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TMI Blog2021 (9) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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. The contrary view expressed by the Karnataka, Gauhati and Allahabad High Courts, does not represent the correct law. It may also be seen that under the Prevention of Corruption Act, 1988, in the matter of imposition of fine under sub-section (2) of Section 13, the legislatures have provided that the courts in fixing the amount of fine shall take into consideration the amount or the value of the property which the accused person has obtained by committing the offence or where the conviction is for an offence referred to in clause (e) of subsection (1) of Section 13, the pecuniary resources or property for which the accused person is unable to account satisfactorily. The interpretation given by us in respect of the power of seizure under Section 102 of the Criminal Procedure Code is in accordance with the intention of the legislature engrafted in Section 16 of the Prevention of Corruption Act As per the status report filed by the CBI, the amounts transferred by TPE to RAPL in the NatWest Bank, London account, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S$ 20 million was paid/received against illegal gratification/kickbacks in the bank account of the petitioner M/s. Ravina Associates Pvt. Ltd. (in short RAPL ) in U.K. Pursuant to the Letters Rogatory issued, an order was issued freezing the accounts of the two petitioners i.e. RAPL and Ravina Khurana. Initially, the CBI filed a closure report. However, the same was not accepted by the learned trial court, which directed further investigation. Pursuant to the further investigation conducted, CBI filed a charge sheet against M/s. T.P.E. Moscow Russia, Mr. Sergei Mukhin, Mr. Alexander V. Schegolev representative Director of M/s. T.P.E. and the petitioners herein under Section 420 read with 120B IPC. No officer of the NTPC was found involved and no charge sheet for offence punishable under the provisions of the Prevention of Corruption Act was filed. No cognizance on the report filed by the CBI after carrying out further investigation has been taken by the learned Special Judge which has directed the CBI to conduct further investigation, which order of the learned Special Judge has been challenged by the CBI before this Court as the case of CBI is that it has carried out the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 34,08,03,384 Note : The above tax outstanding does not include interest u/s 220(2) 5. Thus, according to the Income Tax Department, since the petitioners were maintaining accounts with National West Minister Bank, London which has been frozen by the order of the Special Court and could not be operated, the Income Tax Department sought recovery of the outstanding tax demand from the amounts lying deposited. 6. The earlier applications filed by the Income Tax Department Authority and the petitioners were dismissed vide order dated 26th November 2009 which order was challenged before this Court and vide order dated 6th August 2012 in Crl.Rev.P.128/2010, this Court disposed of the petition setting aside the order passed by the learned Special Judge, directing the learned Special Judge to pass appropriate orders for bringing back the amount lying in the Natwest Bank, London bearing Account Nos. 1400103368092, 44259816, 1400021000 and 18009336. The learned Special Judge was also directed that while passing the orders to the aforesaid effect, the learned Special Judge shall direct the money to be remitted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried out and vide order dated 7th January, 2010 a total demand of ₹ 55,16,66,015/- was made, out of which ₹ 25,50,518/- had been recovered through attachment of bank accounts and the balance demand of ₹ 54,91,15,497 is pending. Challenging the assessment order, the petitioners filed an appeal before the Commissioner Income-Tax seeking stay of the demand which was rejected. The stay application filed by the petitioners before the Commissioner taking one of the grounds that the bank accounts of the assesses maintained at NatWest Bank, London were under restraint by the order of the Special Judge, CBI Court, Delhi and hence assessee is not in a position to deposit the demanded income-tax, was also rejected noting that the petitioners have other assets to pay the amount. The petitioners thereafter filed WP(C) 328/2010 and WP(C) 340/2010 respectively seeking stay of recovery of the outstanding demand of ₹ 54,91,15,497 for the assessment years 2004-05, 2005-06 and 2006-07 in the case of petitioner No.2 or in the alternative the outstanding amounts be recovered from the accounts of petitioners in the NatWest Bank, London. Challenge was also laid to the order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny credit nor merit and were dismissed. 14. As is evident from the facts noted above, after registration of the RC- DAI-2006-A-0006 dated 6th March 2006, CBI sought freezing of the accounts in London, however, thereafter, filed a final report which was not accepted by the learned Special Judge and on further investigation, a charge sheet under Sections 420/120B IPC only has been filed and not under the provisions of the Prevention of Corruption Act, whereas, after the assessment was conducted, the Income Tax Authorities filed an application before the learned Special Judge, CBI, Tis Hazari seeking de-freezing of the accounts under Section 226(4) of the Income Tax Act so as to enable it to recover the tax demand on 20th December 2008 itself. 15. The issue before this Court is that whether the entire amount frozen in London and transferred to India is the case property or alleged proceeds of the crime and may be liable for confiscation in case the petitioner's are convicted and thus cannot be utilized for fulfilling the tax demands due against the petitioners. 16. Learned Senior Counsel for the petitioners contends that despite the investigation pending since 2006, no co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s D.Neogy, dealing with the case property and affirming the decision of the Madras High Court in Bharath Overseas Bank Vs. Minu Publication 1988 Madras Law Weekly (Crl.) 106, held as under:- 9. In Bharath Overseas Bank v. Minu Publication, [1988 MLW (Cri) 106] a learned Single Judge of the Madras High Court considered the same question and came to the conclusion that the expression property would include the money in the bank account of the accused and there cannot be any fetter on the powers of the police officer in issuing prohibitory orders from operating the bank account of the accused when the police officer reaches the conclusion that the amount in the Bank is the outcome of commission of offence by the accused. The Court considered the fact as to how in modern days, commission of white-collar crimes and bank frauds are very much on the increase and banking facilities have been extended to the remotest rural areas and, therefore the expression property may not be interpreted in a manner so as to exclude the money in a bank which in turn would have the effect of placing legal hurdles, in the process of investigation into the crimes. According to the learned Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide purchaser of any property, after the property is restored to the possession of the person entitled thereto. This twofold object of investing the police with the powers of seizure, have to be borne in mind, while settling this legal issue. 10. This judgment of the learned Single Judge of the Madras High Court was followed in a later decision in the case of Bharat Overseas Bank Ltd. v. Prema Ramalingam, [1991 MLW (Cri) 353] wherein the learned Judge agreeing with Padmini Jesudurai, J. in Bharat Overseas Bank case [1988 MLW (Cri) 106] came to hold that money in a bank account is property within the meaning of Section 102 of the Criminal Procedure Code, which could be seized by a prohibiting order. In the aforesaid case, the learned Judge has also noticed the fact that the judgment of Padmini Jesudurai, J. in Bharat Overseas Bank, [1988 MLW (Cri) 106] was upheld by the Division Bench subsequently. 11. In the case of Gurcharan Singh (Dr) v. State of Punjab, [(1978) 80 Punj LR 514 (DB)] a Division Bench of the Punjab Haryana High Court differing with the view taken by the Allahabad High Court in Textile Traders, [AIR 1960 All 405 : 1960 Cri LJ 871] c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation given by us in respect of the power of seizure under Section 102 of the Criminal Procedure Code is in accordance with the intention of the legislature engrafted in Section 16 of the Prevention of Corruption Act referred to above. In 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 officer, prohibiting the account of the accused from being operated upon. Though we have laid down the law, but so far as the present case is concerned, the order impugned has already been given effect to and the accused has been operating his account, and so, we do not interfere with the same. 18. As per the status report filed by the CBI, the amounts transferred by TPE to RAPL in the NatWest Bank, London account, in relation to the impugned transaction are mentioned in entries 2 and 3 above, totalling to a sum of USD 2,15,71,843.90. However, the amount which was frozen and received in India is beyond the amount in relation to impugned transaction with TPE. The amount received in excess of the amount re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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