IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT FRIDAY, THE 16TH JANUARY 2009 / 26TH POUSHA 1930 Crl.MC.No. 4437 of 2008() ------------------------- FIR NO.1876/08 OF ALUVA POLICE STATION PETITIONERS/ACCUSED: ----------------------------------- 1. SHIBU M.G. AGED 26 YEARS S/O. LATE M.B.GOPI, MATTAMTHOTTATHIL HOUSE, ERUMATHALA P.O. 2. AJIKUMAR K.R. AGED 33 YEARS, S/O.K.K.RAMANAN,KEEZHPURATHKUDY HOUSE, ERUMATHALA P.O. 3. M.A.JOSEPH, AGED 41 YEARS, S/O.ANTONY,AZUVANCHERY HOUSE, ERUMATHALA P.O. 4. JERRY MATHEW, AGED 27 YEARS, S/O.MATHAI PAPPU MAZHUVANCHERY HOUSE, ERUMATHALA P.O. 5. CHANDRAN P.K. AGED 38 YEARS, S/O.P.K.KANDAN, PALACHOTTIL HOUSE, ERUMATHALA P.O. 6. SHANTY VARGHESE, AGED 28 YEARS, S/O.M.A.VARGHESE, AZHUVANCHERY HOUSE, ERUMATHALA P.O. 7. P.A. POULOSE, AGED 29 YEARS, S/O.P.A.AGUSTINE, PAYYAPPILLY HOUSE, ERUMATHALA P.O. BY ADV. SRI.K.S.RAJEEV SRI.RAJIV NAMBISAN RESPONDENT(S): --------------- 1. STATE OF KERALA REPRESENTED BY S.I. OF POLICE, ALUVA BY P.P. HIGH COURT OF KERALA. 2. THE SECRETARY, THE KUTTAMASSERY SERVICE CO-OPERATIVE BANK LTD NO.766 KUTTAMASSERY, ALUVA,KEEZHUMAD BRANCH. ADDL.R3. P.P. RAJU, S/O. MANI PAPPU, PUTHUSSERY HOUSE, ERUMATHALE P.O., ALUVA (IMPLEADED AS ADDL.R3 AS OER IRDER DT,25.11.08 IN CRL.M.A. 6652/08. ADV. SRI.DINESH MATHEW J.MURICKEN FOR R3 ADV. SRI.K.M.JAMALUDHEEN FOR R2 R1 BY PUBLIC PROSECUTOR SRI.P.A. SALIM THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 16/01/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: R. BASANT, J. - - - - - - - - - - - - - - - - - - - - - - Crl.M.C.No. 4437 of 2008 - - - - - - - - - - - - - - - - - - - - - - Dated this the 16th day of January, 2009 O R D E R The Petitioners face allegations in a crime registered alleging offences punishable, inter alia, under Section 120 B, 406, 420 and 468 I.P.C. Crime has been registered on the basis of a private complaint filed by the 3rd respondent before the Magistrate and referred by the learned Magistrate to the police under Section 156(3) Cr.P.C. In the complaint, the complainant alleges that he, along with 7 accused persons, was a partner of a partnership firm by name Bosco Clay Products. Property belonging to that partnership was sold. Sale proceeds were received. Sale proceeds were entrusted to the accused persons for the purpose of opening an account on the Central Bank of India, Trivandrum Branch in the name of the partners and to remit the sale proceeds in the account. Contrary to such specific stipulation and with fraudulent intention, it is contended that the account was not opened in the name of the partners. But was Crl.M.C.No. 4437 of 2008 2 opened in the name of some of the petitioners/accused alone. From that account, the amounts were siphoned out to the account of some of the partners in another Bank and later the said amounts were used for the purpose of purchasing properties in the name of the petitioners. There are further allegations of fraudulent misuse of the cheques, documents etc. 2. Be that as it may, crime has been registered. Investigation is in progress. In the course of investigation, notice dated 30.09.2008 has been issued by the Investigating Officer to the 2nd respondent Bank freezing the account maintained by the accused persons and directing that no further transactions be permitted in that account. That direction of the Investigating Officer was conveyed to the accused persons by the 2nd respondent bank under Annexure-F. 3. It is at this juncture that the petitioners have come before this Court. According to them, the crime registered is without any legal authority. The same deserves to be quashed. They do not deserve to endure the trauma of such a criminal prosecution. Crl.M.C.No. 4437 of 2008 3 4. Secondly it is contended that the Investigating Officer has no power or jurisdiction to direct the freezing of an account and to direct the bank not to permit the account holder to operate the bank account. The petitioners challenge the registration of the crime as such and pray that the crime registered may be quashed invoking the jurisdiction under Section 482 Cr.P.C. They further contend that the direction to freeze the operation of the account is at any rate unjustified. 5. The 3rd respondent has entered appearance. The 3rd respondent contends that valid allegations of culpability have been raised against the petitioners in the private complaint filed. The investigation is at an early stage. There is absolutely no merit or justice in the prayer that the F.I.R registered must be quashed invoking the jurisdiction under Section 482 Cr.P.C. It is further submitted that in any view of the matter the direction of the Investigating Officer (that the ill gotten money placed in a bank account may be seized and the persons allegedly having culpable responsibility may not be permitted to operate the account) is absolutely justified under Section 102 Cr.P.C Crl.M.C.No. 4437 of 2008 4 he said direction does not, at any rate, warrant interference, contends counsel.. 6. The learned Prosecutor, after taking instructions, submits that the investigation is at an early stage. The investigator is satisfied that the matter deserves to be investigated in greater detail. The police is justified in issuing directions to freeze the account. The direction to the Bank that the account holder should not be permitted to operate the account is perfectly justified under Section 102 Cr.P.C. In these circumstances there is absolutely no necessity to quash the crime registered invoking the jurisdiction under Section 482 Cr.P.C., submits the learned Prosecutor. 7. I have heard the arguments of the learned counsel for the petitioners, learned counsel for the third respondent and the learned Prosecutor in detail. The counsel for the second respondent Bank has entered appearance. The bank shall abide by the directions issued from time to time, submits the counsel. 8. I must alertly remind myself of the nature, quality and contours of the jurisdiction of this Court while exercising the extra Crl.M.C.No. 4437 of 2008 5 ordinary inherent jurisdiction under Section 482 Cr.P.C. It would be hazardous for this Court to attempt to resolve complicated questions of disputed facts in proceedings under Section 482 Cr.P.C. I take note of the specific contention of the third respondent that there has been fraudulent conversion of the amount which was placed in the hands of the petitioners. Instead of opening an account and placing the entire amount in the name of the partners, the same allegedly has been remitted in the name of some of the partners alone with oblique and contumacious motive. There has been an attempt to siphon out the amount from one account to another to fraudulently convert the same for use of the petitioners. At any rate, the allegations deserve to be looked into in greater detail and the police may not be deprived of the opportunity to conduct a proper investigation, it is urged. 9. There is a contention that the price shown in the document of assignment is only Rs.3.5 lakhs, whereas the third respondent now assert that the sale consideration was Rs.24.22 lakhs. 10. The learned counsel for the petitioners contend with the help of precedents that in a case of alleged misappropriation by Crl.M.C.No. 4437 of 2008 6 partners it is important and essential to prove specific entrustment of the partnership assets to the partner against whom culpable allegations are raised. Otherwise even though the partners may have civil liability he cannot be made answerable in criminal law. There is no such specific allegation of specific agreement against the petitioners in this case, it is contended. 11. Having considered all the relevant circumstances I sail to the conclusion that the allegations raised in the complaint deserve to be investigated into in detail by the police. I find no reason whatsoever to interdict the investigation and direct the police to discontinue the investigation. I shall not delve deeper into the disputed questions of fact raised. 12. What remains to be considered is whether the powers under Section 102 Cr.P.C. extends to the power to direct freezing of an account and issue of a direction that account holder should not be permitted to operate the account. The question received specific and pointed attention of the Supreme Court in the decision in State of Maharashtra v. Tapas D. Neogy (1999 AIR SCW 3389). In Crl.M.C.No. 4437 of 2008 7 paragraph 12 it is observed by the Supreme Court as follows: “We are, therefore, persuaded to take the view that the bank account of the accused or any of his relation is 'property' within the meaning of Section 102 of the Criminal Procedure Code and a police officer in course of investigation 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.” No contra precedent is brought to my notice. In these circumstances there can be no doubt about the competence of the Investigating Officer to issue directions to freeze the account. 13. There is a grievance raised that the seizure (direction to freeze the account) has not been reported to the learned Magistrate. The learned Prosecutor asserts contra. If there has been failure/omission to comply with the obligation under Section 102 Cr.P.C. to report seizure certainly the petitioners can complain before the learned Magistrate under Section 156(3) Cr.P.C. I accept the submission of the learned Prosecutor that the fact of seizure/freezing of account has been reported to the learned Magistrate. Crl.M.C.No. 4437 of 2008 8 14. I need only now observe that the parties can seek appropriate direction under Section 451 Cr.P.C. from the learned Magistrate for arrangement regarding the property in the bank account which is seized. Any party who claims to be entitled for that amount can certainly approach the learned Magistrate and seek appropriate direction under Section 457/451 Cr.P.C. 15. With the above observations this Crl.M.C. is dismissed. I may hasten to observe that I have not intended to express any final opinion on the question of culpability of the petitioners. I have only chosen to take the view that the F.I.R. registered does not deserve to be quashed invoking the jurisdiction under Section 482 Cr.P.C. and that the Investigators must be permitted to continue with the investigation. (R. BASANT) Judge tm