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2016 Supreme(Mad) 2974
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.N. PRAKASH, J.
Rakesh P. Sheth - Petitioner
Vs.
The State represented by the Inspector of Police Central Crime Branch Vepery - Respondent
Crl. O.P. No. 19618 of 2016 & Crl. M.P. No. 9199 of 2016
Decided On : 15-09-2016
For the Petitioner: Mr. Nithyaesh Natraj
For the Respondent: Mr. C. Emalias, Additional Public Prosecutor.
For the Intervener : Mr. A. Ramesh, Senior Counsel for Mr. V. Vijayakumar.
The duty of the police to inform the account holder about the freezing of their account under S. 102, Cr.P.C to avert disastrous consequences.
Headnote:
Bank Accounts - Freezing of Accounts - S. 482, Cr.P.C - S. 102, Cr.P.C
Fact of the Case:
The petitioner sought to defreeze their bank accounts which were frozen by the police following a complaint of misappropriation of funds. The police froze 8 bank accounts of the petitioner and his family members.
Finding of the Court:
The court found that the freezing of the bank accounts was a colorable exercise of power by the police and directed the respondent police to defreeze the bank accounts of the petitioner.
Issues: The main issue was whether the police had the authority to freeze the bank accounts and whether the account holders should have been informed about the freezing of their accounts.
Ratio Decidendi: The court held that while the police had the power to freeze the accounts under S. 102, Cr.P.C, they were duty-bound to inform the account holders about the freezing of their accounts to avert disastrous consequences.
Final Decision: The Criminal Original Petition was allowed, and the respondent police was directed to defreeze the bank accounts of the petitioner.
1. This Criminal Original Petition is filed seeking to direct the respondent police to defreeze the bank accounts of the petitioner, viz., SB/01/2655, SB/01/2806, SB/01/2740, CBCA 01/342, CBCA/01/349, CBCA/01/350, CBCA/01/353 and SB/01/2518, in exercise of the inherent powers under S. 482, Cr.P.C.
2. For the sake of convenience, the parties are referred to by their name.
3. On the complaint lodged by one Sree Vidhya (intervener), the respondent police registered a case in Crime No. 180/2016 on 13.07.2016 under Section 420 read with Section 34 IPC against one Rakesh Sheth, his wife Roshini P. Sheth and Premsai Chundur. The allegation in the FIR against them is as under:
4. Sree Vidhya is a small time entrepreneur and she got introduced to Roshni P. Sheth in the year 2005, in connection with some interior design work, which she wanted to do in her newly purchased flat. Thereafter, Sree Vidhya also got to know Roshni P. Sheth's husband Rakesh P. Sheth. It is alleged by Sree Vidhya that she wanted to purchase a property and so, she approached Rakesh P. Sheth to construct a residential house in the property to be purchased. Admittedly, Sree Vidhya and Karismaa Foundations Pvt. Ltd. in which Rakesh P. Sheth is the Managing Director, entered into a construction agreement on 10.11.2014 under which Karismaa Foundations Pvt. Ltd. agreed to construct a residential building for Sree Vidhya for a turnkey price of Rs.4 crores. Pursuant to this agreement, Sree Vidhya transferred a sum of Rs.1.50 crores to the account of Karismaa Foundations Pvt. Ltd. in State Bank of Travancore by RTGS on 04.12.2014. It is alleged by Sree Vidhya that after receiving the sum of Rs.1.50 crores, Karismaa Foundations Pvt. Ltd. did nothing to even commence construction of the building nor did they return the money, despite persistent requests made by her. It is further alleged in the complaint that out of Rs.1.50 crores, Karismaa Foundations Pvt. Ltd. paid Rs.15 lakhs to Sree Vidhya and for the balance amount of Rs.1.35 crores, a cheque dated 30.06.2015 was given, which, when presented by Sree Vidhya, was dishonoured. There has been exchange of notices between Sree Vidhya and Karismaa Foundations Pvt. Ltd. Ultimately, on Sree Vidhya's complaint, the police have registered the present FIR.
5. After registration of the FIR, police have issued a direction under Section 102 Cr.P.C. freezing 8 bank accounts of Roshni P. Sheth, Rakesh P.Sheth, Karismaa R. Sheth, Clover Design Studio and Karismaa Foundations Pvt. Ltd. in various banks, challenging which, Rakesh P. Sheth and his wife Roshni P. Sheth are before this Court. The details of the accounts frozen by the police are as under:
1. SB/01/2655 in the name of Mrs. Roshini R.Sheth & Mr.Rakesh P. Sheth.
2. SB/01/2806 in the name of Rakesh P. Sheth, HUF
3. SB/01/2740 in the name of Karishma R. Sheth, M/G/F Rakesh P. Sheth
4. CBCA/01/342 in the name of M/s. Clover Design Studio, Proprietrix: Roshini R. Sheth
5. CBCA/01/349 in the name of M/s. Karismaa Foundations P. Ltd. ACR Sathyam Neelankarai
6. CBCA/01/350 in the name of M/s. Karismaa Foundations P Ltd. ACR Sathyam T. Nagar
7. CBCA/01/353 in the name of M/s. Karismaa Foundations Pvt. Ltd.
8. SB/01/2518 in the name of Mr. Rakesh P. Sheth and Mrs. Roshini R. Sheth
6. Heard Mr. Nithyaesh Natraj, learned counsel for Rakesh P.Sheth and Roshni P. Sheth, Mr. C. Emalias, learned Additional Public Prosecutor for the respondent State and Mr. Ramesh, Senior Counsel for Sree Vidhya.
7. It may be relevant to state here that Rakesh P. Sheth has filed Crl.O.P. No.18099 of 2016 for quashing the FIR in Crime No.180 of 2016 and this Court, by order dated 17.08.2016, has stayed the further investigation in Crime No.180 of 2016.
8. Mr. Nithayesh Natraj, learned counsel for Rakesh P. Sheth and Roshni P.Sheth submitted that they never denied the receipt of Rs.1.50 crores by RTGS from Sree Vidhya, but, on account of certain misfortune in business, they were not able to immediately repay the amount t
