Supreme Court of India
TEESTA ATUL SETALVADversusTHE STATE OF GUJARAT
- Citation
- 2017 INSC 1239
- Decided
- 15 December 2017
- Disposal
- Dismissed
- Bench
- DIPAK MISRA
Holding
Section 102 CrPC authorises the seizure of bank accounts of the accused or their relations when material creates suspicion of an offence, and no prior notice to the account holder is required; the freezing is valid if procedural intimation to the magistrate is made.
Summary
The Supreme Court examined whether the police could lawfully freeze the bank accounts of Teesta Atul Setalvad, Javed Anand and related trusts under Section 102 of the Criminal Procedure Code (CrPC) without prior notice to the account holders. The investigation, stemming from an FIR alleging misappropriation of donations meant for 2002 Gujarat riot victims, revealed substantial discrepancies in the trusts' accounts, prompting the investigating officer to seize nine accounts and inform the magistrate as required by law. The Court held that bank accounts of the accused or their relations constitute "property" under Section 102 and may be seized when there is material creating suspicion of an offence; the statute does not mandate prior notice to the account holder. The procedural compliance of intimating the magistrate was satisfied, and the freezing remains valid while the investigation continues, with the appellants free to seek de‑freezing after the probe concludes. Consequently, the appeals were dismissed, upholding the lower courts' orders.
Issues considered
- The scope and applicability of Section 102 CrPC to the seizure of bank accounts of accused persons and their associates.
- Whether prior notice to the account holder is required before freezing under Section 102.
- The procedural requirements (intimation to magistrate) for exercising power under Section 102.
- Whether the freezing of accounts can continue pending the conclusion of the investigation.
Legislation cited
- Code of Criminal Procedure, 1973s. 102(1), s. 102(2), s. 102(3)
- Foreign Contribution (Regulation) Act, 1976
- Indian Penal Code, 1860s. 120B, s. 406, s. 410, s. 420
- Information Technology Act, 2000s. 72A
Subjects
Section 102 CrPCbank account seizureprior noticeinvestigationforeign contribution regulationtrustsGujarat riotscriminal procedurefreezing of accounts
Judgment
[2017] 12 S.C.R. 774
A TEESTA ATUL SETALVAD
v.
THE STATE OF GUJARAT
(Criminal Appeal No. 1099 of2017)
B DECEMBER 15,2017
[DIPAK MISRA, CJI AND A. M. KHANWILKAR, JJ.]
Code of Criminal Procedure Code, 1973:
s.102 - Sweep, purport and applicability of - Prosecution
c alleged that two Trusts run by the private appellants and other
accused actively collected funds as donation in the name of
providing legal assistance to the 2002 Gujarat riot victims - Such
donations never reached the victims - FIR filed - Investigating
agency noticed substantial discrepancies in bank accounts, copies
of audited account statements and Balance Sheet of the appellants'
D
trusts - Consequently stated bank accounts were seized by the
investigating agency u!s.102 C!'.P.C - Appellant contended that
· power u!s.102 could not have been exercised as no material was
produced by the investigating authority to support the fact that the
proper~l' in question was parted with to indicate the commission of
E alleged offences - Held: Investigating officer was in possession of
materials pointing out circumstances which create suspicion of the
commission of an offence, in particular, the one under investigation
and he having exercised powers u!s. I02 Cr.P. C, which he could, in
latt\ therefore, could legitimate.!Y seize the bank accounts of the
appellants after following the procedure prescribed in sub-section.
F
(2) and sub-section(3) of the provision - Indisputably, investigation
is still in progress - The suspicion entertained by the investigating
agency as to how the appellant appropriated huge fimds will have
to be explained by the appellants - However, once the investigation
is complete and police report is submitted, it would be open to the
G appellants to apply for de-freezing of the bank accounts and
persuade the concerned Court that the said bank accounts are no
more necessary for the purpose of investigation, as provided in
sub-section (3) of s.102 Cr.P.C - Penal Code, 1860 - ss.406, 420
and 120B - Information Technology Act,. 2000 - s. 72A.
H
774
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 775
s.102 - Procedure of - Prosecution alleged that two Trusts A
run by the private appellants and other accused actively collected
funds as donation providing legal assistance to the 2002 Gujarat
riot victims - Such donations never reached the victims - FIR filed
- Investigating agency 11oticed substantial discrepa11cies in bank
accounts, copies of audited account statements and Balance Sheet B
of the appellants' trusts - Consequently stated bank accounts were
seized by the investigating agency u/s.102 Cr.P. C - Appellant
contended that !11vestigating officer had not given prior notice to
the account holders before freezing the bank accounts - Hetd: The
procedure for issuing instructio11 to freeze the bank accounts has
been followed in instant case by giving intimation to the concemed C
Magistrate as required in terms of s.102 Cr.P.C - There is nothing
in s.102 which mandates giving of prior notice to the account holder
before the seizure of his bank account.
Dismissing the appeals, the Court
HELD: 1. The sweep and applicability of Section 102 of the D
Code of Criminal Proceedure is no more res integra. That
question has been directly consittered and answered in the case
of State of Jtlaharashtra v. Tapas D. Neogy wherein it was held
that "the bank account of the accused or any of his relations is
'property' within the meaning of Section 102 of the Criminal E
Procedure Code and a police officer in course of investigation
can seize or prohibit the op~ration of the said account if such
assets have direct links with the commission of the offence for
which the police officer is investigating into." After this decision,
there is no room to countenance the challenge to the action of
seizure of bank account of any pcfson which may be found under F
circumstances creating suspicion of the commission of any
offence. (Paras 14, 15 and 16] [798-F, G; 800-B, DJ
2. In the present case, FIR has been registered at least
against three private appellants, naming them as accused. The
appellant-CJP Trust has not been named as an accused in the G
FIR. But the investigation thus far, according to the respondents,
reveals that appellants-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 H
776 SUPREME COURT REPORTS [2017] 12 S.C.R.
A 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. [Para 17)(800-E-G]
B
3. 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 as
required in terms of Section i02_ of the Code. There is nothing
in Section 102 which mandates gi\•ing of prior notice to the
c account holder before the seizure .of his bank aceount.[Para
18][800-H]
4. The Investigating Officer was in possession of materials
pointing out circumstances which create suspicion of the
commission of an offence, in particular, the one under investigation
D and he having exercised powers under Section 102 of the Code,
which he could, in law, therefore, could legitimately seize the bank
accounts of the appellants after following the procedure
prescribed in sub-Section (2) and sub-Section (3) of the same
provision. The Investigating Officer after issuing instructions to
E seize the stated bank accounts of the appellants submitted report
to the Magistrate concerned and thus complied with the
requirement of sub-Section (3).[Para 22](803-G-H; 804-A]
5. Indisputably, the investigation is still in progress. The
appellants will have to explain their position to the investigating
F agency and after investigation is complete, the matter can proceed
further depending on the material gathered during the
investigation. The suspicion entertained by the investigating
agency as to how the appellants appropriated huge funds, which
in fact were meant to be disbursed to the unfortunate victims of
2002 riots will have to be explained by the appellants. Further,
G once the investigation is complete and police report is submitted
to the concerned Court, it would be open to the appellants to
apply for de-freezing of the bank accounts and persuade the
concerned Court that the said bank accounts are no more
necessary for the purpose of investigation, as provided in sub-
H Section (3) of Section 102 of the Code. It will be open to the
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 777
concerned Court to consider that request in accordance with law A
after hearing the investigating agency, including to impose
conditions as may be warranted in the fact situation of the case.
[Para 23][804-C-E)
6. It is clarified that at an appropriate stage or upon
completion of the investigation, if the Investigating Officer is B
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 may issue
instruction in that behalf.[Para 25)(804-G)
State of Maharashtra v. Tapas D. Neogy. (1999) 7 SCC C
685 : [1999) 2 Suppl. SCR 609 - relied on.
Vinoskurnar Ramacha11dran Valluvar v. The State of
Maharashtra (2011) Cri.L.J. 2522 (Born.); Adarsh Co-
operative Housing Society Limited v. Union of India &
Ors. (2012) Cri.L.J. 520 (Born.) - approved. D
MT. Enrica Lexie and Anr. v. Doramma and Ors. (2012)
6 SCC 760 : (2012) 4 SCR 174; Sri Jayendra
Saraswathy Swamigal (11), T.N. v. State of T.N. and Ors.
(2005) 8 SCC 771 : [2005] 4 Suppl. SCR 556; Dr.
Shashikant D. Karnik v. State of Maharashtra (2008) E
Cri.L.•J. 148 (Born.) - referred to.
Case Law Reference
(2011) Cri.L.J. 2522 (Born.) approved Para 9
[2012] 4 SCR174 referred to Para 11
F
[2005) 4 Suppl. SCR 556 referred to Para 11
[1999] 2 Suppl. SCR 609 relied on Para 14
(2008) Cri.L;J. 148 (Born.) referred to Para 18
(2012) Cri.L.J. 520 (Born.) approved Para 18 G
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
1099of2017. ·
From the Judgment and Order dated 06/07. l 0.2015 of the High
Court of Gujarat at Ahmedabad in Criminal Revision Application No.
249 of2015. H
778 SUPREME COURT REPORTS (2017) 12 S.C.R.
A WITH
Crl.A. Nos. 1083, 1084and 1085 of2017.
Kap ii Sibal, Sr. Adv., Ms. Kamini J aiswal, Ashwin S. Mehta, Ms.
Rani Mishra, J atinderpal Singh, Ms. Apa ma Bhat, Pukhrambam Ramesh
Kumar, Ms. Joshita Pai, Raghav Tankha, Adit S. Pujari, Nizam Pasha,
B Advs. for the Appellant.
Tushar Mehta, ASG, Ms. Hcmantika Wahi, Ms. Shodika Sharma,
Ajay Chokshi, Advs. for the Respondents.
The Judgment of the Court was delivered by
c A. M. KHANWILKAR, J. 1. The common question posed in
these appeals centres around the sweep, purport and applicability of
Section I 02 of the Code of Criminal Procedure, 1973 (hereinafter referred
to as "the Code"), which reads thus:·
"102. Power of police officer to seize certain property.- (1)
D Any police officer may seize any property which may be
alleged or suspected to have been stolen, or which may be
found under circumstances which create suspicion of the
commission of any offence.
(2) Such police officer, if subordinate to the officer in charge
E of a police station, shall forthwith report the seizure to that
office~ ·
(3) Every police officer acting under sub-section (I) shall
forthwith report the seizure to the Magistrate having
jurisdiction and where the property seized is such that it
F cannot be conveniently transported to the Court or where
there is difficulty in securing proper accommodation for the
custody of such property, or where the continued retention of
the property in police custody may not be considered
necessary for the purpose of investigation, he may giv._e custody
thereof to any person on his executing a bond undt:rtaking
G · to produce the property before the Court as and when required
and to give effect to the further orders of the Court as to the
disposal of the same.
Provided that where the property seized under sub-section
(I) is su~ject to speedy and natural decay and if the person
H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 779
[A. M. KHANWILKAR, J.]
entitled to the possession of such property is unknown or A.
absent f!nd the value of such property is less than jive hundred
rupees, it may forthwith be sold by auction under the orders
of the Superintendent of Police and the provisions of sections
457 and 458 shall, as nearly as may be practicable, apply to
the net proceeds of such sale." .
B
2. The bank accounts, in all nine, of the appellants have been
seized on the instructions of the Investigating Officer as a sequel to the
complaint filed by the members ofGulberg Co-Operative Housing Society,
registered by D.C.P. Police Station, bearing CR No.1/2014, on 14'"
January, 2014 for offence punishable under Sections 406, 420 and 120B
of the Indian Penal Code and Section 72Aofthe Information Technology c
Act, 2000. The bank accounts were seized and intimation in that behalf
was given to the concerned Magistrate on 21 '' January, 2014. The
appellants filed a petition before the Bombay High Court, being Writ
Petition (Criminal) No.173/2014, for quashing of the FIR and for setting
aside the freezing order which, however, was rejected on 4'" November, D
2014 with liberty to the appellants to approach the jurisdictional court.
Against the iiaid decision the appellants preferred special leave petition
before this Court, being Special Leave Petition (Criminal) No.3330/2014,
which was allowed to be withdrawn on 5'" May, 2014 with liberty to the
appellants to move before the Competent Authority. The appellants then
filed Special Criminal Application No.27l 0/2014 before the High Court E
of Gujarat atAhmedabad. That application was, however, withdrawn on
29'" September, 2014 with libe11y to approach the concerned Magistrate
for appropriate relief.
3. The appellants thereafter moved formal applications before
the Metropolitan Magistrate's Court atAhmedabad, being Miscellaneous F
Application Nos.175-178/2014 which were dismissed by common order
dated 28'h 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,
bearing Criminal Revision Application Nos.249-252 of2015. While the G
. 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 12•h February,
20 LS. That order has been challenged by way of Special Leave Petition
(Criminal) No.1512/2015 which has been converted into Criminal Appeal
H
780 SUPREME COURT REPORTS [2017] 12 S.C.R.
A No.338/2015 and is pending for consideration by a larger Bench in terms
oforderdated 19'h March, 2015. The appellants have been given interim
protection of stay of arrest during the pendency of the said appeal.
4. The other relevant fact to be noteais that additional offences
have been added to the FIR in relation to which the bank account freezing
B directions were issued by the Investigating Officer, punishable under
Sections 467 and 471 of the Indian Penal Code ("IPC"). Besides, the
Competent Authority under the Foreign Contribution (Regulation) Act,
1976 issued orders on z3rd July, 2015, categorising the authorization in
· respect of Citizens for Justice and Peace Trust ('~CJP Trust", appellant
in Criminal Appeal No.1084/2017), as "prior permission". In so far as
c the Sabrang Trust (appellant in Criminal Appeal No. l 085/2017), vi de
order dated 91h September, 2015 the Competent Authority suspended its
authorisation. It is also relevant to note that FIR has been registered by
the Competent Authority of CBI in respect of violation of Foreign
Contribution (Regulation) Act, 1976. On 81h July, 2015 the appellants
D have been granted anticipatory bail in respect of the said offence.
5. Be that as it may, the criminal revision applications preferred
by the appellants before the High Court of Gujarat, challenging the order
dated 28'h November, 2014 passed by the Magistrate rejecting the prayer
for lifting of the bank account freezing, were finally heard and dismissed
E vide common judgment dated 6'hf7•h October, 2015. This order is the
subject matter of the present appeals. In other words, the limited issue
to be addressed in the present 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 CRNo.l/2014; and the
correctness of the approach of the Magistrate in rejecting the request
F for de-freezing the bank accounts of the appellants as affirmed by the
High Corn1 vide impugned judgment.
6. The genesis of the freezing of the bank accounts of the
appellants is the registration of the FIR bearing CR No. l/2014 on 4'h
January, 2014. The same reads as follows:
G
"First Information Report of Offence under police Jurisdiction
(under Sec.154 of Cr.P. C)
1. Dist. Ahmedabad Po.St. D. C.P. · Year-2014.
First Information no. I CR No.01120)4 Dt.41112014.
H
TEESTAATUL SETALVAD v. THE STATE OF GUJARAT 781
[A. M. KHANWILKAR, J.]
2. Law A
(1) JPC sec.406, 420, 120(B) and The l.T. Act. 72(A)
(2)-
(3)-
3. (A) Date of offence occurred and date:- year from 2007 to B
till today. ·
(B) Date declared of offence (Po.St.) :- 411114 Time:-14: 15
(CJ Station diary entry no. 0712014 Time: 14:15
4. How got infonnation :- Oral or writing :- Writing. C
5. Offence place :
(A} Distance of offence from po.st. and direction. Beat no. I
Chawky name ... :-
(B) Address :- Gu/berg Society, Meghani Nagar, Ahmedabad D
and by the interest
(CJ If the offence has occurred outside the police station then
name of that police station .... :-
6. Complaint I information :-
E
(A) Name : Firozkhan
(BJ Name of Father: Saeed Khan Pathan
(CJ Birth Date/Year : ................. .
(DJ Nationality : Indian
F
(E) Passport No .............. Dt. .............. .
(F) Occupation : Business
(G) Address : 15, Shukan Residency, 2"'1 floor, Opp. Sona[
Cinema, Vejalpur Road, Ahmedabad City.
G
7. Name, Add and details of Accused :-
(1) Teesta Setalvad Resi. Nirant, Juhu Tara Roc(d, Mumbai
(2) Javed Anand (Husband). Resi. Ni rant, Juhu Tara Road,
Mumbai . ·
H
782 SUPREME COURT REPORTS [2017] 12 S.C.R.
A (3) Tanveer Jafri
(4) Chairman of GB.Soc. Salim Sandhi.
(5) Secretary of GB.Soc. Firoz Guizar MPathan and others
who come out after inquiry.
B 8. Reason for late information :-
9. Narration of Property if lost or theft
10. Total price of theft
11. Accident (if death) death :- ..... .
c 12. Details of 1-" Information :- ........ .
The facts of this case are such that as mentioned on above
date, time and place, the accused named in had conspired
and exhibited the photographs and video of Gu/berg Society
and other affected areas and the accused had put up on the
D CJP and Sabrang's websites with the help of internet against
the wishes of the complainant and on the website appealed
wealthy people to deposit donation in the CJP's IDBI bank
account as well as Union Bank of Indici Account of Sabrang
and thereby obtained deposits of crores of rupees and used
the money for personal use by diverting in different institutions
E with one/same address thereby indulging in wrong activities
in the name of religion and used Rs. 1,51,00,000/- for
personal use between 2009 and 2011 thereby committed
breach of trust & cheated the victims by using internet.
13. Details of act done after registration of the offence:-
F
Dtd. 0410112014
My name is Firozkhan Saeedkhan Pathan, Aged 41. Business.
Re.15, Shukun Residency, 2•d Floor, Opp. Sonat Cinema, .
Vejalpur Road, Ahmedabad City (M) 9974240961.
G On being asked personally, I am giving this complaint that I
am residing at the above mentioned address with my family
since 2004 and own a Relief Cyber Cafe at Relief Road.
In the year 2002, I was resiaing in Bungalow No. 18, at
Gulbarg Society, Chamanpwa, Omnagar Road at
H
TEESTAATUL SETALVAD v. THE STATE OF GUJARAT 783
[A. M. KHANWILKAR1 .J.)
Meghaninagar, with my family at the time of Godhra Riots. A
This bungalow was in the name of my uncle Anwarkhan
Ahmedkhan Pathan. In this bungalow the nominee was my
aunt Jetunbibi Anwarkhan Pathan. But this massacre time my
elder father Anwarkhan Ahmedkhan Pathan was killed. Thus,
this bungalow is on the name of his wife Jetunbibi Anwarkhan B
Pathan who was residing therk. This' bungalow no. ,18 was
three storied. On the grormd floo,r in· two rooms mY elder
uncle Anwarkhan A.Pathan.and his wife were lived. And other
two rooms my younger uncle Rashidkhan A.Pathan and his
wife Jamilabanu and my grandmother Khenmnisha A. Pathan
lived in it. On the Second floor two rooms where my uncle C
Anwarkhan s son Asiamkhan A.Pathan and his wife Suraiya
and their son Azar lived. And in other two rooms my elder
father Anwarkhan s younger son Akhtar lf.han A. Pathan and
his wife Sajedabanu and th.eir son Sadab and daughter Farin
resided. . On the third floor, 1 myself, my father and my mothe1; D
Jehunnissa and my younger brother lmtiyazkhan Saeedkhan
Pathan were residing. In the yrar 2002, after Godhra Incident,.
our Gulbarg Socie~v too was burnt by anti-social elements
and 68 persons. killed including my grand mother Kherunnisha .
A. Pathan Aged 80 and my uncle Anwark(!an A. Pathan Aged
70, my mother Johurannisha Saeedkhan.Pathan <;1ged 57, my E
uncles wife Jamilabanu Rashidkhan Pathan aged 45 and my
elder father Anwarkhan s son Akhtarkhan A. Pathan and his
wife Sahedabanu Akhtarkhan and his son Sadabkhan
A.Pathan. We lived at Dariyakhan Ghummat, Shahibaug relief
camp for three months. At that time Raiskhan Azizkhan Pathan -F
and Teesta Setawad met us and told that they run one NGO
. and had taken an interview. They told that they would publish
the interview in their magazine namely Communalism Combat.
and would help you economically andlegallyand also assured
of help whenever needed. I did not know Raiskhan and Tees/a
Seta/wad before this time. After that, we have taken a flat on G
rent at Rakhial and live there for one year, and then, in the
year 2004, we lived in a flat wliich on rent, at Juhap1ira for
one and half yeai: And after that we lived in Ambar tower
flat No.28, taken on rent and lived for one and half year
there. After that in the 2007 lived in Firozalla, Nr. Vejalpur
H
784 SUPREME COURT REPORTS [2017] 12 S.C.R.
A and then in the 2010, we shifted 15. Shukun Residency, 2"d
floor. Opp. Sonat Cinema, Vejalpur with my family. After
Godhra Riots, we organized programme for paying our tribute
to our departed souls at Gulbarg Society on the 2811t Feb every
year and read Quran there. At this time, one NGO CJP's Ms.
Setalvad arrived from Mumbai assured support in the Gu/berg
B
Society '.s case. This Teesta Setalvad helped us till the trial
went on. She helped us on(v for the trial case and not
economically.
Then in the year 2007, Teesta Setalvad's man one Raiskhan
A. Pathan, resident of Mumbai and at present residing in 4jit
c mill compoimd, Ajit Residency flat, at Rakhial. They told us
that we lived in a rental house and are tired of paying rent
since 2002. So, went to sell Gulbarg Society, then Raiskhan
told us that he has to talk with her and then reply us. After
some time we the members of society were went at MlvL
D Tirmizi 's office which is at Mirzapur and arranged a meeting
there. In this meeting, Gu/barg Socie(v members, Raiskhan
Pathan, Teesta Seta/wad and MM. Tirmizi were present. When
Raiskhan told Tees ta Setalvad that the members of the Gulbarg
Society wanted to sell their houses, she got angry at Raiskhan
and told us that we all should not indulge in selling the society
E and informed that she would handle it in her own way and
asked Raiskhan to leave the office. Thereafter Ms. Setalvad
organised a meeting of the members of the society and
informed chairman, secretary to make a survey of Then a
matting held the members of the society and told that chairman
F and secretai:v surveyed the society and expressed her wish to
make a museum at this place. 1 will pay you the value of your
houses within a month.
After this, in 2008, on 28.2.208, when all of us members and
residents of the Gu/berg Society gathered there to
G commemorate the dead, Teesta Setalvad had also visited and
held a meeting. At this meeting affected persons following
Godhra fi'om Naroda Gaam, Queishi Yunusmiya and Odh
village's Anwarmiyan and Saeed Radeeq Ahmed and Hasan
Khan Pathan and Yusuf Vora and Jaffer Khan Pathan as
also affected persons from Nroda Patiya, Sardarpura,
H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 785
[A. M. KHANWILKAR, J.]
Visnagar (Deepda Darwaza), and Pandharwada were also A
present at the meeting. Every year since 2007 Teesta Setalvad
held meetings calling affected persons and media persons
and made CDs of the opinions of affected persons and their
plight and talked of making a museum there. At this meeting,
son of former MP Ahsan Jafri, Tanvir Jafri was also there B
and spoke of putting a statute of his father Ahsan Jafri and
building a Museum there.
Then on 28.2.2009, a meeting of the members and residents
of Gufherg society and other victims from all over Gujarat
and the media and other important people was held when all
members of the society had told her that you had said in the c
2007 meeting that within a month we would he paid. Until
now no money has been paid. Hence pay us the money, we
said. She said that we are collecting jimds and as soon as
fimds are collected we will he paid, we were informed. Then,
in the years 2010 and 201l again, on 28.2.2002, she D
organized functions when also n:zembers had asked questions,
but she had made excused and not given. the money.
On 28.2.2012, this Teesta Setalvad organised a larger. well
planed programme at Gu/berg Society where the affected
persons of riots, medias persons and Muslim leaders had E
gathered. At that time, all over Gu/berg society, photos of
dead persons on a Projector were shown. Banners displayed
showed as if the Museum had been created. A large stage
was made a Shobha Mudgal, a famous classical artist was
called and a programme was held. Members of our society
had opposed this and said that since you had not given any F
monies to the members and falsely projected that you had
made a museum and collected donations, since then, strong
opposition between society members and Teesta Setalvad
began. Hence Teesta Setalvad took Tanvir Jafri, and the
Chairman and the Secretary into her confidence and in a G
confidential meeting resolved that any persons who are
members of the society could sell sale their houses to any
persons of their choice regardless of caste or religion at the
price of your choosing. Now none of the built homes will be
used by us for the Museum. The resolution that was passed
H
786 SUPREME COURT REPORTS [2017] 12 S.C.R.
A f.?y which other society members had opposed it. In our
opposition we had said that for 12 years since the incident
took place, and since 2007, you had on the excuse of a
Museum being built amassed crores of rupees and this fimd
you did not use for the Society or for riot victims, you have
not paid any monies. You have breached our trust and cheated
B
us. Along with this Teesta Setalvad and resident of Surat,
Tanveer Ahsan Hussain Jafri together, from 2007 to 2012
conducted programmes, made CDs and sent to her sister,
Nargis Jafri and his younger brother Zuber who lived in USA
via email and through hard copies. There, they organised
c seminars, showed CD's and wrong/idly collected funds and
collected crores of rupees for this. At these seminars, now
and then, Tees ta Setalvad, Tanveer Jafri, as also their persons,
Father Cedric Prakash and R.B. Shree Kumar (Reid. D.GP.)
had visited America.
D This Teesta Setalvad and Tanveer Jafri and other persons
jointly planned a conspiracy of gathering photos etc of
affected persons of Gu/berg Society and other affected
locations and displayed these on the CJP and Sabrang website
and on internet against our desires.
Then the bank account numbers of the CJP. Institute Bank Al
E c. in IDBI No.014104000204736 and the Sabrang Bank
Account-@ Union Bank of India No.369102010802885 wete
displayed on the internet and appeals for the fund and crores ·
of rupees were collected in the bank accounts. This fimd
was fraudulently used for their personal expenses through
F the creation of different organisations at the same address.
We got this information under an RT! application:- that the
CJP NGO had, from 2009 to 2011 had collected Rs.63 (sixty-
three) lakhs and the Sabrang Tn1sf had collected Rs.88 (eighty-
eight) lakhs from local and foreign countries. The members
of these trusts not amassed these funds through
G
m(srepresentation but also used these fimds for· personal
reasons. These funds were not used for the benefit of the
members of Gu/berg Society. Apart from this also, crores of
rupees have also been amassed by them and used for personal
reasons and committed a breach of trust and cheating with
H affected persons.
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 787
[A. M. KHANWILKAR, J.]
Therefore, a complaint against Teesta Setalvad, her husband A
Javed Anand, who both live ai "Nirant' bungalow, Jzih11 Tara·•
Road, Mumbai and Tanveer Jafti, ai1d Chairma1i of Gu/berg
Society, Sali,mbhai Sandhi and Secretary Firoz Guizar
Mohammed Pathan and others who may be involved after
investigatioris, this is my complaint for a detailed and lawji1! B
investigation. The persons unknown are named as etc. This
complaint is true as per my knowledge which has been read
and understood by me m;d thereafter signed. I have received
a copy of my complaint.
Sd-
(C.B.Gamit)
c
(P.S.J. Crime)
(S.O.G. Crime)
Ahmedabad City.
D
Sd- Asst.-
· Adi. Chief Metro Magistrate Court-11 A 'bad."
7. Simultaneously, with the registration of the aforementioned FIR,
. the Assistant Commissioner of Police, Cyber Cell, Crime Branch, E
Ahmedabad issued instructions to the Union Bank of India, Juhu Tara
Branch, Mumbai and IDBI, Khar Branch, Mumbai to seize the stated
bank accounts pertaining to Sabrang Trust, CJP Trust, Teesta Atul
Setal vad and Javad Anand, appellants herein. Intimation about the seizure
of concerned bank accounts was given to the concerned Magistrate on
21" January, 2014. On the applications for de-freezing of the concerned F
bank account filed before the Metropolitan Magistrate Court No. XI,
Ahmedabad, it was mainly contended that - the Investigating Officer
had failed to comply with the mandate of Section 102 ofCr.P.C., by not
informing the Magistrate of the action of freezing of the accounts; the
Investigating Officer has not given prior notice to the account holders G
before freezing of their bank accounts; the appellant CJP Trust, in any
case, is not named as accused in the alleged crime and is not associated
with the same in any manner; the concerned Trust maintains proper
accounts which arc duly audited and there is no trace of any illegality
committed in respect ofrcccipt and expenditure; the contributions made
by foreign fund is after due approval of the Competent Authority; the H
788 SUPREME COURT REPORTS [2017) 12 S.C.R.
A attempt of freezing of the bank accounts of the Trust and also personal
accounts of the Trustees, in particular private appellants, was motivated
and an attempt to stifle them from carrying on their social welfare
activities; the bank accounts had no causal connedion with the commission
ofalleged offence in respect of which investigation was in progress and
more so, not even one donor has come forward to question the intention
B
or activity of the concerned Trust. These contentions have been duly
considered by the Magistrate whilst rejecting the application submitted
by the appellants for de-freezing the accounts. The Magistrate took the
view that the private applicants were the Trustees of the Trusts whose
bank accounts have been seized and preliminary investigation revealed
c substantial discrepancies in the accounts, including that the accounts of
the Trusts were not audited for the relevant period ·and the transactions
and huge withdrawals from the bank accounts raised suspicion regarding
the commission of the alleged offence. It is further held that since the
investigation was at the nascent stage and was in progress and the private
appellants were seemingly not cooperating with the investigation, the
D
prayer for lifting of seizure of the bank accounts cannot be acceded to.
Accordingly, the applications came to be rejected vide a common order
dated 28'h November, 2014 by the Additional Chief Metropolitan
Magistrate Court No.XI, Ahmedabad.
8. Before the High Court, more or less similar arguments were
E canvassed on behalf of the appellants. The High Court in paragraph I 5
of the impugned judgment adv.erted to the gist of contentions recorded
by the Magistrate as under:
"15. The questions which raised in the Lower Court, as
submitted by the learned counsel for the petitioners, were (A)
F That seizer of accounts was illegal in absence of prior notice,
(B) The action of freezing of accounts in absence required
intimation to the Magistrate concerned was illegal, (CJ The
accounts could not have been freezed for all times to come
and the object of the investigation could have been achieved
II
G by requiring the petitioners to execute a bond to compensate
the State, if at all the case against the petitioners was made
out, (D) Freezing of accounts could have been resorted on(v
as a sequel to crime and not for the purpose of discovery of
crime, (E) The accounts had nothing to do with proceeds of
crime and therefore continued seizure was unnecessary. (F)
H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 789
[A. M. KHANWILKAR, J.]
That accounts were Foreign Contribution Regularization A
Accounts (FCRA) under the authorization of the Home
Ministry, and therefore, local police had no authority to freeze
them."
9. The High Court then adverted to the arguments of the appellants
as advanced, in paragraphs 16 to 24. The first point was about the B
absence of prior notice to the appellants before the freezing of the bank
accounts, which has been rejected following the Bombay High Court
Full Bench decision in the case of Vinoskumar Ramacha11dran
Va/luvar V. Tlte State of Maharashtra'. The High Court then noted
the contention of the appellants that the Audit Reports of the accounts
concerned were submitted to various authorities, like Charity c
Commissioner, Home Ministry etc., who neither raised any objection
nor found any irregularity in the accounts. Further, different contributories
including Human Resources Development Ministry, have contributed to
the corpus of the Trust and none of the contributors or donors have ever
raised any objection about the activities of the appellants. The High Court D
also noted that even United Nations Organization was one of the donors.
For obtaining donations from the said organizations, strict procedure and
formalities arc required to be complied with and have been so complied
with and only thereafter the donation amount has been released. The
concerned authorities did not find any irregularities in the transactions in
question. It was then contended that freezing of accounts cannot be for E
indefinite period. The appellants can be allowed to operate the accounts
upon execution of a bond and that would subserve the irlterest ofj ustiee.
The appellants also contended that the accounts were re-audited by the
Chartered Accountants and no irregularity or illegality has been found
during the said re-audit. In case there is any illegality or irregularity, the F
same can be deciphered by examining the entries in the books of accounts
and the vouchers in the relevant documents which are already furnished
to the Investigating Agency. It was contended that freezing of the
accounts of the Trust, in particular, operated for receiving donations under
the FCRA, was motivated and to completely paralyse the working of
~ G
Trust. It was contended that there can be no presumption that the
use of the funds from the accounts in question was not for private purpose.
It was also contended that the appellants and their chartered accountants
1 (2011) Cri.L.J. 2522 (Born.)
H
790 SUPREME COURT REPORTS [2017] 12 S.C.R.
A and auditors were extending full cooperation with the investigation. The
principal argument of the appellants was that the power under Section
102 ofCr.P.C. could not have been exercised as no material \\'.as produced
by the investigating authority to support the fact that the property in
question :was parted with to indicate the commission of alleged offence
B of cheating or breach of trust or for that matter forgery of the record.
These contentions were countered by the respondents. The High Court
then considered the relevant material placed on record and the affidavits
filed by the investigating authority highlighting the suspicious transactions
done fromthe stated bank accounts and the conduct of the appellants,
including the incorrect statements made by the appellants on oath in the
C proceedings before the Court regarding the maintenance of the accounts
to
of the two Trusts. The High Court also adverted the decision of the
coordinate Bench while rejecting the anticipatory bail application
. preferred by the appellants and inference drawn in support of the
conclusion as to why the prayer for anticipatory bail should be rejected.
D The'.same has been extracted in paragraphs 37 and 38 of the impugned
judgment, which read thus:
"3 7. From the aforestated facts this Court drew following
inference thus:
'Thus, from the above, it is evident that the accounts were
E also noi audited for .a long period of time, and it is only when
the FIR was registered wherein serious allegations of
misappropriation of lacs of rupees have been alleged that all
of a sudden the accounts from April, 2003 to March, 2008
were got audited in the year 2014. ·
F 38. On the basis of the facts available on record as aforestated,
this Court assigned the reasons as to why custodial
investigation was necessary; they were as under:
(a) From the accounts of the Sabrang Trust and CJP, a total
amount of Rs.J,69,84,669=00 have been transferred to the
G Sabrang Communication & Publishing Pvt Ltd, a company
. owned by the petitioners.
(b) From the accounts of the Sabrang Trust and ofCJP, an
amount ofRs.46,91,250=00 and Rs.28,34,804=00 were
tran.iferred to the personal accounts of the petitioner nos. 1
& 2 respectively.
H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 791
[A. M. KHANWILKAR, J.]
(c) From the accounts of the Sabrang Trust and CJP, the A
petitioners have withdrawn Rs.1,08,73,782=00 as cash.
(d) From the accounts of the Sabrang Trust and CJP, the
petitioners have paid Rs.29,66,121=00 towards Credit Card
payments.
(e) The petitioners have endeavored to explain the credit card B
payment running into ,lakhs of rupees by stating that all such
personal expenditure were repaid to the NGO Page 40 of 48
. HC-NJC Page 40 of 48 Created On Fri May 06 16:33:26 lST
. 2016 RICR.RA/24912015 JUDGMENT accounts. This
employment of public donations to personal use needs to be c
investigated. The petitioners have not submitted any debitF
credit .vouchers and/or cheques details to prove their
statement.
(f) Upon scrutiny of · the saving accounts
Nos.014I04000142595 & 01410400014260I of the D
petitioner nos. I & 2 with the IDBI, Mumbai, it was noticed
that both the accounts were opened on 30.04.2005. The FCRA
permission from MHA for CJP and Sabrang Trust was granted
in November, 2007. Proposal to purchase the Gttlbarg Society
was mooted bypetitioner no.I orally in Decembe1; 2007 and
formally in January, 2008, Resolution was passed by the E
society accepting her proposal in June, 2008 and thereafter
the advertisements commenced and monies started pouring
in. Further no substantial i1icome of any nature, except ji·om
the CJP and Sabrang Trust, is noticed in both the above
mentioned personal accounts of the petitioners, which were F
further invested in fixed deposits, shares and mutual fimds
such as ICICI Prudential, Reliance Capital, Kotak Mahindra,
.Franklin Templeton etc. ·
(g) The donations received by the Sabrang Trust and CJP are
utilized for personal purposes. G .
(h) Receipt of donations to the tune of Rs.29,20,000=00 from
Ashoka Foundation, Arlington, USA, in the personal accounts
of Ms. Setalvad and Rs.6,05,442=00 as foreign remittance
in Ms. Setalvads personal account.
H
792 SUPREME COURT REPORTS [2017] 12 S.C.R.
A (i) Monthly withdrawal of salary by both the accused from
all the six accounts of CJP, Sabrang Trust and Sabrang
Communications.
It also appears that the custodial interrogation is necessary
for the following reasons :
B I. The case of the prosecution is based on cogent documentary
evidence received from the Charity Commissione1; Mumbai,
Ministry of Home Affairs, New Delhi, various Banks, etc.
Financial details received from these authorities require
detailed investigation.
c 2. The petitioners have never remained present before any
investigating agency and have employed evety means to avoid
the due process of law. The petitioners seek to avoid custodial
interrogation by the investigating authorities by dismissing
cogent documentary evidence as accounting jugglery.
D Approximately 44% of the total donations received in the
Sabrang Trust and approximate(v 35% of the total donations
received in the CJP, were transferred to their personal
accounts.
3. Cash withdrawal running into over Rs 1.09 crore need to
E be further scrutinized and examined wherein Rs.50,000=00
to Rs.5,00,000=00 have been withdrawn as cash on a single
day.
4. Credit card details received from the UBI and Citi Bank
revealed expenditure of purely personal nature running into
F lacs of ntpees being serviced from the CJP and Sabrang Tntst
accounts through cheques signed by the petitioners."
I 0. After having noticed the relevant material, the High Court
proceeded to consider the contentions germane for answering the issue
regarding de-freezing of the bank accounts and answered in the following
G words:
"39. This Court is conscious of the fact that question of
custodial investigation is not under consideration.
The endeavour of the Court is to point out material in
possession of the investigating agency in relation to the
H accounts in question and the conduct of the petitioners. It is
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 793
[A. M. KHANWILKAR, J.]
required to be noted that the affidavit-in-rep~v, in the same A
terms as in the aforestated bail applications, has been filed
by the State in these petitions also. From the aforestated facts,
it cannot be disputed tltat tlte investigating agency has in its
possession a c:onsiderable material entitling it to freeze tlte
accounts of the petitioners under Section 102 of Cr.P.C. The
B
power to seize the tainted property or the property which is
doubted as tainted, on the basis of substantial material under
Section 102 of O:P.C. is not in dispute. it is also settled legal
position that the investigating agency, while investigating the
matter, is the master of its case; the Courts would be loath to
inte1fere in the investigation in absence of serious irregulari(v c
or illegality aimed at ma/a fide impairing the right of the
accused rather than serving public interest. It may be true
that the action of the investigating agency at the inception
may not be regular, but the Court cannot be oblivious to the
collection of substantial material by the investigating agency D
justifying the action under Section 102 of Cr.P.C. Therefore,
it is insignificant at tltis stage, wlten the investigation ltas
progressed to, a material point, to ponder around tlte question
as to wltether the act offreezing the accoimts was a sequel to
crime or tlte crime was detected later. If tlte arguments to
tltat effect advanced by the teamed counsel for the petitioners E
is accepted at this stage, it would advance tlte public injustice
ratlter titan serviltg tlte ends ofjustice. De-freezing accounts
on tlte basis of such arguments, may paralyze the
investigation, which cannot be approved as an act 'in tlte
interest ofjustice. '
F
40. Having found the aforestated serious material against
the petitioners, it cannot be said that the execution of the
bond by the petitioners is a suitable alternative. Securing the
public interest rather than money is the central point of
consideration when theft or manipulation of accounts meant
for the beneficiaries, is alleged. It is rightly contended by the G
learned Public Prosecutor that when the investigating agency
is wanting to ascertain the extent of the tainted accounts,
and when on the basis of material, the whole corpus of the
accounts is under the cloud of doubt, at this stage, mere
execution of bond is not going to serve the purpose of law.
H
794 SUPREME COURT REPORTS [2017] 12 S.C.R.
A 41. The learned counsel for the petitioners submitted in thf!
affidavit-in-rejoinder in Para 5.2, that the petitioners haye
controverted the facts as regards non-auditing of accounts
by the petitioners for a continuous period of six years or so
as alleged by the State with appropriate material. That is not
the only question on which the investigation is based as
B
indicated in detail Irrespective of the acco11nts being audited
or not, serious discrepancies have been noticed by the Court
in the audited accounts submitted to the Charity Commissioner
and in the bank statements etc. It is apparent from the
affidavit-in-reply Ji!ed by the State that they have noticed and
c compared various 'entries in the audited acco11nts with the
statements of the bank accounts. Further, this is not a stage
where the Court will appreciate the case as if i11 a trial. The
question is whether there is a material with the investigating
agency justifying freezing of accounts under Section 102.
The purpose of Section 102 obviously is to find out the tmth
D
after noticing the material raising doubt about the commission
of offence. At this stage, it is not incumbent upon the
investigating agency to justify the material as if in a trial and
it would be suffice for it to justify the material for ·the purpose
of investigation. If justifiable material for investigation is
E available, the Court would not sit in appeal over such
justification, as investigation is in the absolute domain of the
investigating agency, and as pointed out earlier, the Co11rt
may interfere only in exception circumstances.
42. As indicated above, prima jacie the entire accounts are in
F serious clouds of doubt, and therefore, freezing thereof could
be the only remedy .with the investigating agency. The law
must be allowed to take its own course, even at the cost of
causing inconvenience to the accused or others, and
therefore, the petitioners cannot be heard to complain that
the consequence of legal action has translated into paralyzing
G its activities.
43. It is also rightly contended by the leamed Public Prosecutor
that arguments of'the le'amed counsel for the petitioners
ji1stifying the transactions or offering justification as to certain
.H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 795
[A. M. KHANWILKAR, J.]
entries are more in the nature ofdefence than valid arguments A
at tltis stage. Such facts are required to be considered at this
stage by the investigating agency on cooperation of the
petitioners, and later, in the trial, if at ail the case is found
against the petitioners by the investigating agency for trial,
and if the cognizance of the offence as alleged is taken by B
the competent Court. Therefore, arguments that the trusts are
registered under the FCRA 1976, and that it has various
reputed contributors or the donors including the Human
Resources Development Ministry or that the trusts have
avowed objects of brining about the communal harmony and
helping the victim and p1Vviding legal aid to them must fail. C
44. The arguments impugning the freezing of the accounts
under Section 102 of Cr.P. C. without notice to the petitioners
are to be noted for rejection for the simple reason that the
Section 102 does not contemplate issuance of any such notice,
and for the purpose of investigation, no notice to the suspect D
can be expected under the law. Section 102 of Cr.P.C. is an
important step towards investigation and in view of settled
legal position that accused cannot have any say in
investigation, notice to the suspect is out of question. The
intention of the investigating agency is not required to be
revealed to the suspect at that crucial stage, else, a message E
of alert would be received by the suspect creating a huge
room for manipulation and or destruction a/evidence.
45. It is noticed from the impugned order that the notice of
the seizure or freezing of the accounts or its intimation was
sent to the competent magistrate, and therefore, learned F
counsel for the petitioners has fairly not pressed the said
argument.
46. it is also misconceived to argue that the seizure in exercise
of powers under Section 102 of Cr.P. C. would be valid only if
· the accounts in question contain the proceeds of crime. G
47. There appears to be no substance in the argument that it
is only Human Resources Development Ministry which can
exercise power offreezing or seizing of the account. There is
nothing in the language of any of the provisions of FCRA
H
796 SUPREME COURT REPORTS [2017] 12 S.C.R.
A 1976 to infer any fetters on the powers of the police to
investigate even those accounts in which the authorization to
obtain· the donation even from a foreign national is granted
under the FCRA Act. No fetters, therefore can be read in the
powers of investigating agency investigating the case under
the O:P.C.
B
48. True it is that tile learned Government Public Prosecutor
rightly concedes against perennial freezing of accounts;
however, it is for the investigating agency, probably on
conclusion of the investigation to determine the extent of tile
accounts tainted with crime and to De-freeze the rest, if at all
c such Defreezing is warranted in the facts and cin·umstances
of the case. This issue can be answered from another angle
as contended by the learned Public Prosec11to1: If upon
conclusion of the investigation, a part of accounts is found
to be tainted, obviously it would amount to stolen property
D within the meaning of Section 410 of !PC, and in such an
eventuality, by no stretch of imagination, a stolen property
can be released before trial or acquittal of accused.
49. The argument as to applicability of the penal provisions
invoked against the petitioners cannot be gone into at this
E stage when the investigation is at crucial point and the material
in this regard is yet to be placed before the Court after
conclusion of the investigation. In fact, in view of the settled
legal position that accused has no role to play in the
investigation except as indicated in Cr.P. C., the question as
to applicability of a particular provision is required to be
F left to the discretion of the investigating agency and then
to the Court as and when and if the report under Section 173
of Cr.P. C. is filed."
11. In the present appeals, the appellants have largely reiterated
the stand taken in the proceedings before the Magistrate and the High
G Court, wherefrom the present appeals have arisen. 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
H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 797
[A. M. KHANWILKAR, J.]
FIR. Further, the seized accounts have nothing to do with the subject A
matter of the FIR. CJP Trust has no concern with the appeal made by
the Sabrang Trust on its website. The donations were invited by Sabrang
Trust to be deposited in its account displayed on the website. Notably,
the grants/donations made by the donors for executing specific projects
and the amounts were and still are supposed to be spent in accordance
B
with the agreements. The donors are private parties and none of them
has complained about the embezzlement of their funds. The donors have
been furnished with relevant information and accounts concerning their
donations. In the written submissions filed by the appellants it is submitted
that the provisions of law sought to be invoked against the appellants
and the transactions in question must ne"Cessarily result in commission of C
some offence by the appellants so as to invoke Section l 02 of the Code;
whereas keeping in mind the ingredients of Sections 405 & 406, there is
nothing to indicate that the said offence is made out against the appellants.
Only that private person who has contributed can be heard to make
grievance about entrustment and criminal breach of trust. Not even one D
donor has come forward to make such grievance. Similarly, the
ingredients of offence of cheating specified in Section 415 to be an
offence under Section 420, required dishonest or fraudulent inducement
of any person to deliver any property to the accused. None of the donors
have come forward to make grievance in that behalf. It is submitted that
it is well settled that if the property is not suspected of commission of E
offence, it cannot be seized under Section 102 of the Code. For, the
police officer can seize only such property which may be alleged or
suspected to have been alleged in the commission of offence. Reliance
has been placed on M.T. Enrica Lexie and Anr. v. Doramma an'd
Ors. 1 and Sri Jaye11dra Saraswathy Swamigal (II), T.N. v. State of F
T.N. and Ors. 3 to contend that in the absence of due procedure as
specified by Section l 02 of the Code, seizure of bank accounts would be
illegal and more so, when it has been done to stifle all the activities of the
Trust. The cowisel for the appellants, during the course of argument,
had invited our attention to various documents and also explained the
entries relied upon by the respondents, which according to the appellants G
was a tenuous plea to link the stated bank accounts with the crime
under investigation. Details have been given in the written submission as
to how the entries in the books of accounts have been distorted and
misread by the respondents.
'(2012) 6 sec 160
'(2005) s sec 111 H
798 SUPREME COURT REPORTS (2017] 12 S.C.R.
A 12. The respondents, on the other hand, submit 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
B 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 High Court had elaborately analysed the material on record while
considering the prayer for grant of anticipatory bail of the private
appellants and prima facie found substance in the allegations against the
C appellants of misuse offunds received by them through various donors
and that the appellants were not ready and willing to cooperate with the
investigation. The respondents would submit that since the investigation
is in progress and the material already gathered throws up circumstances
which create suspicion of the commission of the alleged offence,
D therefore it is imperative to continue the seizure ofbank accounts until it
is necessary and till the completion of the investigation. If the Investigating
Officer eventually finds that the accounts are not tainted with the crime,
he would not hesitate to defreeze the same or to exclude the untainted
amounts.
13. We have heard Mr. Kapil Sibal, learned senior counsel along
E with Ms. Aparna Bhat, appearing for the appellants and Mr. Tushar
Mehta, learned Additional Solicitor General along with Mr.Ajay Chokshi,
appearing for the State of Gujarat.
14. The sweep and applicability of Section 102 of the Code is no
more res integra. That question has been directly considered and
F answered in the case of State of Maltaraslttra v. Tapas D. Neogy. 4
The Court examined the question whether the police officer investigating
any offence can issue prohibitory orders in respect of bank accounts in
exercise of power under Section 102 of the Code. The High Court, in
that case, after analysing the provisions of Section 102 of the Code had
G opined that bank account of the accused orofany relation of the accused
cannot be held to be "property" within the meaning of Section 102 of the
Code. Therefore, the Investigating Officer will have no power to seize
bank accounts or to issue any prohibitory order prohibiting the operation
• (1999) 1sec685
H
TEES1~.\ ATUL SETALVAD v. THE STATE OF GUJARAT 799
[A. M. KHANWILKAR, J.]
of the bank account. This Court noted that there were conflicting decis10ns A
of difforent High Courts on this aspect and as the question was semmal,
it chose to answi.:r the same. In paragraph 6, this Court noted thus:
··A plain reading of sub-section ( 1) of Section 102 indicates
that the Police Officer has the power to sei::.e any property
which may be found under circumstances creating suspicion 13
ol the commission of any of(e11ce. The legislature having used
the expression 'any property' and 'any offence' have made
the applicability of the provisions wide enough to cover
ojj'ence.1 created under any Ac!. But the two prPconditions
jiJr applicability of Section 102(1) are that it must he 'propertv'
and seco11dlv, i11 respect of the said proper~v there must have c
heen suspicion ol commission of any offence. In this Fiew of
the matter the two further questions that arise for
consideration are whether the hank account of an accused
or of his relation can he said to be 'property• within the
meaning o/sub-section (I) o/Section 102 <1/ the ():PC. and D
secondly, whether circumstances exist. creating s11.1picion. of
commission of any offence in relation to the same ...... ..... "
15. After analysing the decisions of different High Courts, this
Cou1t in paragraph 12, expounded the legal position thus:
"/laving considered the divergent views taken by different E
High Courts with regard to the power <~/seizure under Section
102 of the Code of Criminal Procedure, and whether the bank
account can be held to he jJroperly' within the meaning of
the said Section 102(1), we see no justification to give any
narrow interpretation to the provisions of the Criminal F
Procedure Code. It is well known that corruption in public
ojftces has become so rampant that .it has become dijjicu/t to
cope up with the same. Then again the time consumed by the
Co11rls in concluding the trials is <1110/her factor which should
be borne in mind in interpreting the provisions of Section
I 02 of the Criminal Procedure Code and the underlying o/Jject G
engrajied therein. inasmuch as if there can be no order of
seizure of the bank account of the accused then the entire
money deposited in a bank which is ultimately held in the
trial to he the 011/come of the illegal gralification, could be
withdrawn by the accused and the Courts would be powerless H
800 SUPREME COURT REPORTS [2017) 12 S.C.R.
A to get the said money which has any direct link with the
commission of the offence committed by the accused as a
public officer. We are, therefore, persuaded to take the view
that the bank account of the accused or any of his relations
is property' within the meaning of Section 102 of the Criminal
Procedure Code and a police officer in course of investigation
B
can seize or prohibit the operation of the said account if such
assets have direct links with the commission of the offence
for which the police officer is investigating into.
xxx xxx xxx xxx xxx
c ln the aforesaid premises, we have no hesitation to come to
the conclusion that the High Court of Bombay committed error
in holding that the police officer could not have seized the
bank account or could not have issued any direction to the
bank ojj/cer, prohibiting the account of the accused from
being operated upon. "
D
16. After this decision, there is no room to countenance the
challenge to the action of seizure of bank account of any person which
may be found under circumstances creating suspicion of the commission
of any offence.
E 17. 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 Tcesta 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
F 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 circtunstances emerging from the transactions done from these
bank accounts which create suspicion of the commission ofan offence.
It is on that belief he has exercised his discretion to issue directions to
G seize the bank accounts pertaining to CJP Trust.
I 8. 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 21 ''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
H
TEESTA ATUL SETALVAD v. THE STATE OF GUJARAT 801
[A. M. KHANWILKAR, J.]
seizure ofhis bank account. The Magistrate after noticing that the principle A
stated by the Division Bench of the Bombay High Court in the case of
Dr. Shashikant D. Kamik v. State ofMalrarashtra 5 has been overruled
in terms of the Full Bench Judgment of the Bombay High Court in the
case of Vi11osk11nwr Ramacha11dra11 '11/111var (supra), rightly negatived
that contention. The Full Bench of the Bombay High Court has expounded
B
that Section 102 does not require issuance of notice to a person before
or simultaneously with th.: action attaching his bank account. In the case
of Adarsll Co-operative Ho11si11g Society Limited v. Union of India
& Ors. 6, the Division Bench of the Bombay High Court once again
considered the issue and rejected the argument that prior notice to the
account holder was required to be given before seizure of his bank c
account. It also noted that the bank account need not be only of the
accused but it can be any account creating suspicion about the commission
of an offence. The view so taken commends us.
19. Jn the case of Sri Jaye11drt1 Sarttsivathy Sivm11igal (supra),
the Court while considering a transfer petition under Section 406 of the D
Code, seeking transfer of the case pending before the Principal Sessions
Court, Chenglepet, to any other State outside the State of Tamil Nadu,
adverted to the circumstance of a motivated order passed under Section
102 of the Code for freezing of 183 bank accow1ts of the Mutt on the
ground that the head of tile Mutt was involved in a murder case. In that
context, it observed that the power vested under Section 102 of the E
Code cannot be stretched to irrelevant matters, to extremes and to a
breaking point. The power must be exercised cautiously, failing which,
the discretion exercised by the authority would be tainted with
arbitrariness. In paragraph 23, the Court observed thus:
.. ... Again, the action of the State in directing the banks to F
freeze all the 183 accounts of the Mutt in the purported
exercise of the power conferred under Section 102 CrPC,
which had affected the entire activities of the Mutt and other
associated trusts and endowments only on the ground that
the petitioner, who is the head of the Mutt, has been charge- G
sheeted for entering into a conspiracy to murder
Sankararaman, leads to an inference that the State machinery
is not only interested in securing conviction of the petitioner
'(2008) Cri.L.J. 148 (Born.)
6
(2012) Cri.L.J. 520 (Born.)
H
802 SUPREME COURT REPORTS [2017] 12 S.C.R.
A and the other co-accused but also to bring to a complete halt
the entire religious and other activities of the various tmsts
and endowments and the performance oj"pooja and other
ritllals in the temples and religious places in accordance with
the custom and traditions and thereby create a fear psychosis
in the minds of the people. This may deter anyone from
B
appearing in Court and give evidence in defence of the
accused ... ..... "
The Cout1 did not lay down as a proposition that it is impermissible
to freeze multiple bank accounts, even though circumstances emanating
from the nature of transactions effected from the concerned bank
c accounts and the conduct of the account holders created suspicion of
the commission ofan offence. The Court while directing lifting of seizw·c
of bank accounts had noted that the Mutt could not be paralysed by
freezing of all its bank accounts in the guise of a direction issued under
Section l 02 of the Code. Further, the continuation of the seizure of all
- D the bank accounts even after completion of the investigation of the case
and filing of charge-sheet was unwarranted.
20. In the case of M. T. Eurica Lexie (supni), the Court noted in
paragraph 7 that agencies had completed their respective investigations
and vessel was seized in exercise of power under Section I 02 of the
E Code. In Para 16, the Court noted the concession given by the counsel
for the Government that the vessel was not the object of the crime or
the circumstances which came up in the course of investigation that
create suspicion of the commission of any offence. Jn that case, it was
alleged that while the fishing boat was sailing through the Arabian Sea,
indiscriminate firing was opened from the vessel in question, as a result
F of which two innocent fishermen who were on board, died. The Counsel
for the State had also conceded that the vessel was no longer required in
connection with the offence in question. Indeed, in paragraph 14, the
Court made the following observations:-
"14. The police officer in course of investigation can seize
G any property under Section 102 if such property is alleged to
be stolen or is suspected to be stolen or is the o~ject of' the
crime under investigation or has direct link with the
commission of offence for which the police officer is
investigating into. A property not suspected ·of commission
H of the ojJ'ence which is being investigated into by the police·
TEESTAATUL SETALVAD v. THE STATE OF GUJARAT 803
[A. M. KHANWILKAR, J.]
officer cannot be seized. Under Section 102 of the Code, the A
police officer can seize such property which is covered by
Sectwn 102(1) and no ot/1e1:"
These observations are in no way different from the proposition
expounded in the case of Tapas D. Neogy (supra).
21. Keeping these principles m mind and the material on record, it B
is noticed that the prosecution has alleged that the two Trusts are run by
the private appellants and other accused. They were actively involved in
collecting huge funds as donation in the name of providing legal assistance
to the 2002 Gujarat Riot Victims. Such donations received by the two
Tmsts had never reached the victims, the members of the Gulberg Society c
in respect of which grievance has been made in the subject FIR. Further,
substantial discrepancies have been noticed from the bank accounts,
copies of audited account statements and Balance Sheet. The final
account did not tally with the accounts, as submitted. The appellants did
not offer credible explanation in that regard, much less satisfactory.
According to the respondents, the conduct of the appellants of non- D
cooperation during the investigation strengthens the suspicion of the
commission of an offence. They provided incorrect information. Itis
also a case of non-disclosure and suppression of material facts. These
circumstances create suspicion of the commission of offence under
investigation. It is alleged by the respondents that the appellants E
deliberately and intentionally did not disclose that they'have already
opened new accounts and transferred huge sums of money after knowing
that stated bank accounts of the appellants were seized on 21.01.2014
by the investigating agency. The details of the two newly opened accounts
were not forthcoming. Further, in the proceedings filed before different
Courts. incorrect pica has been taken by the appellants, suggestive of F
the fact that their accounts were not compliant and duly scrutinized by
the Competent Authority.
22. Suffice it to observe that as the Investigating Officer was in
possession of materials pointing out circumstances which create suspicion
of the commission ofan offence, in particular, the one under investigation G
and he having exercised powers under Section I 02 of the Code, which
he could, in law, therefore. could legitimately seize the bank accounts of
the appellants after following the procedure prescribed in sub-Section
(2) and sub-Section (3) of the same provision. As aforementioned, the
Investigating Officer after issuing instructions to seize the stated bank
H
804 SUPREME COURT REPORTS [2017) 12 S.C.R.
A accounts of the appellants submitted report to the Magistrate concerned
and thus complied with the requirement of sub-Section (3).
23. Although both sides have adverted to statement of accounts
and vouchers to buttress their respective submissions, we do not deem it
necessary nor think it appropriate to analyse the same while considering
B the matter on hand which emanates from an application preferred by
the appellants to de-freeze the stated bank accounts pending investigation
of the case. Indisputably, the investigation is still in progress. The
appellants will have to explain their position to the investigating agency
and after investigation is complete, the matter can proceed further
depending on the material gathered dming the investigation. The suspicion
c entertained by the investigating agency as to how the appellants
appropriated huge funds, which in fact were meant to be disbursed to
the unfortunate victims of 2002 riots will have to be explained by the
appellants. Further, once the investigation is complete and police report
is submitted to the concerned Court, it would be open to the appellants to
D apply for de-freezing of the bank accounts and persuade the concerned
Court that the said bank accounts are no more necessary for the purpose
of investigation, as provided in sub-Section (3) of Section 102 of the
Code. It will be open to the concerned Court to consider that request in
accordance with law after hearing the investigating agency, including to
impose conditions as may be warranted in the fact situation of the case.
E
24. 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.
F 25. 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.
G
26. Accordingly, these appeals ate dismissed.
Ankit Gyan Appeals dismissed.
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