K.J. Rohee, J.@mdashRule returnable forthwith by consent of parties.
2. Heard Mr. S.P. Dharmadhikari, Advocate for the petitioner; Mrs. B. H. Dangre, A.P.P. for respondent Nos. 1 and 2; Mr. A. B. Choudhari, Advocate for respondent Nos. 3 and 4 and Mr. M.V. Samarth, Advocate for respondent No. 5.
3. The present application u/s 482 of the Code of Criminal Procedure is an off shoot of what is notoriously known as Government Security Scam in the State of Maharashtra.
4. It seems that Crime No. 124 of 2002 under Sections 406, 409, 420 r/w Section 34 of the Indian Penal Code was registered at Police Station, Wardha against the ex-Directors of Wardha District Central Co-operative Bank Limited, Wardha (respondent No. 5, including respondent Nos. 3 and 4 for misappropriation of an amount to the tune of Rs. 25 crores by investing the said amount with M/s. Home Trade Limited.
5. During investigation the investigating officer issued notice dated 25.11.2002 to the Deputy General Manager, Banking and General Administration, Maharashtra State Cooperative Bank Limited, Fort, Mumbai asking him to freeze the amount in Account No. 101/ 5751 of the petitioner-Bank. The said notice was challenged by the petitioner in earlier Criminal Application No. 2882 of 2002 u/s 482 of the Code of Criminal Procedure. This Court by order dated 1st of August, 2003 rejected the application disagreeing with all the contentions raised by the petitioner-Bank. SLP No. 3395 of 2003 preferred by the petitioner-Bank against the said order was dismissed by the Apex Court by order dated 25.8.2003.
6. After the said decision the investigating officer in Crime No. 124 of 2002 issued letter dated 29.8.2003 to the Deputy General Manager, Regional Office, Maharashtra State Cooperative Bank Limited, Nagpur asking him to freeze an amount of Rs. 25 crores kept with it by the petitioner-Bank in fixed deposit after 19.3.2001 as well as the amount in other accounts of the petitioner-Bank. The said letter also called upon the Deputy General Manager to send demand draft of the said amount in favour of the Chief Judicial Magistrate, Wardha. By the present application, the petitioner-Bank seeks quashing of the said communication.
7. The learned Counsel for the petitioner-Bank vehemently urged that the communication dated 29.8.2003 has been issued by misinterpreting the judgment of this Court dated 1st of August, 2003 in criminal application No. 2882 of 2002. The learned Counsel for the petitioner-Bank submitted that the effect of the said judgment is that the petitioner is unable to challenge the freezing of the amount in Account No. 101/5751. However, by taking advantage of the said judgment, the investigating officer cannot ask the regional office of the Apex Bank to freeze the amount in all other accounts of the petitioner-Bank. He submitted that this would be stretching the powers granted to the investigating officer u/s 102 of the Code of Criminal Procedure too far. He submitted that the amount of Wardha Bank was only routed through Account No. 101/5751. However, the said amount is not at present with the petitioner-Bank. Hence Section 102 of the Code of Criminal Procedure does not empower the Investigating Officer to seize the amount in any other account of the petitioner-Bank. By relying on State of Maharashtra v. Tapas D. Neogy (1999) SLT 294: 4 (1999) CCR 92 : (1999) 7 S C C 686, in which Section 102 of the Code of Criminal Procedure has been interpreted by the Apex Court for the first time. The learned Counsel for the petitioner-Bank submitted that in order to seize "any property under the provisions of Section 102 of the Code of Criminal Procedure such assets must have direct link with the commission of the offence which the police officer is investigating into. In other words, there must be a direct nexus between the offence alleged and the amount sought to be seized. However, in the present case he submitted that the alleged amount is not at all with the petitioner-Bank.
8. He further submitted that the ex-Directors of Wardha Bank wanted to secure the recovery of the said amount by asking for demand draft for that amount through the investigating officer. The Investigating Officer is acting as if he is a recovery officer. The learned Counsel for the petitioner-Bank submitted that it is the personal liability of the ex-Directors of the Wardha Bank to account for the amount alleged to have been misappropriated. In order to avoid their personal liability, they are trying to seek recourse to the freezing of the amount in any other account of the petitioner-Bank. According to him this is beyond the powers of the investigating officer u/s 102 of the Code of Criminal Procedure and the impugned communication, therefore, deserves to be quashed.
9. The learned Counsel for the respondents, on the other hand, submitted that the petitioner-Bank has not raised any new contention by the present application. All these contentions were raised by it in the previous application. The same contentions are being agitated again. The petitioner-Bank is now estopped from raising them. They also submitted that there has been no change in the circumstances since the earlier decision dated 1st of August, 2003.
10. They submitted that the Fund Flow Chart prepared by Mr. Y.C. Dalai and Associates clearly shows that the amount of Rs. 25 crores ultimately was received by the petitioner and the petitioner is responsible to account for the same.
11. It was further submitted that Section 102 of the Code of Criminal Procedure empowers a Police Officer to seize any property which may be found under circumstances which create suspicion of the commission of any offence. There has been direct nexus between the offence of misappropriation and the amount which was ultimately received by the petitioner-Bank. They submitted that in Neogy''s case, the Supreme Court has observed that there is no justification to give any narrow interpretation to the provisions of Section 102 of the Code of Criminal Procedure. In view of this they submitted that the communication dated 29.8.2003 is perfectly within the competence of the investigating officer.
12. I have carefully considered the rival submissions. I have also gone through the present application, reply thereon as well as the judgment of this Court dated 1st of August, 2003 in Criminal Application No. 2882 of 2002.
13. It was tried to be shown as if because of. the communication dated 29.8.2003 there has been change in the circumstances and the exercise of the powers of this Court u/s 482 of the Code of Criminal Procedure is required.
14. A perusal of the judgment dated 1st of August, 2003 of this Court shows that the Court has taken into consideration the circumstances that might arise even after the petitioner-Bank parted with the amount in question.
15. To meet the argument made by the learned Counsel for the petitioner-Bank that the tainted amount is not with the petitioner-Bank and as such the amount lying in other accounts of the petitioner-Bank cannot be freezed, the observations of this Court in Para 7(b) of the order dated 1st of August, 2003 would be enough. I quote them as under:
"As regards the contentions of the Applicant Bank contained in Para (4-b), in my view the subsequent transaction dated 20.3.2001, whereby an amount of Rs. 40,44,20,666.67 Ps. is shown to have been forwarded to "Home Trade Limited" is an independent commercial transaction in the ordinary course of Bank business. The commercial risks involved with this and any subsequent Bank transaction rests solely with the Applicant Bank, just as they would be entitled to any benefits accruing therefrom. In my view, any such subsequent transactions cannot affect any rights vested in the police to seize property u/s 102 of the Code of Criminal Procedure, 1973, the fact that the amount of Rs. 40,44,20,666.67 Ps. was given from the same account into which the money was received from "M/s. Euro Discover India Limited", cannot make any difference to the legal position as for the purpose of determining the right to seizure, Bank''s assets cannot be compartmentalised into individual accounts. If such compartmentalisation were allowed, it would be the easiest thing to avoid seizure by transferring it to another account or investing it in different assets."
16. In my opinion, this is the perfect answer to the grounds raised on behalf of the petitioner-Bank. It may be noted that prohibition to freeze the amount to the extent of Rs. 25 crores in other accounts of the petitioner-Bank would give a free hand to the petitioner-Bank to spend the amount as it likes and to defeat the claims of the rightful claimants.
17. In this view of the matter, I see no reason to exercise inherent powers of this Court. There is no force in the application and the same is liable to be rejected. The criminal application is accordingly rejected.
18. The learned Counsel for the petitioner-Bank prays that three weeks'' time may be granted to challenge this order. He submitted that in the meanwhile the petitioner-Bank is prepared to give an undertaking that the precaution would be taken that sum of Rs. 25 crores would remain in the account of the petitioner-Bank.
19. In view of this submission, three weeks'' time is granted to the petitioner-Bank to move the Apex Court. In the meanwhile, the petitioner-Bank is directed to submit an undertaking that it would see that the amount in its account with the apex Bank does not fall below Rs. 25 crores. The undertaking is to be submitted by tomorrow i.e. 11th December, 2003.
