The decision reinforced police authority to seize property pending investigation under the BUDS Act, with the burden on petitioners to demonstrate entitlement to custody.

O R D E R

The challenge in this Crl.M.C. is to the order dated 15.02.2023 in Crl.M.P. No.391/2023 in crime No.42/2023 of Thrissur East Police Station passed by the Designated Court (Additional Sessions Court- III, Thrissur) constituted under Section 8 of the Banning of Unregulated Deposit Schemes Act, 2019 (hereinafter referred to as ‘BUDS Act’).

2. The petitioner is accused No.2 in the above crime. The offences alleged against the petitioner and other accused are punishable under Sections 406 and 420 of IPC, Section 3 r/w Section

21, and Section 5 r/w Section 23 of the BUDS Act.

3. The prosecution allegations are as follows:

3.1. The accused were Directors of Safe and Strong Business Consultant Pvt. Ltd. Thrissur. The petitioner and the other accused, being deposit takers of the firm, issued an advertisement soliciting deposits in pursuance of an Unregulated Deposit Scheme. They intentionally made promises to induce depositors to invest in the firm.

4. The Thrissur East Police registered the above crime based on the complaint of one of the depositors. The Police are proceeding with the investigation. The Investigating OfÏcer seized the vehicle bearing registration No.KL-07-CD-9369 from the possession of the petitioner and produced before the Designated Court.

5. The petitioner filed an application seeking interim custody of the vehicle under Section 451 Cr. P. C.. The Court below rejected the application. The operative portion of the order reads thus:-

“5. The above case has been registered alleging commission of offences punishable u/ss. 406 and 420 of IPC and Section 3 r/w 21, 5 r/w 23 of BUDS Act. The learned public prosecutor submitted that the investigation in this case is only in the preliminary stage. As per the provisions in the BUDS Act if it is found that the vehicle was purchased by using the unregulated funds, it has to be confiscated. So, the custody of the vehicle may not be given to the petitioner at this stage. On the other hand the learned counsel for the petitioner argued that neither the petitioner nor her vehicle has any connection with the alleged crime and since the vehicle is not involved in the commission of the crime, the same may be released to the petitioner.

6. On a consideration of the nature of the allegations and the offence alleged against the accused and the fact that the investigation is only in the preliminary state, I am not inclined to release the vehicle at this stage.”

6. Heard the learned counsel appearing for the petitioner and the learned Public Prosecutor.

7. The learned counsel for the petitioner submitted that the investigating agency was not competent to seize the vehicle as there were no allegations to attract the offences under the BUDS Act against the petitioner. It is contended that the seizure of the vehicle is illegal.

8. Per contra, the learned Public Prosecutor contended that the ingredients to attract offences under Section 3 r/w Section 21 and Section 5 r/w Section 23 of the BUDS Act are there in the prosecution allegations, and therefore, the Investigating OfÏcer is competent to seize the vehicle by invoking Sub-section (1)(c) of Section 31 of the BUDS Act.

9. The learned Public Prosecutor further contended that the course open to the petitioner is to approach the Designated Court by invoking Section 17 of the BUDS Act.

10. It is useful to extract Sections 3 and 5 of the BUDS Act.

11. Section 3 reads thus:-

“3. Banning of Unregulated Deposit Schemes On and from the date of commencement of this Act,---

(a) the Unregulated Deposit Schemes shall be banned;

and (b) no deposit taker shall, directly or indirectly, promote, operate, issue any advertisement soliciting participation or enrolment in or accept deposits in pursuance of an Unregulated Deposit Scheme.”

12. Section 5 reads thus:-

“5.Wrongful inducement in relation to Unregulated Deposit Schemes.

No person by whatever name called shall knowingly make any statement, promise or forecast which is false, deceptive or misleading in material fa