TaxTMI 
TaxTMI 
2025 (6) TMI 2084
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....ent for convenience. As part of its business, the 3rd respondent raised proforma invoice with Spezia Organic Condiments Pvt. Ltd. through Headstar Trading LLP, for the export of 378 metric tons of sugar from Kochi to the UAE. As advance towards the order, the 3rd respondent remitted Rs.49.53 lakhs to the account of Spezia Organic Condiments Pvt. Ltd. maintained at the Kochi branch of the IDBI Bank. The advance payment was made based on the assurance that the consignment would reach the UAE within 30 days. However, contrary to the assurance, the sugar was never despatched from India. Upon inquiries, it came to light that the commitment to deliver the consignment was made by concealing the fact that, due to a change in Government policy, it was no longer possible to export sugar from India. On being confronted with this fact, the Directors of Spezia Organic Condiments Pvt. Ltd. promised to refund the advance amount, but failed to fulfill the promise. Thereupon it became evident that the intention from the very inception was to cheat the 3rd respondent by collecting the advance amount based on the false promise. The complaint in this regard filed on behalf of the 3rd respondent led to....
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.... the amount, M/s. Headstar Trading LLP transferred that amount along with some other amount to the petitioner with the remark "Sugar Advance". One Mr. Sreekumar C.S, who is the Manager of Spezia Organic Condiments Pvt. Ltd is the Director of M/s. Headstar Trading LLP and M/s. Headstar Global Pvt. Ltd as well. This is sufficient proof of the fact that the transfers were made in an attempt to cover up the money collected through deception by Spezia Organic Condiments Pvt. Ltd. 5. I heard Adv. M.P. Prasanth, the learned Public Prosecutor also. 6. The question whether a police officer investigating an offence can issue a prohibitory order in respect of the bank account of the accused by exercising the power under Section 102 of the Criminal Procedure Code was answered by the Apex Court for the first time in State of Maharashtra v. Tapas D. Neogy [(1999) 7 SCC 685], in the following words; "12. Having considered the divergent views taken by different High Courts with regard to the power of seizure under Section 102 of the Code of Criminal Procedure, and whether the bank account can be held to be "property" within the meaning of the said Section 102(1), we see no justifica....
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....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." 7. Later, in Teesta Atul Setalvad v. State of Gujarat [(2018) 2 SCC 372], the Supreme Court categorically held that, after the decision in Tapas D. Neogy (supra), there is no room to countenance the challenge of seizure of bank account of a person, found under circumstances creating suspicion of the commission of an offence. Therefore, the question whether the bank accounts can be seized/frozen in exercise of the power under Section 102 of the Code is no longer res integra. What can be looked into is regarding the circumstances under which such power can be exercised. For that, one has to first scrutinise Section 102 of the Criminal Procedure Code, extracted below: "102. 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 whic....
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....r can seize such property which is covered by Section 102(1) and no other." 9. While on the issue it may also be apposite to note the following observations in Shento Varghese v. Julfikar Husen, [(2024) 7 SCC 23]: "16. This requires us to consider whether validity of the seizure order is contingent on compliance with the reporting obligation? In our view, the validity of the power exercised under Section 102(1) CrPC is not dependent on the compliance with the duty prescribed on the police officer under Section 102(3) CrPC. The validity of the exercise of power under Section 102(1) CrPC can be questioned either on jurisdictional grounds or on the merits of the matter. That is to say, the order of seizure can be challenged on the ground that the seizing officer lacked jurisdiction [Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119 : (2020) 3 SCC (Cri) 782] to act under Section 102(1) CrPC or that the seized item does not satisfy the definition of "property" [Swaran Sabharwal v. Delhi Police, 1987 SCC OnLine Del 221 : (1990) 68 Comp Cas 652] or on the ground that the property which was seized could not have given rise to suspicion concerning the commiss....
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.... Court or the Magistrate or represent his case before the Court or Magistrate within a period of fourteen days specified in the show-cause notice, the Court or the Magistrate may proceed to pass the ex parte order. (5) Notwithstanding anything contained in sub-section (2), if the Court or the Magistrate is of the opinion that issuance of notice under the said sub-section would defeat the object of attachment or seizure, the Court or Magistrate may by an interim order passed ex parte direct attachment or seizure of such property, and such order shall remain in force till an order under sub-section (6) is passed. (6) If the Court or the Magistrate finds the attached or seized properties to be the proceeds of crime, the Court or the Magistrate shall by order direct the District Magistrate to rateably distribute such proceeds of crime to the persons who are affected by such crime. (7) On receipt of an order passed under sub-section (6), the District Magistrate shall, within a period of sixty days distribute the proceeds of crime either by himself or authorise any officer subordinate to him to effect such distribution. (8)If there are no claimants to ....