrate is to be made without any loss of time. The allegation is that, there is no communication made to the learned Magistrate which is in violation of Section 102 of the Cr.P.C. Therefore, this Court granted an interim order of stay on 12.04.2023, which reads as follows:

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“Heard learned senior counsel, Sri Sandesh Chouta appearing for the petitioner.

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inasmuch, as the report of such freezing is not immediately reported to the Magistrate. Subsection (3) of Section 102 of the Cr.P.C. mandates that such report shall be made to the Magistrate forthwith, which would mean without any loss of time. Though the freezing order is dated 28/12/2022, four months have passed, there is no intimation to the Magistrate available in this regard. Therefore, the learned Addl. Government Advocate is directed to secure instructions with regard to the intimation to the Magistrate immediately after the freezing order. List this matter on 18/04/2023.”

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Again on 18.04.2023, this Court passed the following order:

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“This Court, on hearing the matter on 12.04.2023 had passed the following order:

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“Heard learned senior counsel, Sri Sandesh Chouta appearing for the petitioner.

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The issue in the lis is with regard to a direction by the Investigating Officer to freeze the account of the petitioner held in Axis Bank. Learned senior counsel, taking this Court through the documents appended to the petition, seeks to demonstrate that the procedures stipulated in sub-section (3) of Section 102 of the Cr.P.C. has been violated, inasmuch, as the report of such freezing is not immediately reported to the Magistrate. Sub-section (3) of Section 102 of the Cr.P.C. mandates that such report shall be made to the Magistrate forthwith, which would mean without any loss of time. Though the freezing order is dated 28/12/2022, four months have passed, there is no intimation to the Magistrate available in this regard. Therefore, the learned Addl. Government Advocate is directed to secure instructions with regard to the intimation to the Magistrate immediately after the freezing order.

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List this matter on 18/04/2023.”

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Learned Additional Government Advocate, on instructions, would seek to submit that the intimation to the learned Magistrate was given on 05.01.2023. If that be so, there should have been a mention in the order sheet, which is appended to the petition.

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Admittedly, the order sheet does not indicate any such intimation to the learned Magistrate, which is on the face of it violative of Section 102(3) of the Cr.P.C.

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Therefore, there shall be an interim order of stay, as prayed for.

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List the matter on 21.04.2023 in the fresh matters list.”

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9. Today, the learned Additional Government Advocate on instructions would admit that there is no intimation sent to the learned Magistrate of the direction for freezement of the accounts of the petitioner by the first respondent. Therefore, there is violation of Subsection (3) of the Section 102 of the Cr.P.C. and the violation renders the impugned communication/notices inoperative and consequent nullity as mere communication/notices under Section 102 of the Cr.P.C. to freeze the accounts without official intimation to the learned Magistrate would be an illegality. On this solitary ground, the petition deserves to succeed.

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10. For the aforesaid reasons, the following:

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ORDER

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a. The writ petition is allowed.

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b. The impugned notices dated 28.12.2022, stand quashed.

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c. The respondent Nos.3 to 5 to defreeze the accounts of the petitioners within one week from the date of the receipt of a copy of this order.

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I.A.Nos.1 and 2 of 2023 are disposed of, as a consequence."

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NC: 2023:KHC:41215 WP No. 14119 of 2023

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Learned HCGP though would seek to refute the

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submissions, but is not in a position to dispute the position of

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law, as is laid down by this Court in the aforesaid petition, therefore, the petition stands allowed on the same reasons rendered therein.

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For the aforesaid reasons, the following:

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ORDER

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a. The writ petition is allowed.

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b. The impugned notice dated 28.12.2022, stands quashed.

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c. Respondent No.3 to defreeze the account of the petitioner within one week from the date of the receipt of a copy of this order.

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Sd/JUDGE

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JY List No.: 2 Sl No.: 34 CT: BHK

Sri. M. Thanigachalam v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Sri. M. Thanigachalam v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

What the court decided

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