De-freeze of Bank Accounts, appeal filed by Teesta dismissed by Supreme Court
December 19, 2017
A Bench of Chief Justice Dipak Misra and Justice A.M. Khanwilkar dismissed the appeal filed by Teesta Atul Setalvad and other appellants to de-freeze their nine bank accounts sized on the instruction of investigation officer in a complaint filed by the members of Gulberg Co-operative Housing Society for offences of cheating, criminal conspiracy, criminal breach of trust and section 72A of Information Technology Act 2000 etc.
The appellants filed a Writ Petition before the Bombay High Court for quashing of the FIR and for setting aside the freezing order which, however, was rejected on 4th November, 2014 with liberty to the appellants to approach the jurisdictional court. Against the said decision the appellants preferred special leave petition before Supreme Court which was allowed to be withdrawn on 5th May, 2014 with liberty to the appellants to move before the Competent Authority. The appellants then filed Special Criminal Application before the High Court of Gujarat at Ahmedabad. That application was, however, withdrawn on 29th September, 2014 with liberty to approach the concerned Magistrate for appropriate relief.
The appellants thereafter moved formal applications before the Metropolitan
Magistrate's Court at Ahmedabad, which were dismissed by common order dated 28th
November, 2014 passed by Additional Chief Metropolitan Magistrate, Ahmedabad.
Aggrieved, the appellants filed four separate revision applications before the
High Court of Gujarat at Ahmedabad. While the said revision applications were
pending, the anticipatory bail application filed by the appellants in connection
with the alleged offence came to be rejected by the High Court by a speaking
order dated 12th February, 2015. That order has been challenged by way of
Special Leave Petition (Criminal) which has been converted into Criminal Appeal
No.338/2015 and is pending for consideration by a larger Bench in terms of order
dated 19th March, 2015. The appellants have been given interim protection
of stay of arrest during the pendency of the said appeal.
The other relevant fact to be noted is that additional offences have been added to the FIR in relation to which the bank account freezing directions were issued by the Investigating Officer, punishable under Sections 467 and 471 of the Indian Penal Code. Besides, the Competent Authority under the Foreign Contribution (Regulation) Act, 1976 issued orders on 23rd July, 2015, categorising the authorization in respect of Citizens for Justice and Peace Trust , appellant in Criminal Appeal No.1084/2017), as 'prior permission'. In so far as the Sabrang Trust (appellant in Criminal Appeal No.1085/2017), vide order dated 9th September, 2015 the Competent Authority suspended its authorisation. An FIR has been registered by the Competent Authority of CBI in respect of violation of Foreign Contribution (Regulation) Act, 1976. On 8th July, 2015 the appellants have been granted anticipatory bail in respect of the said offence.
The criminal revision applications preferred by the appellants before the High
Court of Gujarat, challenging the order dated 28th November, 2014 passed by the
Magistrate rejecting the prayer for lifting of the bank account freezing, were
finally heard and dismissed vide common judgment dated 6th/7th October, 2015.
Against the said order the appellants filed Special Leave Petition with the
Supreme Court. The issue in the appeals is about the justness of the action of
the Investigating Officer of freezing of stated bank accounts of the appellants
in connection with FIR registered as CR No.1/2014; and the correctness of the
approach of the Magistrate in rejecting the request for de-freezing the bank
accounts of the appellants as affirmed by the High Court vide impugned judgment.
The appellants contend that to justify the freezing of the bank accounts the
investigating authority must demonstrate that the monies held in these accounts
are connected with the commission of the offence. The investigation of the
alleged offence has been a roving one and the police has investigated the entire
accounts of the appellants even beyond the period referred to in the FIR.
Further, the seized accounts have nothing to do with the subject matter of the
FIR.
The respondents submitted that the investigation is still in progress and the appellants have not given full cooperation to the Investigating Officer. Rather, the appellants have caused hurdles in the smooth progress of the investigation of the alleged crime. The record would reveal that proper procedure for seizure of the bank accounts was followed and that considering the nature of allegations in the FIR and the material gathered during the investigation thus far, would require elaborate investigation with regard to the subject matter of the FIR.
The court observed that "In the present case, FIR has been registered at least against three private appellants, naming them as accused. CJP Trust has not been named as an accused in the FIR. But the investigation thus far, according to the respondents, reveals that Teesta Atul Setalvad and Javed Anand are actively associated with the said Trusts and have carried out transactions which may be found under circumstances suspicious of the commission of the alleged offence. That is still a matter of investigation. For the present, the Investigating Officer is of the view that there are certain circumstances emerging from the transactions done from these bank accounts which create suspicion of the commission of an offence. It is on that belief he has exercised his discretion to issue directions to seize the bank accounts pertaining to CJP Trust."
Supreme Court said that:
"As regards the procedure for issuing instructions to freeze the bank accounts, it is noticed that the same has been followed by giving intimation to the concerned Magistrate on 21st November, 2014 as required in terms of Section 102 of the Code. There is nothing in Section 102 which mandates giving of prior notice to the account holder before the seizure of his bank account"
The court opined that:
"In our opinion, such a course would meet the ends of justice. We say so also because the explanation offered by the appellants in respect of the discrepancies in the accounts, pointed out by the respondents, will be a matter of defence of the appellants."
Supreme Court dismissed the appeal with a clarification that:
"We clarify that at an appropriate stage or upon completion of the investigation, if the Investigating Officer is satisfied with the explanation offered by the appellants and is of the opinion that continuance of the seizure of the stated bank accounts or any one of them is not necessary, he will be well advised to issue instruction in that behalf."
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Read the Judgment of Supreme Court dated 15.12.2017