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Judgment
J.M. Panchal, J.—Mr. Sandip Bhatt, learned counsel, waives service of notice of rule on behalf of respondent No. 1. Ms. Harsha Devani,
learned Assistant Government Pleader, waives service of notice of rule on behalf of respondents Nos. 2 and 3. At the request of learned counsel
appearing for the parties, the petition is heard today.
By means of filing this petition under article 226 of the Constitution, the petitioners have prayed to declare the action of respondent No. 2 of
prohibiting respondent No. 1-bank to pay any amount to the petitioners out of their accounts with the bank, as without jurisdiction, illegal, unjust
and arbitrary. The petitioners have further prayed to direct the respondents to permit the petitioners to operate the bank accounts opened by them
with respondent No. 1-bank.
Petitioner No. 1 is the father of petitioners Nos. 2 and 3. Petitioner No. 1 has opened a home savings account with State Bank of Saurashtra,
Sardar Bazar Branch, Rajkot. The petitioners have also jointly opened current accounts with the said bank. One Rajendra Jayantilal Mankodi has
filed a complaint on March 8, 1996, with Pradyuman Nagar police station against the petitioners and another for the offences punishable under
sections 420, 467, 468, 471, 120B and 511 of the Indian Penal Code. Petitioner No. 1 had drawn a cheque for an amount of Rs. 11,000 on
November 8, 1996. However, the said cheque was not honoured by respondent No. 1, as respondent No. 2 has prohibited the bank to pay any
amount to the petitioners out of their accounts. This is evident from a communication dated November 8, 1996, issued by respondent No. 1 to
petitioner No. 1 which is produced at annexure B to the petition. In the petition, the petitioners have claimed that the police officer has no power to
direct respondent No. 1 to stop payment of the cheque drawn on respondent No. 1, nor is respondent No. 1-bank justified in not paying the
amount mentioned in the cheque to the petitioner on the ground that the bank has received instructions from the police officer not to permit the
petitioners to operate the bank account. Under the circumstances, the petitioners have filed the present petition and claimed the reliefs to which
reference is made earlier.
The petition was placed before the court for admission hearing on December 13, 1996. After hearing learned counsel for the petitioners, notice
was issued making it returnable on December 18, 1996. Though the respondents are duly served, no affidavit in reply has been filed by any of the
respondents controverting the averments made in the petition. The question which arises for the consideration of the court is whether respondent
No. 2 has authority to prohibit respondent No. 1-bank from making payment of any amount to the petitioners out of their accounts with bank.
Before considering the question posed in the petition, it would be relevant to notice the relationship between a banker and customer and the
nature of the amount lying in the bank account of a customer. The money on being deposited by a customer belongs to the bank and the customer
has a credit for the sum deposited, an actionable claim to the amount. The bank has the right to possess currency notes received in the ordinary
course of business without suspicion of the notes being involved in the commission of an offence. The relationship of a banker and customer who
pays money into the bank is an ordinary relation of creditor and debtor with a super-added obligation arising out of custom of bankers to honour
the customer''s drafts. The position is that once money is deposited by a person with a bank, there remains only a debt due from the banker to the
customer. When a customer opens an account with a bank, he gives some money to the bank. The money cannot be claimed by the customer in
specie. The money can be utilised by the bank in any permissible manner it likes. The only liability which the bank undertakes, is that it agrees that
whenever the customer demands, it would pay him an equivalent sum either in full or in part. The bank really is the debtor of the customer to that
extent. It is not necessary for it to keep any money always in hand in anticipation of any demand to be made by the customer. When the customer
actually makes a demand, it can procure the necessary amount from any one and pay it to the customer.
This being the legal position, when money alleged to have been criminally misappropriated is deposited by an accused with a bank, the money
cannot be regarded as property capable of production within section 452 of the Code of Criminal Procedure, 1973. The money deposited
becomes the property of the bank. The depositor has only an actionable claim and the bank owes a debt to him. The debt can be attached by a
criminal court as contemplated by section 83(3) of the Code of Criminal Procedure, 1973. Section 102 of the Code of Criminal Procedure, 1973,
deals with powers of police officers to seize certain property which reads as under :
102(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.
A bare reading of the section makes it abundantly clear that seizure of a debt is neither contemplated, nor empowered at all. All that the section
provides, is that 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, can be seized. u/s 102 of the Code, there can be no ""stop order"" on the bank preventing the accused
from operating on his account. Having regard to the nature of the amount deposited by the customer in a bank account, it cannot be said that there
is any ""property"" with the bank to which actual physical possession can be taken. Section 102 of the Code does not appear to contemplate a
police officer prohibiting the payment of a debt by a debtor to the accused person. If that can be done, it may create unnecessary complications.
For instance, if after stealing Rs. 1,000 an accused person lends it on a mortgage or a bond to some one who borrows it for saving his property for
being sold in execution of a decree, can the police officer who is investigating the case of theft, direct the debtor that he should not pay the money
for the satisfaction of his decree and allow his property to be sold in execution of the decree ? Stopping of payment of cheque presumably with a
view to passing some order with regard to the amount lying in the account, at the conclusion of the trial is evidently not covered by this section. The
order is in the nature of attachment before judgment. Such an order is not covered by section 102 of the Code. In a criminal case, the accused has
to be presumed to be innocent till he is adjudged guilty. An order to his prejudice which has the effect of attaching property would be inconsistent
with this fundamental principle of criminal jurisprudence.
The words emphasized and relied upon on behalf of the petitioners are ""seizure of property"". The use of these words shows that what is
contemplated by the section is movable property of the nature mentioned in the section which could actually be seized by the police officer. Here
the police officer has not actually seized any property. What he has done is that he has directed the bank with which the petitioners have an
account not to pay any amount out of the accounts to them. According to its dictionary meaning, the word ""seize"" means to lay hold of suddenly, to
forcibly take hold of, to reach and grasp, to clutch. It is meant ""to take possession of, or appropriate, in order to subject to the force or operation
of a warrant, order of court or other legal process"". A reference to some of the other provisions of the Code of Criminal Procedure also shows
that the word ""seizure"" has been used in the Code in connection with the taking of actual physical possession of the movable property. For
instance, in section 83 where attachment is provided for, sub-section (3) relates to a debt or other movable property. The attachment of such
property can be made (a) by seizure, or (b) by the appointment of a receiver, or (c) by an order in writing prohibiting delivery of such property to
the proclaimed person or to any other on his behalf, or (d) by all or any of two such methods as the court thinks fit. Here, it appears to be obvious
that the first method has been used with reference to the movable property capable of actual seizure. The rest of the methods have been used with
reference to an attachment of any movable properties which are not capable of actual seizure. In sub-section (4) of section 83 several methods
have been mentioned which are to be followed in connection with the attachment of immovable property, but in clause (a), sub-section (4) of
section 83, the word used is not ""seizure"" but words used are ""of taking possession"". So where the property concerned is movable property of
which actual physical possession can be taken, the word is ""seizure"" but where the property concerned is an immovable property, the words used
are taking possession. In section 100, sub-section (5) of the Code, there is a provision for preparing a list of property found at the time of a
search. Therefore, it will be found that the word ""seized"" is used for movable properties found at that time. These uses of the word ""seized"" appear
to be in consonance with the dictionary meaning of the word ""taking of actual custody"". There appears to be no reason why in section 102 of the
Code, the word should be interpreted in any different sense. If, therefore, the word ""seized"" is used in section 102 in the sense above mentioned, it
is obvious that it will only mean the act of taking actual physical possession of the property capable of being so possessed. As there is no property
with the bank of which actual physical possession can be taken, an order u/s 102 of the Code cannot be passed to seize the amount lying in the
account of a customer. Here, what the police officer has done appears to be that he has issued a prohibition directing the bank not to pay any
amount to the petitioners. He has not in fact seized any amount.
As long as the money is in the possession of the thief and capable of seizure it may be open to the police officer to seize it on the ground that it
was or was suspected to be stolen property but once it passes into the hands of a debtor and the money becomes unidentifiable, there can be no
question of its being seized by the police officer. An order by a police officer on a bank prohibiting payment of money to one having an account,
alleging that it was got by committing an offence is illegal. Therefore, order prohibiting respondent No. 1-bank not to pay any amount to the
petitioners, out of their accounts with the bank is without jurisdiction and liable to be set aside. Under the circumstances, the petition deserves to
be allowed.
For the foregoing reasons, the petition succeeds. The order issued by respondent No. 2 prohibiting respondent No. 1-bank to pay any amount
to the petitioners out of their accounts is hereby set aside and quashed. Respondent No. 1 is directed to permit the petitioners to operate their
account in the usual course of business. Rule is made absolute accordingly with no order as to costs.