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SC dismisses Teesta Setalvad’s appeal against freezing of bank accounts [Read Judgment]

The Supreme Court of India (“Court”) in a number of appeals in the matter of Teesta Atul Setalvad v. State of Gujarat and Ors. was posed with the question of “sweep, purport and applicability” of Section 102 of the Code of Criminal Procedure, 1973 (“Code”) and dismissed the petitions by upholding the verdict of lower court. A bench comprising of Chief Justice Dipak Misra and Justice A.M.Khanwilkar heard the present cases.

On a complaint filed by the members of the Gulberg Co-operative Housing Society for various offences committed by the Appellants, their bank accounts were frozen. 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 and liberty was given to the Appellants to approach the jurisdictional court. After several other rejections from different courts of law, the criminal revision applications preferred by the appellants before the High Court of Gujarat, challenging an 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. The present appeals were filed against this order.

In the words of the Court, the question of law to be decided in this case was:

“…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.”

On the applications for de-freezing of the concerned bank account filed before the Metropolitan Magistrate Ahmedabad, it was mainly contended that the Investigating Officer had failed to comply with the mandate of Section 102 of Code. 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.

In the Bombay High Court too, the contentions were similar by the Appellants. 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:

“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.”

After hearing both parties, dismissing the petitions the Court upheld the validity of the judgement of the lower court and concluded by saying:

“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.”

Read the judgment below:

Teesta Setalvad Case-watermark

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