The Kerala High Court has ruled that freezing a person’s bank account under Section 102 of the Code of Criminal Procedure (CrPC) during an investigation into offences under the Prevention of Corruption Act (PC Act) is legally valid. Justice C. Jayachandran rejected the accused’s argument that such freezing should only be done under the Criminal Law Amendment Ordinance, 1944.
Key Legal Standpoints
The petitioner contended that since the 1944 Ordinance applies to offences under the PC Act, the general provision under Section 102 CrPC should not be invoked. Advocate John S. Ralph, acting as amicus curiae, argued that the ordinance offers additional safeguards, including a mandatory judicial order and an opportunity for the accused to be heard.
However, the High Court held that the objectives of the CrPC and the ordinance are distinct. Section 102 CrPC allows for the seizure of property suspected to be linked to a crime as part of the investigation process. In contrast, the ordinance ensures that illicit money acquired through corruption is secured for potential forfeiture.
The Court also referenced the Supreme Court ruling in State of Maharashtra v. Tapas D. Neogy (1999), which affirmed that bank accounts qualify as “property” under Section 102 CrPC and can be seized accordingly.
Conflicting High Court Views and Supreme Court’s Role
The Madras and Patna High Courts have issued differing rulings on the applicability of Section 102 CrPC for freezing bank accounts in PC Act cases. While the Madras High Court upheld the provision’s use, the Patna High Court ruled that such actions must be taken exclusively under Section 18A of the PC Act. The Supreme Court is now expected to resolve the conflicting interpretations.
Case Background and Charges
The petitioner was accused of abetting the primary accused, an accountant at the Kerala Bar Council, in misappropriating Rs. 7.6 crores from the Kerala Bar Council Welfare Fund. The prosecution invoked multiple charges under the Indian Penal Code (IPC), including Sections 109, 120B, 409, 420, and 477A, along with Sections 13(2) and 13(1)(c) of the PC Act. Two of the petitioner’s bank accounts were frozen, prompting the legal challenge.
Non-Compliance with Section 102(3) Not Fatal
The petitioner argued that the freezing order was illegal due to non-compliance with Section 102(3) CrPC. This requires reporting seizures to the Magistrate. However, the Court, citing Shento Varghese v. Julfikar Husen and Others (2024), ruled that such reporting is not a jurisdictional requirement. While delays in compliance may impact the prosecution’s case, they do not invalidate the seizure itself.
Despite upholding the freezing order, the High Court directed the investigating officer to comply with Section 102(3) within one month to ensure procedural fairness.
Implications of the Ruling
This judgment reinforces the investigative authority’s power to freeze bank accounts in corruption cases under Section 102 CrPC. The Supreme Court’s upcoming decision on the matter will provide further clarity on the applicability of the provision across jurisdictions.
