~By Mansi Pandey
Introduction
Section 102 of the Criminal Procedure Code (hereinafter referred to as ‘Cr.P.C.’ or the ‘code’), deals with the power of the police officers to seize “any property” that is either stolen or creates a suspicion of commission of the offense. Further, the police shall report the seizure to the Magistrate forthwith. It is a settled position of law that the bank account of the accused and his relatives comes within the purview of ‘property’ u/s 102 of Cr.P.C. The Supreme Court has even clarified that immovable property cannot be seized by the police under this section as taking such a harsh action based on mere suspicion of commission of offense would be inappropriate.
Section 102 of the Code refers to the power of the police officers to freeze the bank account linked to offenses related to online fraud, scams, and other economic offenses. The purpose of section 102 is to facilitate investigations and to give police officers the ability to gather and compile evidence to support the allegations made in the charge sheet. India, of late, has witnessed massive digitalization after the demonetization which further got a push due to the Covid-19 lockdown and this has led to a surge in such offenses.
The article seeks to critically evaluate the key provisions and the principle of Section 102(3) of the Code and asses the nature and scope of the provision in light of conflicting opinions expressed by various High Courts.
Connotation of Property
The Supreme Court has noted some conditions that must be satisfied for its application. First, there must be a “property”; next, there must be a suspicion of any offense being committed about that “particular property.” Regarding the “property,” it should be stolen, be under suspicion of being stolen, or be directly linked to the offense.
It is interesting to note that the High Courts have diversely interpreted Section 102(3) of the code and there remain ambiguities and conflicting opinions of the judges on whether it can be considered as a mandatory or a directory provision and the effect of non-compliance of the same.
Judicial Interpretation of section 102(3) Cr.P.C.
According to section 102(3) of Cr.P.C., every police officer who acts in accordance with subsection (1) shall immediately report the seizure to the Magistrate having jurisdiction. If the property seized cannot be transported to the Court conveniently, the police officer may release custody of it to any person upon the execution of a bond undertaking to produce the property before the Court as and when required and to comply with any further orders of the Court regarding its disposal.
Recently, the Allahabad High Court in a two-judge bench, held that ‘non-reporting of seizure forthwith to Magistrate u/s 102 Cr.P.C does not make such seizure by police illegal.’
The court had relied on the judgment in Amit Singh v State of Uttar Pradesh, where it was observed that the bank account that has been seized and is in the custody of the bank is subject to further orders of the court regarding its disposition. Moreover, according to the Code’s scheme, the purpose of providing information to the concerned Magistrate is to bring it to the Court’s knowledge, but no consequences have been provided.
However, in Manish Khandelwal & Ors v State of Maharashtra, the Bombay High Court held that non-compliance with Section 102(3), which is a mandatory provision, will entail a direction to defreeze the accounts.
The Madras High Court also in T. Subbulakshmi’s case, took the view that subsection (3) to section 102, which requires reporting of seizure of property to the concerned magistrate forthwith, is mandatory in nature. Furthermore, since the freezing of the bank account prevents the person from using the bank account as a result of an investigation by the Police in a criminal case filed against him, the Investigating Officer is required by Section 102(3) of the Criminal Procedure Code to report the matter to the Magistrate. The freezing of the bank account cannot be lawfully upheld if any of the procedures under Section 102 of the Criminal Procedure Code were not followed.
Freshly, in a judgment delivered by Madras High Court in July 2022, a similar view was taken by the court. Herein, the account of the petitioner was frozen on 18/2/21 and was informed to the Magistrate on 17/9/21. The seizure of the account was set aside by the court, and it was observed that there should be a reasonable explanation for the delay in reporting to the Magistrate to excuse it.
Section 102(3): a directory or mandatory provision?
The conflict is whether section 102(3), is directory or mandatory. The determination of the nature of the section is possible through examination of its overall structure, intent and its relevance.
The word ‘shall’, as mentioned in the provision gives the impression that the provision is mandatory in nature. However, the word ‘shall’ alone does not make it mandatory ipse dixit.
The Hon’ble Supreme Court, in the case of Nasiruddin & Ors v Sita Ram Agarwal has ruled that it is well established that the wording used in legislation must be interpreted to determine its true objective. It may be true that whether a statute is a directory or mandatory cannot be determined by the use of the words “shall” or “may”. Furthermore, it has been decided that unless the repercussions are mentioned, a public functionary’s obligation to perform a public function within a given time frame would be considered a directory.
Chapter XXXIV of the Code contains the Scheme for Disposal of Property Under the Code. Given its structure, it may be deduced that information supplied to the Magistrate on a Police Officer’s seizure of property is only used to assist in its lawful disposition during or after the trial. Lack of early disclosure of the seizure as required by Section 102(3) Cr.P.C. shall not automatically render the seizure illegal since no period is indicated and its consequences have not been described.
Therefore, it can be concluded that the requirement of Section 102(3) Cr.P.C. cannot be described as mandatory but rather as a directory in nature and that in particular cases, the requirement of the statute is satisfied once the court has been notified of the freezing of a bank account as a result of a petition filed by the petitioner.
Some High Courts have interpreted section 102(3) as mandatory, based on the word “forthwith” mentioned in the section.
A Constitution Bench addressed the meaning of the term “forthwith” in Keshav Nilkanth Joglekar v. The Commissioner of Police, Greater Bombay & Ors, and held that it would only mean that the act should be performed with reasonable speed and expedition and that any delay in the matter should be satisfactorily explained.
In other words, it does not imply simultaneous or instantaneous, time at which a decision is made. It is to be understood through the facts of the case whether the delay in reporting was unreasonable enough to make the seizure unlawful.
There is a possibility that the de-freezing bank accounts could lead to money being stolen or misappropriated, frustrating the inquiry. This might be the justification for the court ruling in favour of the police, to continue the investigation when there is a delay in reporting to the Magistrate. But this should be done considering no prejudice occurred against the accused.
Non-compliance with section 102(3) would be a failure to comply with the provisions of the code. Nevertheless, it is to be noted that in State of Punjab v Balbir Singh, the Supreme Court, in response to the argument that failing to follow the Code of Criminal Procedure, 1973’s provisions related to search and seizure would taint the trial, ruled that, among other things, breaking the rules of Section 102 Cr.P.C. would not in and of itself vitiate the prosecution’s case.
It was further ruled that if there is a violation of this rule, the court must determine whether the accused was prejudiced in any way. As the court considers the evidence and other pertinent circumstances, it needs to be remembered that a violation of this rule has occurred.
Conclusion
There is a need for a Supreme Court decision to settle down the debate and the divergent views taken by the various High Courts on this issue.
The facts and circumstances of the particular case and whether it concerns the accused or a third party, should be considered before deciding on the de-freezing of the bank account due to neglect or delay in following the statutory procedure. Magistrate ensures checks and balances of power in the Criminal Justice System. Thus, it should be considered that owing to the police’s failure to effectively observe the statutory procedure, no direct harm is done to the legitimate party.
It is pertinent to note that there have been increasing cases of corruption and online scams involving crores of money and so, on the technical ground, de-freezing of accounts should not be ordered as it can lead to the misappropriation of huge funds. More specifically in corruption cases, the investigation is at a different pedestal and on a mere technical ground, the entire investigation process should not be vitiated.
[The author of this blog is a 3rd year student at RMLNLU, Lucknow.]
