A. Ponnuswamy vs State and Another

Arunachalam, J.—This petition u/s 482 Code of Criminal Procedure, has been filed to direct return of the amount in the credit of the Petitioner, in Saving Bank Account No. 5328 of the State Bank of India (2nd Respondent) alleged to be concerned in Cr. No. 425/87 on the file of the first Respondent, as and when demanded by him in the interests of justice.

For the disposal of this petition a few facts may have to be stated: The Petitioner is a constituent of the second Respondent bank for over ten years and is operating a Savings Bank account numbered as 5328. The Petitioner, who appears to be a contractor by profession, owns lands and buildings, besides other assets. In Cr. No. 425/87 registered by the first Respondent for offences u/s 3, 4 and 6 of the prize chits and Money Circulation Schemes (Banning) Act of 1978, Muthu Saravanan, the son of the Petitioner and three others are said to be involved. The Petitioner is not an accused in this crime. The investigating agency appear to have entertained a suspicion that a sum of Rs. 2,12,000/- lying in the credit of the Petitioner may have been deposited by Muthu Saravanan in the former''s account. It is the prosecution case that on 20-11-1987 a sum of Rs. 1,65,863/- and on 25-11-1987 a sum of Rs. 46,100/- had been deposited in the Petitioner''s account by Muthu Saravanan.

In or about June, 1988, in the usual course of banking operation when the Petitioner approached the second Respondent for withdrawal, he was intimated that by a letter dated 30-11-1987 the first Respondent had directed impounding of the bank account and hence operation of the account by the Petitioner was not possible. Later the Petitioner asked for further information from the second Respondent, which appears to have been furnished rather belatedly.

Mr. S. Pichai, learned Counsel for the Petitioner contends that the alleged prohibitory order issued by the first Respondent impounding the bank account of the Petitioner, has no sanction in law and if at all the amount in the bank is concerned in the crime, appropriate directions must have been obtained from a competent court after due notice to the Petitioner. He would also contend that a perusal of both the chalans will indicate patent difference in the signature of the depositor. According to learned Counsel, the provisions of Section 102 Code of Criminal Procedure, are not applicable to freeze the bank account, on the facts unfurled. He has referred to certain provisions of the Banking Regulation Act, income tax Act, Criminal Law Amendment ordinance and the Banker''s Books Evidence Act apart from the following decisions:

Bharath Overseas Bank v. Minu Publication 1988 L.W. (Crl.) 55 .

Swaran Sabharwal v. Commissioner of Police 1988 Cri.L.J. 241.

Menon, K.P. v. N. Punithavathi Manian 1987 L.W. (Crl.) 55 .

4 In Re: Lloyds Bank Limited,

Textile Traders Syndicate Ltd., Bulandshahr Vs. The State of U.P. and Others,

Babulal Agarwalla Vs. Province of Orissa and Others,

Praful Kumar Deb v. Suresh Chandra Deb AIR 1952 Ass 27

which either support or take a contra view to the proposition propounded by him, on the scope of Section 102, Code of Criminal Procedure.

The first Respondent has filed a counter stating that Cr. No. 425/87 had been registered against the Petitioner''s son Muthu Saravanan, who is the second accused and three others, for having cheated the public to the tune of nearly Rs. 10,00,000/- the total number of persons cheated being approximately 1709, The crime has been registered for offences under Sections 3, 4 and 6 of the prize Chits and Money Circulating Scheme (Banning) Act. The Petitioner''s son, who is the second accused, has deposited totally Rs. 2,12,000/- on two different dales as stated earlier, in the account of the Petitioner, and the sums so deposited in the Petitioner''s account are the case properly, which have to be marked as Material Objects during trial. A further averment is made in the counter that a perusal of the Petitioner''s pass book would show that such huge sums had never been deposited earlier in that account. The investigation is still pending and the final report will be filed in due course after which these material objects will have to be produced during trial. Mr. T. Munirathinam Naidu, learned Government Advocate while reiterating the contentions put forth in the counter submits that the police have powers u/s 102 Code of Criminal Procedure, to do what they have done in this case, and this petition is liable to be dismissed, devoid of merits.

I have heard Mr. K. Sampath, learned Advocate appearing for the second Respondent, the State Bank of India, who after producing before me the chalans referable to these two payments, stated that the bank would abide by the orders passed by this Court.

Learned Government Advocate would then refer to Bharath Overseas Bank v. Minu Publication 1988 I.W. (Crl.) (Sic) wherein Padmini Jusudurai, J., in some what similar circumstances, had taken the view that money in bank account is property within Section 102 Code of Criminal Procedure which could be seized by prohibiting the holder of the account from operating it, and contend that the impounding of the Petitioner''s account was perfectly in order. Per contra, Mr. S. Pichai, learned Counsel for the Petitioner contends that the view taken by Padmini Jesudurai, J., may require reconsideration in the light of certain decisions of other High courts and enactments which had not been brought to her notice, apart from the inherent impossibility of invoking the provisions of Section 102, Code of Criminal Procedure, for the freezing or impounding of bank account. Learned Counsel for the Petitioner is prepared to concede that money in the bank may be ''property'' but would reiterate that it cannot be impounded by the first Respondent u/s 102 Code of Criminal Procedure.

Section 102 Code of Criminal Procedure, reads as under:

Power of Police Officer to seize certain property - (1) 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 of a police station, shall forthwith report the seizure to that officer.

(3) Every police officer acting under Sub-section(1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking 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.

The prosecution case is that monies had been deposited by Muthu Saravanan, one of the accused in Cr. No. 425/87, in the account of the Petitioner, his father, referable to S.B. Account No. 5328 operated in the bank of the second Respondent. The impounding of the monies deposited in the bank is sought to be justified as amounting to seizure, falling within the scope of Section 102 Code of Criminal Procedure. It is conceded by counsel on either side that this property will not come within the category of ''alleged or suspected to have been stolen''. However, the emphasis by the prosecution is on the second limb that this property had been found under circumstances which create suspicion of the commission of any offence. It is apparent that to justify action u/s 102 Code of Criminal Procedure, the property must be found under circumstances which create suspicion of the commission of any offence. In other words, it will apply to cases where a police officer comes across certain property, in such circumstances, which create in his mind suspicion that an offence has been committed. the cases which may fall under this category in the light of decisions rendered, where action u/s 102 Code of Criminal Procedure, could be upheld, would be (a) where, a public servant is found in possession of monies in his bank account far in excess of his known sources of income, (b) when a person is found in possession of large quantities of small coins for sale in contravention of Defence of India Rules, (c) where a trader was found to have stored a large number of bags of rice in contravention of rules and orders, (d) where a person was found standing on a public road with a bag containing several bundles of currency notes, (e) when a police officer suspects an offence having been committed in respect of certain logs of wood which had been consigned by rail, and similar such cases which may not be possible to be exhaustively catalogued. These categories of cases wherein the police officer finds, possession, the position is bound to be different. Hence, on the facts of this case it is not the discovery of the properly that has created the suspicion of the commission of an offence. There are no circumstances attendant upon the bank account or its operation that have led the first Respondent to suspect that some offence has been committed somewhere. The discovery of the Bank account here, in a sequel to the discovery of the commission of the offence. The investigating agency suspect, that in view of the statement of the Petitioner''s son, some of the ill-gotten wealth might have been passed on to the Petitioner''s account by his son. This, to my mind, is not sufficient to attract Section 102, Code of Criminal Procedure, for, the bank account had not been traced or discovered in circumstances which had made the first Respondent aware of the commission of an offence.

It may also be further pointed out that all that the first Respondent desires to do is to establish from this account that some funds have been transferred by the Petitioner''s son to the Petitioner. This can be proved at any time by producing the account and the entries made therein, since they are always available. No purpose seems to be served by restraining the operation of the bank account. A mere statement in the counter that the sums in the Petitioner''s account are case property, do not appear to permit action u/s 102, Code of Criminal Procedure, for the commission of an offence was known even earlier to the discovery of this Bank account.

The word ''seizure'' in Section 102, Code of Criminal Procedure, appears to have been used connoting the ordinary dictionary meaning of taking actual physical possession of movable property. This Section does not appear to contemplate a police officer prohibiting the payment of a debt by a debtor, to the creditor. As long as the money was in the possession of Muthu Saravanan and was capable of seizure it might have been open for the police officer to seize the same on the ground that it either was or was suspected to be stolen property, but, once it passed into the hands of the Bank, the money became unidentifiable and there can be no question of its being impounded by a police officer, u/s 102, Code of Criminal Procedure.

A reference to some of the other provisions of the Criminal Procedure Code may also be useful. Section 82(3), Code of Criminal Procedure, which provides for attachment of a debt or other property prescribes seizure in Clause (a). The appointment of a receiver to attach, forms part of Clause (b). An order in writing prohibiting delivery of certain property to the proclaimed person or to any one on his behalf forms the subject matter of Clause (c) and Sub-clause (d) relates to all or any two of such methods as the Court in its discretion may think fit. It seems that the first method has been used with reference to movable property whereas the second and third methods have been used with reference to a debt or other immovable properties which are not capable of actual seizure. Section 83(4) Code of Criminal Procedure, applies to immovable properly. However, in Section 83(4)(a) the word used is not ''seizure'' but is ''taking possession''. It, therefore, prima facie appears that where a property concerned was movable property of which actual physical possession could be taken, the word ''seizure'' has been used and when it related to immovable property the words ''taking possession'' has been employed. Similarly Section 100(5), Code of Criminal Procedure, refers to a list of things seized though Sub-clause (7) thereto refers to a list of all things ''taken possession of''. Though it appears that u/s 100, Code of Criminal Procedure, both these words ''seized'' and taken possession of have been used in the same sense. It cannot be overlooked that the provisions, relate to search of closed places. To my mind it appears that the word ''seized'' has been used in Section 102, Code of Criminal Procedure in the sense of ''taking hold of to clutch or grasp. This can mean, only the act of taking actual physical possession of the property, capable of being so possessed. Impounding of the bank account presumably with a view to pass some order regarding the bank deposit, either as an interim measure or at the conclusion of the proceedings does not appear to be covered by the provisions of Section 102, Code of Criminal Procedure. Even at the conclusion of the trial the monies may have to be returned to the Bank, since the bank is bound as a debtor to answer the claims of the Petitioner. The very same monies said to have been deposited on two different dates in the account of the Petitioner is not the property involved in the crime but what is sought to be impounded is a part of the assets of the Bank. The framers of the Code were conscious of the difference between seizure, taking possession, attach or prohibit delivery.

Section 45ZB of the Banking Regulation Act, 1949 runs thus:

Notice of the claims of other persons regarding deposits not receivable--No notice of the claim of any person, other than the person or persons in whose name a deposit is held by a banking company, shall be receivable by the banking company, nor shall the banking company be bound by any such notice even though expressly given to it;

Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such deposit is produced before a banking company, the banking company shall take due note of such decree, order, certificate or other authority.

Similarly Sections 5 and 6 of the Bankers'' Books Evidence Act, 1891 runs as follows:

Cases in which officer of bank not compellable to produce books--No officer of a bank shall in any legal proceeding to which the bank is not a party be compellable to produce any banker''s book the contents of which can be proved under this Act, or to appear as a witness to prove the matters, transactions and accounts therein recorded, unless by order of the court or a Judge made for special cause.

Inspection of books by order of Court or Judge 1. On the application of any party to a legal proceeding the court or a Judge may order that such party be at liberty to inspect and take copies of any entries in a banker''s book for any of the purposes of such proceeding, or may order the bank to prepare and produce, within a time to be specified in the order, certified copies of all such entries, accompanied by a further certificate that no other entries are to be found in the books of the bank relevant to the matters in issue in such proceeding, and such further certificate shall be dated and subscribed in manner herein before directed in reference to certified copies.

An order under this or the proceeding section may be made either with or without summoning the bank and shall be served on the bank three year days (exclusive of bank holidays) before the same is to be obeyed, unless the Court or Judge shall otherwise direct.

The bank may at any time before the time limited for obedience to any "such order as aforesaid either offer to produce their books at the trial or give notice of their intention to show cause against such order, and thereupon the same shall not be enforced without further order.

These provisions deal with the bank''s duty to its customers and claims of other persons viz-a-vis court proceedings. Further, the Criminal Law Amendment Ordinance 38 of 1944 was promulgated with a view to prevent disposal or concealment of money or other property procured by means of certain offences.

The scheduled offences which form part of this Ordinance are punishable under Sections 161, 165, 406, 408, 409, 411, 414, 417 and 420, I.P.C., and u/s 5 of the Prevention of Corruption Act, 1947. This Ordinance contains various provisions for obtaining an order of attachment of property and also provides for the remedy open to the persons aggrieve by such attachment. This Ordinance was mainly intended to protect Government money and property believed to have been obtained by the persons against whom cases are brought either of embezzling the Government money or property, or being in possession of stolen Government property or of obtaining Government property by false pretences. Only the offence relating to bribery did not relate to money or property actually belonging to the Government, but, even there, the object was to secure the money or property improperly obtained by a Government servant as inducement for showing official favour. If the provisions u/s 102, Code of Criminal Procedure, were sufficient to seize those monies, there was no need for an Ordinance of this kind. Similarly the provisions of Section 226 of the income tax Act relating to attachment of a debt, affirms my view that Section 102, Code of Criminal Procedure does not take into its fold, impounding or prohibiting the withdrawal of bank accounts, as done in this case.

Padmini Jesudurai, J., has approached this question of the power u/s 102, Code of Criminal Procedure, with reference to Sections 451, 452, 453, 455 and 456, Code of Criminal Procedure, an the light of her holding that the correct position of law was reflected by the judgment of the Division Bench of the Punjab High Court rendered in Gurucharan Singh v. State of Punjab 1978 80 P&H L.R. 514. The Punjab case dealt with an offence u/s 5(1)(e) of the Prevention of Corruption Act, to which the provisions of the Criminal Law Amendment Ordinance; would squarely apply. Regarding money in a bank account being property apart from there being no dispute in this case, I agree that it will be ''property'' especially after the authoritative enunciation of the law by the Supreme Court in R.K. Dalmia Vs. Delhi Administration, . However, I am not able to readily agree that the seizure contemplated u/s 102, Code of Criminal Procedure, and the freezing of the bank balance following a prohibitory order, are the same. The physical removal of the movable property which will be attracted by the provisions of Section 102, Code of Criminal Procedure, may have to be distinguished from impounding or freezing which, to my mind, are not sanctioned by the provisions of the said section. The answer that Section 453, Code of Criminal Procedure, provides for limited reimbursement to bona fide persons does not, to my mind, enlarge the scope of Section 102, Code of Criminal Procedure. The use of words "property regarding which an offence appears to have bee committed or which appears to have been used for the commission of any offence" in Sections 451 and 452, Code of Criminal Procedure, would not permit recourse to Section 102, Code of Criminal Procedure, on the facts unfurled in this case. This property had not been used for the commission of any offence and this property was not found under circumstances which created suspicion of the commission of any offence. The first limb of Section 102, Code of Criminal Procedure, relating to property alleged or suspected to have been stolen, presents no difficulty and read with Section 452(5), Code of Criminal Procedure, includes converted or exchanged property as well.

I am not adverting to the merits regarding the difference in signature in the chalans at its juncture, for the scope of power u/s 102, Code of Criminal Procedure, is the crux of attack in this petition. With respect, I am unable to agree with the view expressed by Padmini Jesudurai, J., that Section 102, Code of Criminal Procedure, will take in its fold impounding of the bank account since on facts, it is not the discovery of the property that has created a suspicion of the commission of any offence. Further the plea of ab inconvenienti though attractive at the first blush may have to be received with caution in the construction of statutes unless there is some evident ambiguity. The possibility that any person who obtained monies by criminal offence can convert the same into different currency and deposit them in a bank in the account of some body else and still can escape the clutches of law, if freezing will not be feasible u/s 102, Code of Criminal Procedure, cannot, to my mind, be placid as an argument when powers therefor are not provided u/s 102, Code of Criminal Procedure, Civil remedies prima facie appear to be open. There appears to be a lacuna for, even the accounts of innocent people who may not at all be connected with the offence can be impounded even without notice to them with no effective remedy available to them till probably the whole trial is concluded.

The questions involved are bound to arise often, and hence the need for a binding enunciation of law by a Division Bench is imminent. The papers may be placed before My Lord the officiting Chief Justice for referring this matter to a Division Bench for a decision on the following questions:

Are the provisions of Section 102, Code of Criminal Procedure, attracted when the creation of suspicion of the commission of an offence, was not on the discovery of the property, was a sequel to the discovery of the commission of an offence (on facts the commission of the offence was known much earlier to the discovery of the Bank account)?

Do the words "seizure" used in Section 102, Code of Criminal Procedure, take in its fold "impounding, freezing or prohibition of operation of a Bank account'', when the Code has used the words "seize", "take possession", "attach" or "prohibit delivery" in various other sections depending on the context? what bearing will the provisions of other enactments have in construing the scope of Section 102, Code of Criminal Procedure?

Do the provisions of Chapter 34 of the Code of Criminal Procedure relating to disposal of property, enlarge the scope of Section 102, Code of Criminal Procedure?

Pursuant to the above Order of Reference made by Arunachalam, J. dated 16th March, 1989, this matter coming up before the above Division Bench, the following judgment was delivered by Sivasubramaniam, J. on 6.4.1990.

ORDER: Sivasubramaniam, J.—This petition is coming before us on a reference made by Arunachalam, J. It has been filed invoking the jurisdiction of this Court u/s 82, Code of Criminal Procedure to direct return of the amount in the credit of the Petitioner in Savings Bank Account No. 5328 with the the State of India, the second Respondent herein, alleged to be concerned in Cr. No. 425 of 1987 on the file of the first Respondent on his demand.

The facts set out in the petition in brief are as follows: The Petitioner is a constituent of the second Respondent Bank for over ten years and he is operating Savings Bank Account No. 5328. The Petitioner is a contractor by profession and he owns agricultural lands and buildings apart from other assets. In Cr. No. 425 of 1987 registered by the first Respondent for offences under Sections 3, 4 and 6 of the prize Chits and Money Circulation Scheme (Banning) Act, 1978, Muthu Saravanan, the son of the Petitioner and three others are said to be involved. The Petitioner is not the accused in the said case. The investigating Officer appears to have entertained a suspicion that the amount lying in the credit of the Petitioner has been deposited by Muthu Saravanan and credited into the Petitioner''s account. When the Petitioner approached the second Respondent for drawing some money in June, 1988, he was informed by the second Respondent that the first Respondent has directed him by a letter dated 30.11.1987 to keep the amount in the Bank itself until the disposal of the criminal case. Pursuant to the said letter dated 30.11.1987, the second Respondent addressed a letter dated 25-6-1988 to the Petitioner stating that his Bank account has been impounded by the first Respondent and, therefore, his Bank account cannot be operated until the prohibitory order is lifted. In these circumstances, the Petitioner has filed the present petition to direct return of the amounts lying in the credit of the Petitioner with the second Respondent, on demand.

In the petition, the Petitioner has raised the contention that the said prohibitory order issued by the first Respondent has no authority of law and the proper procedure is to approach the competent Court for appropriate directions under the Code of Criminal procedure. Further, it is contended that there has been non-observance of the mandatory provisions of the Code of criminal procedure and as such the retention of the funds in the hands of the second Respondent is illegal and without legal sanction.

The first Respondent has filed a counter stating that a case has been registered in cr. No. 425 of 1987 against the Petitioner''s son Muthusaravanan and others for offences under Sections 3, 6 and 4 of the prize Chits and Money circulating Schemes (Banning) Act, 1978 for having cheated the public to the tune of nearly Rs. 10/- lakhs and the persons cheated in this case are nearly 1709, in numbers. The Petitioner''s, son, who is the second accused, deposited in the account a total sum of Rs. 2,12,000/- on two different dates and the amounts so deposited are the case property which have to be marked as material objects in the criminal case during trial. It is further stated that a perusal of the Petitioner''s pass Book would show that such huge amounts had never been deposited earlier in that account and that investigation is still pending and the final report is to be filed in due course after which these material objects will have to be produced before the Court.

This matter came up before Arunachalam, J., for hearing. At that time, it was contended on behalf of the Petitioner that the alleged prohibitory order issued by the first Respondent impounding the Bank account of the Petitioner has no sanction in law and if at all the amount in the Bank is concerned in the crime, appropriate directions must have been obtained from a competent Court, after due notice to the Petitioner. Further, the provisions of Section 102, Code of Criminal Procedure are not applicable to freeze the Bank account. Reference was made to certain provisions of the Banking Regulation Act, income tax Act, Criminal Law Amendment Ordinance and the Banker''s Books Evidence Act. Reliance was also placed on several authorities on the scope of Section 102, Code of Criminal Procedure taking the view that such a power is not available to an investigating officer. On behalf of the state, reliance was placed on the decision of Padmini Jesudurai, J. in Bharat Overseas Bank v. Minu Publications 1988 L.W. (Crl.) 106 wherein the learned Judge took the view that money in Bank account is property within Section 102, Code of Criminal Procedure which could be seized by prohibiting the holder of the account from operating it. On this basis, it was argued that the impounding of the Petitioner''s account was perfectly in order. On behalf of the Petitioner, it was contended that the view taken by Padmini Jesudurai, J., may require reconsideration in the light of certain decisions of other High Courts and enactments which had been brought to her notice, apart from the inherent impossibility of invoking the provisions of Section 102, Code of Criminal Procedure for the freezing of the Petitioner''s Bank account. It was conceded by the learned Counsel for the Petitioner before Arunachalam, J., that money in the Bank may be ''property''. But it was contended that it cannot be impounded by the first Respondent u/s 102, Code of Criminal Procedure.

Arunachalam, J., elaborately considered the various provisions contained in the criminal Procedure Code and other Acts. Specific reference was made to Section 45ZB of the Banking Regulation Act, 1949 and the Criminal Law Amendment Ordinance of 1944. As there were specific provisions for seizure and taking possession of the properties under other provisions of the Criminal Procedure Code and other Acts, the learned Judge took the view that if the provisions u/s 102, Code of Criminal Procedure were sufficient to seize the properties including moneys, there was no need for an ordinance of this kind. As there were specific provisions u/s 226 of the income tax Act and Section 82(3) of the Criminal Procedure Code for attachment of a debt, the learned Judge was of the view that Section 102, Code of Criminal Procedure does not take into its fold, impounding or prohibiting the withdrawal of Bank accounts as done in this case. Further on a very careful analysis of the provisions of law and the view expressed by Padmini Jesudurai, J., the learned Judge proceeded to consider the scope of Section 102, Code of Criminal Procedure. He came to the conclusion that the word ''seizure'' in Section 102, Code of Criminal Procedure appears to have been used connoting the ordinary dictionary meaning of taking actual physical possession of movable property and it does not appear to contemplate a police officer prohibiting the payment of a debt by a debtor, to the creditor. Further as long as the money was in the possession of Muthu Saravanan and was capable of seizure, it might have been open for the police officer to seize the same on the ground that either it was stolen property or was suspected to be stolen property, but, once it passed into the hands of the Bank, the money became unidentifiable and there can be no question of its being impounded by a police officer, u/s 102, Code of Criminal Procedure with reference to the language of Section 102, Code of Criminal Procedure it was conceded by counsel on either side that this property will not come within the category of ''alleged or suspected to have been stolen''. However, emphasis was made by the prosecution on the second limb that this property had been found under circumstances which create suspicion of the commission of any offence. On this basis, the learned Judge was of the view that to justify action u/s 102, Code of Criminal Procedure, the property must be found under circumstances which create suspicion of the commission of any offence. In other words, it will apply to cases where a police officer comes across certain property, in such circumstances which creates in his mind suspicion that an offence has been committed. On the facts of the present case, the learned judge found that the discovery of the Bank account here, is a sequel to the discovery of the commission of the offence and that it is not the discovery of the property that has created the suspicion of the commission of an offence. The investigating agency suspect, that in view of the statement of the Petitioner''s son, some of the ill-gotten wealth might have been passed on to the Petitioner''s account by his son and this, according to the opinion of the learned Judge, is not sufficient to attract Section 102, Code of Criminal Procedure as the bank account had not been traced or discovered in circumstances which had made the first Respondent aware of the commission of an offence. The learned Judge further found that the first limb of Section 102, Code of Criminal Procedure relating to the property allied or suspected to have been stolen, presents no difficulty and read with Section 452(5), Code of Criminal Procedure, it includes converted or exchanged property as well. After an elaborate discussion, the learned Judge found it difficult to accept the view expressed by Padmini Jesudurai, J., According to the learned Judge the possibility that any person who obtained monies by criminal offence can convert the same into different currency and deposit them in a Bank in the account of somebody else and still can escape the clutches of law, if freezing will not be feasible u/s 102, Code of Criminal Procedure, cannot be placed as an argument when powers therefore are not provided u/s 102, Code of Criminal Procedure.

In these circumstances, the learned Judge felt that the decision of Padmini Jesudurai, J., requires reconsideration and therefore, there is a need for a binding enunciation of law by a Division Bench. He formulated the following questions for decisions:

Are the provisions of Section 102, Code of Criminal Procedure attracted when the creation of suspicion of the commission of an offence, was not on the discovery of the property, but the discovery of the property was a sequel to the discovery of the commission of an offence (of facts the commission of the offence was known much earlier to the discovery of the Bank account?

Do the words ''seizure'' used in Section 102, Code of Criminal Procedure take in its fold ''impounding, freezing or prohibition of operation of a bank account", when the code has used the words "seize", "take possession", "attach" or "prohibit delivery" in various other sections depending on the context? What bearing will the provisions of other enactments have in construing the scope of Section 102, Code of Criminal Procedure?

Do the provisions of Chapter 34 of the Code of Criminal Procedure relating to disposal of property, enlarge the scope of Section 102, Code of Criminal Procedure?

Accordingly, this matter has been referred to this Bench for a decision on the said questions.

Before dealing with the points referred to us, it would be useful to extract Section 102, Code of Criminal Procedure dealing with the powers of the police to seize property. It reads as follows:

Power of police officer to seize certain property:

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.

Such police officer, if subordinate to the officer in charge of a police station shall forthwith report the seizure to that officer.

Every police officer acting under Sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking 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.

The first question raised by Arunachalam, J., is as to the extent of the power of the police to seize certain property and the circumstances under which such power can be effected by police. According to him, to justify action u/s 102, Code of Criminal Procedure, the property must be found under circumstances which create suspicion of the commission of any offence. In other words, it will apply to cases where a police officer comes acres certain property, in such circumstances, which create in his mind suspicion that an offence has been committed. He referred to various circumstances like a case where a public servant is found in possession of monies in his Bank account far and in excess of his known sources of income or when a person is found in possession of bundles of currency notes and such other similar circumstances. If a person is found in possession of properties under those circumstances, a reasonable suspicion can be entertained by a police officer regarding the commission of offence by such person. According to the learned Judge, it is only when a police officer finds property under circumstances which would create suspicion of his commission of any offence, he can invoke the provisions in Section 102, Code of Criminal Procedure and seize the properties. Otherwise, he has no power to do so. The learned Judge came to the conclusion that the discovery of the property under suspicious circumstances must lead to the discovery of the commission of an offence and only in those circumstances the police officer can exercise the power of seizure u/s 102, Code of Criminal Procedure. Emphasis is made on the second leg of Sub-section (1) and it is interpreted that only when a police officer finds a property under suspicious circumstances and the said property is not already involved in any crime, he has got jurisdiction to seize the same. When a crime had already been registered, it is not possible to say that the property was found under suspicious circumstances. On this line of reasoning, the learned Judge held that in a case like this where a crime is registered and during investigation if any property is found, there is no power available under this section which would enable the police officer to seize the same. It is no doubt true that the said line of thinking looks attractive, but it is not possible to agree with the said reasoning, since if such a reasoning is accepted, the very object of conferring power on the police officer to seize a property concerned in a crime would be defeated. In interpreting the scope of a particular procedural law, the purpose for which such provisions are incorporated in the procedural law has to be taken note of. An interpretation of such a provision cannot be done in isolation without considering the purport of such a provision being made in the Code. The Scheme of the Code shows that various powers are conferred on an investigation officer to investigate into a crime and unearth all possible evidence which would enable the prosecution to prove the guilt against an accused person. If there is a power on the police officer to seize a stolen property or a property suspected to have been stolen, there is no reason why such a power should be denied to the police officer to seize any property which may be suspected to have been involved in any other crime. The only bar on the powers of the police officer appears to be that before seizing such a property, the police officer must be satisfied that there was sufficient reason to suspect that it was involved in any offence. If Sub-section (1) is read in this background, the latter part of the section would only mean that whenever a police officer intends to seize a property, he can do so only under circumstances which create suspicion of the commission of any offence. It is not possible to say that a registration of a crime is a bar for seizing a property involved in such a crime. There is no reason why such a restricted meaning should be given to the said section. If the police officer has got power to seize any property if it is found under circumstances which create suspicion of the commission of any offence before registering a crime, there is no reason to hold that he has no power to do so once a crime has been registered. There is nothing to indicate that the Parliament intended to make such a provision in the Code. In order to achieve the object of Section 102, Code of Criminal Procedure, the police officer must have powers to seize any property if it is found under circumstances which create suspicion that it is involved in any offence. It is no doubt true that the police officer must exercise great care and caution before seizing properties under this section, as it is likely to be misused. That is the reason why Sub-section (2) casts a duty on the police officer, if he is subordinate lo the officer in charge of the police station, to report the seizure to his superior forthwith. Apart from that, he is also obliged to report the seizure to the Magistrate having jurisdiction. Therefore, sufficient safeguards are in built in the section itself, which would act as a check on the powers of the investigating officer. Therefore, we are unable to share the opinion of Arunachalam, J. in this regard.

The most important point raised by Arunachalam, J. is the second question relating to the power of the police officer to freeze a bank account and prohibit the operation of the same during the course of investigation and whether the money in the Bank would come within the definition of ''property'' found in Section 102, Code of Criminal Procedure. The third question raised in this regard also is connected with this question and, therefore, it will be useful to deal with them together.

The main contention raised by Mr. S. Pitchai, learned Counsel appearing for the Petitioner is that Bank accounts are not property and that under the Code of Criminal Procedure the police have no right to freeze Bank funds since the relationship between the Bank and the customer is that of a debtor and creditor and the Bank is under obligation to pay back the money to the customer as and when required by the customer. According to him, when a customer deposits money into a Bank, it loses its character and becomes unidentifiable. The person, who deposited the money, has got only a "chose in action" to get back the amount. It was, therefore, contended that the money in a Bank account cannot seized. In support of his contentions, learned Counsel relied on the decisions in Textile Traders Syndicate Ltd., Bulandshahr Vs. The State of U.P. and Others, Praja Sehkari Udyog, Bharatpur Ltd. v. State of Rajasthan 1979 Crl. L.R. (Raj) 645 and Swaran Sabharwal v. Commissioner of Police 1988 Cri. L.J. 241. On the other hand, the Respondent Bank and the prosecution contend that the said Bank account would be the property which is concerned in an offence. The word ''property'' has not been defined in the Criminal Procedure Code. As per Section 2(y) Code of Criminal Procedure in the absence of a definition to any term, the definition found in the Indian Penal Code would be applicable. We find that the word ''property'' has not been defied in the Penal Code. But Section 22, I.P.C. defines ''moveable property'' stating that the words ''moveable property'' are intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything, which is attached to the earth. In legal parlance, the word ''properly'' is a comprehensive word which can be used to denote different meanings depending on the context in which it is used. Therefore, it is not possible to define the word ''property'' in abstract terms. It cannot, therefore, be said that the term ''property'' in its strict legal sense only means the physical object itself, but on the other hand, it would take in certain rights of the physical object. The main contention of Mr. Pitchai is that the right in question is nothing but a chose in action because the Bank is in a position of a debtor and the only right its customer can have is to claim the amount in his account. Therefore, the question is whether a chose in action is a property which would come within the definition of ''property'' found in Section 102. Code of Criminal Procedure. A chose in action has been denied as the right to recover a sum of money in action and the Bank deposit is admittedly a chose in action and, therefore, it must be deemed as property in its wider sense.

In The Delhi Cloth and General Mills Co. Ltd. Vs. Harnam Singh and Others, the Supreme Court considered the character of money in a Bank and held as follows:

That a debt is "property" is, we think, clear. It is a chosen in action and is heritable and assignable and (Sic) is treated as property in India under the Transfer of Property Act, which calls it an actionable claim.

We have already noticed that the definition found in the Indian Penal Code is only inclusive in nature and the definition is not exhaustive. In R.K. Dalmia Vs. Delhi Administration, the Supreme Court considered the expression ''property'' used in the Penal Code and held that the word ''property'' is used in a much wider sense than the expression ''moveable property'' is used in a much wider sense than the expression ''moveable property''. In that case, the accused were prosecuted and convicted for offences u/s 405 and 409, I.P.C. on charges that the accused Dalmia in his capacity as Chairman of the Board of Directors and the principal officer of the Bharath Insurance Company Limited and being entrusted with the funds of the above Company, standing in the accounts of the various banks in which the company had current accounts, diverted the above funds to the Bharath Union Agencies, one of his own concerns. The other offences were also committed by him in this connection. The plea raised on behalf of the accused was that the funds of the Bharat Insurance Company in the Chartered Bank, Bombay which were said to have been misappropriated, were not ''property'' within the meaning of Section 405 and 409 I.P.C. The main contention was that the term ''property'' would refer only to moveable property and not to a chose in action. Their Lordships of the Supreme Court rejected the contention and following the earlier decision in The Delhi Cloth and General Mills Co. Ltd. Vs. Harnam Singh and Others, above referred to held as follows:

The word ''property'' is used in the Penal Code in a much wider sense than the expression ''moveable property''. There is no good reason to restrict the meaning of the word ''property'' to movable property only when it is used without any qualification in Section 405 or in other sections of the Penal Code. Whether the offence defined in a particular section of the Penal Code can be committed in respect of any particular kind of property will depend not on the interpretation of the word ''property'' but on the fact whether that particular kind of property can be subject to the acts covered by that section. It is in this sense that it may be said that the word ''property'' in a particular section covers only that type of property with respect to which the offence contemplated in that section can be committed.

It was made clear in that case that a Bank balance, which is a chose in action, has to be construed as "property" with reference to which "offences against property" found in Chapter 17 of the Indian Penal Code could be committed.

An ideal question arose before the Punjab and Haryana High Court in Gurcharan Singh v. The State of Punjab 1979 P & H. L.R. 514 wherein a Division Bench of that Court followed the interpretation given by the Supreme Court in the above said case and held that a Bank account is a chose in action which is recoverable by suit or action of law and, therefore, it would be thus, part of property belonging to the customer and that it would be his chosen in action and the only mode of seizure of that chose in action is the act of freezing the account or prohibiting the Petitioner from operating the account. They have categorically held that such a chose in action is a personal property of the customer within the meaning of Section 102, Code of Criminal Procedure and, therefore, its seizure by issuing a prohibitory order is perfectly valid.

In Bharat Overseas Bank v. Minu Publication 1988 L.W. (Crl.) 106 above referred to, Padmini Jesudurai, J. elaborately considered all aspects of the matter and after following the decisions of the Supreme Court and the Punjab and Haryana High Court above referred to, came to a definite conclusion that money in a Bank account is property for the purpose of Section 102, Code of Criminal Procedure. This view was not acceptable to Arunachalam, J. for the reasons set out in his judgment which we have already extracted.

Mr. S. Pitchai, learned Counsel appearing for the Petitioner relied on certain provisions contained in the Banking Regulation Act, 1949 and contended that the said Act being a special law, the provisions contained in Section 102, Code of Criminal Procedure are not applicable to the facts of the present case. Section 45ZB of the Banking Regulation Act, 1949 reads as follows:

Notice of claims of other persons regarding deposits not receivable - No notice of the claim of any person, other than the person or persons in whose name a deposit is held by a banking company, shall be receivable by the banking company, nor shall the banking company be bound by any such notice even though expressly given to it:

Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such deposit is produced before a banking company, the banking company shall take due note of such decree, order, certificate or other authority.

We are unable to understand how the said section would help the case of the Petitioner. The said provision refers to the claim of a third party to the deposits available in a Bank and, therefore, it has no relevance to the points in question. Mr. Pitchai further contended that the enactment of the Criminal Law Amendment Ordinance, 1944 (Ordinance 38 of 1944), which was promulgated to prevent disposal or concealment of money or other property procured by means of certain offences available under the Indian Penal Code, shows that the prosecution has no power to proceed against Bank deposits, u/s 102, Code of Criminal Procedure. He proceeded on the reasoning that if such a power was available u/s 102, Code of Criminal Procedure the Government would not have come forward with the promulgation of such an ordinance.

Mr. Pitchai referred to a decision in Textile Traders Syndicate Ltd., Bulandshahr Vs. The State of U.P. and Others, wherein a single Judge of the Allahabad High Court considered in case in which a similar situation arose where the investigating officer issued a prohibitory order to the Bank not to pay the amount to the accused as the said amount standing to the credit of the accused was seized u/s 550 of the then Criminal Procedure Code which is equivalent to the present Section 102, Code of Criminal Procedure. The learned Judge held that it cannot be done since the property was unidentifiable and the actual money was already parted with and the amount was lying with the Bank as its own money which could be paid back to the accused whenever demanded. According to the view of the learned Judge, unless an identifiable moveable property was in the possession of the accused, the same could not be seized u/s 550 of the old Code. The said view was not accepted by a Division Bench of the Punjab and Haryana High Court in the case above referred to. Mr. Pitchai then referred to the decision in Praja Sehkari Udyog Bharatpur ltd. v. State of Rajasthan 1979 Crl. L.R. (Raj.) 645 and submitted that the word ''seizure'' in Section 102 contemplates actual physical possession and, therefore, a restraint order under it by investigating officer is not warranted. Further he referred to the decision in Swaran Sabharwal v. Commissioner of Police (Sic) wherein the Delhi High Court held that even assuming that a Bank account is property within the meaning of the said section, it should be property "found under circumstances which create the suspicion of the commission of an offence to justify action u/s 102. According to the learned Judges, this section would apply where a police officer comes across certain property in circumstances which create in his mind a suspicion that an offence has been committed. With great respect to the learned Judges, we are unable to share the said view for the reasons already discussed above.

In order to understand the real scope of Section 102, Code of Criminal Procedure dealing with the power of a police officer to seize certain property, we have to necessarily refer to Chapter 34 in the Code dealing with disposal of property, as the meaning of the term ''property'' has to be understood in a harmonious manner taking into consideration of all the provisions contained in the Code. The seizure of property contemplated u/s 102, Code of Criminal Procedure is certainly reflected in Chapter 34 of the Code as is seen from Section 457 under which seizure of property by any police officer has to be reported to a Magistrate and such Magistrate is authorised to make such order as he thinks fit respecting the disposal of such property. This provision deals with the orders that are passed with reference to property recovered during investigation and before the commencement of trial or enquiry. On the other hand, Section 451, Code of Criminal Procedure deals with powers of the Magistrate to pass orders for custody and disposal of property pending trial in certain cases. After the completion of the trial, the Magistrate has to pass an order u/s 452, Code of Criminal Procedure for disposal of that property. The Magistrates are empowered with such jurisdiction not only because the property is produced before them or in their custody but also because it is the property regarding which any offence appeared to have been committed or which was used for the commission of any offence. It provides for delivery of any property to any person claiming to be entitled to possession thereof. Sub-section (5) of that section provides that the term ''property'' includes not only such property regarding which an offence appears to have been committed as was originally in the possession of the accused but also any property into or for which the same may have been converted or exchanged, and anything acquired by such conversion or exchange, whether immediately or otherwise. This sub-section clearly indicates that the Magistrates exercising power under this provision have jurisdiction to dispose of the money available in the Bank account if it is established that the property which was the subject matter of an offence has been subsequently converted or exchanged, whether immediately or otherwise. Section 453, Code of Criminal Procedure provides for payment to innocent purchaser of money found on accused. u/s 456, Code of Criminal Procedure the Magistrates have power to restore possession of immovable property to a person who has been dispossessed of any immovable property after evicting by force, if necessary, any other person who may be in possession of the property. As rightly pointed out by Padmini Jesudurai, J. in modern days where commission of white collar crimes and bank frauds are increasing, interpreting the term ''property'' in Section 102, Code of Criminal Procedure in such a way as to exclude money in a Bank would certainly have the effect of placing unnecessary hurdles in the process of investigation into such crimes. The very object of the Criminal Procedure Code would be defeated if such a narrow construction is placed on certain terms found in the Code. The object of these provisions is only to detect crimes and effectively deal with criminals. No one can be permitted to evade the process of law by resorting to hypertechnical interpretations to the provisions contained in the Code. We fail to understand as to why the power available to the police to seize the cash in the hands of the accused is not available for seizing the bank account which in effect reflects the money obtained by commission of a crime. The principle that the relationship between a banker and a customer is that of a borrower and a lender cannot be stretched too far and the said principle has no application in so far as the exercise of the power conferred on the police for investigating into crimes is concerned. The principle of a debtor and a creditor applicable in the case of transactions with a Bank stands on an entirely different basis and it is a peculiar relationship existing between a banker and a customer and it will have no application in a case where money obtained by committing a crime is deposited in a Bank and the same is available in the accounts of an accused person. It should be noted that the right of a customer as against his banker is not the subject matter here. But we are concerned with the power of the State to seize property involved in a crime. Therefore, on a consideration of the ratio laid down in R.K. Dalmia''s case above referred to and the provisions contained in Chapter 34 of the Code, we are inclined to hold that money in a bank account is property for the purpose of Section 102, Code of Criminal Procedure.

The controversy in this case is as to whether such a bank account could be seized u/s 102, Code of Criminal Procedure by the investigating officer. We have already elaborately set out the reasons for coming to the conclusion that such a bank account is property. In this connection, it is worthwhile to notice a passage found in 73 Corpus Jurists Secundum at page 140 relied on by the Allahabad High Court in the decision cited above. It reads as follows:

While the word property may signify the physical corporeal thing, or it may denote rights and interests, when the term is not without qualification expressly made or plainly implied, it can reasonably be construed to include obligations rights and other intangibles as well as physical things; and thus the word ''property'' means not only the thing possessed, that is, the physical corporeal thing but also rights in the physical corporeal thing which are isolated and sanctioned by law.

A Customer, who has deposited some money in a Bank, is entitled to draw the amount whenever he wants by operating upon his account and that is the act of ownership which he exercises over his Bank account. We have noticed several provisions relating to the seizure and disposal of property found in the various provisions of the Criminal Procedure Code. In order to prevent a personal accused of a crime from exercising any acts of ownership or possession over a corporeal tangible property, it is physically seized by taking possession of the same and producing it before the Court. The property so seized by the police is produced before the Court and the Court deals with the same as provided u/s 34 of the Criminal Procedure Code. By this method, the property is secured and possession is given to the rightful owner at the end of the trial. Therefore, the police must have similar powers while dealing with monies deposited in a Bank by an accused person either in his own name or through his agents. The only way the police can exercise such a power is to issue a prohibitory order restraining the accused person and others from operating the account in the Bank. In common parlance, it is usually called as "freezing" a bank account, In effect, what is sought to be done by the police during the course of investigation is the same as (Sic) case of other forms of property and we do not find any difference in this regard. The seizure is constructive in the sense that the thing is not physically seized but the Bank is prohibited from giving it to the Petitioner. In case the accused person or the person in whose name the Bank account stands is permitted to withdraw the amount, nothing would remain for proceedings to be taken u/s 452 Code of Criminal Procedure for confiscation or for returning the same to the rightful owner. Therefore, the expression ''property'' found in Section 102, Code of Criminal Procedure has to be given an extended meaning and, therefore, it follows that it is a property which could be seized by passing a prohibitory order.

For the reasons discussed by us above, we respectfully agreed with the decision of Padmini Jesudurai, J., and disagree with the interpretation given by Arunachalam, J. in the cases referred to above.

Our answer to the second question raised by Arunachalam, J. is that the word "seizure" used in Section 102, Code of Criminal Procedure would take in its fold ''impounding, freezing or prohibition of operation of a bank account'' and the words "seize", "take possession", "attach" or "prohibit delivery" in various other sections in the Code will have no relevance in interpreting the provisions contained in Section 102, Code of Criminal Procedure. As far as the third question is concerned, our answer is that it is not a question of enlarging the scope of Section 102, Code of Criminal Procedure by referring to the provisions of Chapter 34 of Code, but it is a matter of harmonious construction of the word ''property'' found in Section 102, Code of Criminal Procedure. Accordingly, we answer the three questions raised by Arunachalam, J. in the above terms.

Learned Counsel for the Petitioner argued that even if such seizure is authorised under the Code, it is illegal since the police officer has not reported about the seizure to the Court as required u/s 102(3), Code of Criminal Procedure. We are not called upon to deal with the matter on merits and it is entirely left to the concerned learned Judge to dispose of the matter on merits. This petition will be posted before the concerned learned Judge for disposal of the same on merits in the light of the answers given by us to the reference made to us. This criminal miscellaneous petition is ordered accordingly.