The Supreme Court has stayed the operation of the Calcutta High Court’s direction to defreeze the Respondent’s property in a disproportionate assets investigation, holding that the power of the police u/s 102 of the Code of Criminal Procedure, 1973 (Cr.P.C) to seize or freeze property remains operative even in the cases governed by the Prevention of Corruption Act, 1988 (PC Act).
The bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra has held that the power of attachment in Section 18A of the PC Act, doesn’t replace the investigation power of the police u/s 102 of the Cr.P.C. The Court also held that both powers serve and fulfil distinct purposes and don’t annul each other.
The case stemmed from a preliminary enquiry against the Respondent’s son and his family members was conducted for the assets disproportionate by the Directorate of Anti-Corruption Branch, West Bengal. During the investigation, it was found that several fixed deposits and cash deposits were held by the respondent and his family members to channel money coming from an illegal source. The police, u/s 102 of the Cr.P.C., freeze the fixed deposit. The respondent filed an application before the City Sessions Court, Calcutta, seeking the de-freezing of the fixed deposit.
The Trial Court rejected the application after finding that the respondent had failed to offer a satisfactory explanation for the source of the funds. The Calcutta High Court, however, set aside the Trial Court’s order holding that freezing of property in corruption cases should be undertaken u/s 18A of the PC Act. The High Court relied on Ratan Babulal Lath v. State of Karnataka, (2022) 16 SCC 287. The State challenged this order before the Supreme Court, arguing that Ratan Babulal Lath is not a binding precedent and that the High Court had incorrectly relied on it to direct de-freezing.
The Supreme Court rejected the High Court’s approach and clarified that the power of “seizure” under Section 102 CrPC and the process of “attachment” under the Criminal Law Amendment Ordinance serve different statutory functions and cannot be treated as interchangeable. Seizure enables the investigating agency to temporarily secure suspected assets, whereas an attachment is a formal adjudicatory step that must follow notice and due process. The Court added that fixed deposits qualify as movable property and can therefore be lawfully frozen under Section 102 CrPC.
The Supreme Court examined the High Court’s reliance on the Ratan Babulal Lath, and found that that decision does not constitute a binding ratio under Article 141 because it did not engage in a detailed discussion of the PC Act or its interaction with the CrPC.
Accordingly, the Court set aside the Calcutta High Court’s order and directed the respondents to re-deposit the amount or furnish tangible security or a bank guarantee of a value equivalent to the sum released pursuant to HC’s order.
Appearances:
Petitioner- Senior Advocate Shadan Farasat, AOR Kunal Mimani, and Advcoate Kartikey Bhatt, Abhishek Babbar, Shraddha Chirania
Respondent- Senior Advocate Siddharth Agarwal, AOR Robin Khokhar, Advoccate Anjan Datta, Arshiya Ghose, Ram Bhadauria, Sumon Pathak, Ishita Srivastava, Adarsh Verma, Prithwish Chakraborty, Mr. Debajit Gope
