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JHARKHAND HIGH COURT
Sanjay Kumar Dwivedi, J.
M/s Madhucon
Projects Ltd. and Ors. – Petitioners
versus
The Union of India, through
Central Bureau of Investigation – Respondent
W.P.(Cr.) No.154 of 2020
Decided on 2.8.2022
Criminal Procedure Code, 1973 – Sections 102, 451 and 457 – Power of Police Officer to seize property – Sub-section (3) of Section 102 Cr.P.C is directory in nature and once court has been informed of freezing of bank account, requirement of statute stands fulfilled – Police officer has power to seize any property which may be alleged or suspected to have been stolen or which may be found in a situation which creates suspicion in creation of any offence, however, sine qua non for exercise of this power is that firstly property must have a direct link alleging to offence; secondly, seizure to be submitted forthwith to Judicial Magistrate; and thirdly, if police officer has to consider that continued retention of property in police custody may not be considered necessary for the purpose of investigation, he may give custody thereof to any person of his executing bond undertaking to produce property before court as and when required – In present case, petitioner has not moved before trial court for defreezing account in question – Accused whose property is seized by police officer can file application to grant interim custody – Petitioner has not approached trial court seeking to grant interim custody of property seized and when an alternative remedy is available, writ petition is not maintainable – Writ petition dismissed with liberty to avail appropriate remedy. (Paras 18, 20, 21 and 23)
Result: Writ Petition dismissed.
JUDGMENT (C.A.V.)
This petition has been filed for quashing the impugned letter dated 02.04.2019 (Annexure-3) issued by the respondent in exercise of powers under section 91 Cr.P.C. directing Canara Bank (Prime Corporate Branch, Secunderabad) and all other consortium of banks funding the project of “4-laning of Ranchi-Jamshedpur National Highway, in the State of Jharkhand, not to allow the petitioners to operate their existing bank accounts, FDs, etc.
2. Further prayer is made for quashing the impugned reply of respondent dated 23.05.2019 dismissing the representation of the petitioner no.1 dated 06.05.2019.
3. Mr. R.S.Mazumdar, the learned Senior counsel appearing on behalf of the petitioners submitted that the petitioner was awarded the project for 4-laning of Ranchi-Rargaon-Jamshedpur section of 163.50 Kms on Design Built Finance Operate Transfer (DBFOT) annuity basis for semi annuity of INR 133.20 Crs. For 15 years.
4. Mr. Mazumdar, the learned Sr. counsel appearing for the petitioners further submitted that on 20.04.2011 Concession Agreement entered between petitioner no.4 (Special Purpose Vehicle of petitioner no.1) and NHAI. Project cost was to be INR 1655 crs with a concession period of 15 years (including 912 days construction period). Consortium of lenders, led by Canara Bank, were to lend INR 1151.96 crs out of which interest during construction (IDC) was stipulated to be INR 147.65 crs.
5. On 06.07.2011 Engineering Procurement and construction contract was signed between the petitioner nos.1 and 4.
6. The learned Sr. counsel appearing for the petitioners submitted that on 17.10.2011 was the scheduled appointed date for commercial operation of the project as per the concession agreement keeping which in mind, petitioner no.1 had mobilized manpower and equipment spread over 7 camp sites at the project site which entailed an expenditure of INR 102.62 crs from its own resources.
7. He further submitted that on 03.01.2012 INR.50 cr was infused by petitioner no. 1 to petitioner no.2 which was onward infused to petitioner no.3 as a subordinate debt. Thereafter as per the Engineering Procurement Construction (EPC) Agreement, petitioner no.4 extended INR 50 crs to the petitioner no.1 as material and mobilization advance which after adjustment against INR 103.62 cr spent on mobilization was further invested by petitioner no.1 in petitioner no.4 as equity through petitioner nos.2 and 3.
8. According to the learned Sr. counsel, on 04.12.2012 appointed date was declared by NHAI. 80% of land was to be handed over at this time with 100% to be handed over within 90 days. However, 80% land was actually handed over after 6 years on 31.05.2018 with NHAI had not obtained statutory environmental and forest clearance mandatorily required whereby the project faced delays, overrun of costs from the planned expenditure.
9. Mr. Mazumdar, the learned Sr. Counsel further submitted that in W.P.(PIL) No.3503 of 2014 on 14.11.2017 this Hon’ble Court directed serious fraud investigation officer (SFIO) to carry out inquiry qua this project due to delay and cost overrun. On 25.07.2018 I.A. No.6613 of 2018 was filed in W.P.(PIL) No.3503 of 2014 by NHAI before this Hon’ble Court seeking permission to terminate concessionaire agreement. On 07.08.2018, PE-02(A)/2018-R was registered on the order dated 25.07.2018 of this Hon’ble Court in W.P.(PIL) No.3503 of 2014.
10. The learned Sr. counsel submitted that on 30.01.2019 termination letter was issued by NHAI to petitioner no.4 without disposal of I.A No.6613/2018 in W.P.(PIL) No.3503 of 2014. Petitioner no.1 had completed 50% of the project by then, with 10% of the works yet to be certified. At this juncture, out of total payment of INR 1431 crs to be received by the petitioner no.1, petitioner no.4 had made payment of only INR 974.35. Out of INR 1151.96 crs to be released by banks, INR 1030.65 crs was only released, with interest during construction (IDC) deducted being INR 378.58 cr. Instead
Power of Police Officer to seize property – Sub-section (3) of Section 102, Cr.P.C is directory in nature. Accused whose property is seized by police officer can file application to grant interim cus....
The freezing of the bank account under section 102 Cr.P.C. must be in compliance with the statutory requirements, and the intimation to the court must be made forthwith as required by the law.
The main legal point established in the judgment is that the procedure for freezing bank accounts under the Unlawful Activities (Prevention) Act, 1967, specifically Section 25, is directory in nature....
Right to property is still a constitutional right under Article 300-A of the Constitution of India though not a fundamental right and the deprivation of the right can only be in accordance with the p....
The main legal point established in the judgment is the legality of freezing bank accounts under Section 102 Cr.P.C. and the applicability of this provision in the context of the case.
The freezing of a business account requires identification of the tainted amount to ensure proportionality, and blanket freezes violate constitutional protections against arbitrary state action.
The Investigating Officer lacks authority under Section 91 of Cr.P.C. to freeze a bank account absent compliance with Section 102, violating procedural requirements and the petitioner's rights.
Seizure of assets under S.102 CrPC requires compliance with statutory provisions and cannot be based solely on suspicion.
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