Criminal Procedure Code, 1973 – Ss. 105(C) & (E) – Attachment of Property – Assistance in relation to orders of attachment or forfeiture of property – Property derived or obtained directly or indirectly, by any person as a result of criminal activity – derived or used in the commission of an offence – the Chapter was not meant for local offenses or property earned out of local offenses. By Chapter VII A of the Code, the Courts have been given power and jurisdiction to monitor and control investigation with regard to properties which might have been derived or obtained directly or indirectly by any person as a result of Criminal Activities which includes crimes involving currency transfers. The provisions have been incorporated with an intent to curb mischief or completely eliminate terrorist activities and international crimes.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
RAJA VIJAYARAGHAVAN, V., J.
Crl.M.C. No. 2055 of 2016
Dated this the 19 th day of August, 2016
CRL.MP 1204/2015 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-I, KOLLAM DATED 27-10-2015 CRIME NO. 49/2011 OF KILIKOLLOOR POLICE STATION, CBCID CRIME 14/CR/EOW-I/KLM/11, KOLLAM
PETITIONER(S)/ACCUSED NOS.1 & 2
SHINE VIJAYAN AND ANOTHER, KOLLAM
BY ADVS.SRI.C.RAJENDRAN SRI.JOHNSON GOMEZ SRI.S.BIJU (KIZHAKKANELA)
THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, REPRESENTING THE DEPUTY SUPERINTENDENT OF POLICE, (EOW)CB CID, OFFICE OF THE SUPERINTENDENT OF POLICE, CRIME BRANCH, ASRAMOM, KOLLAM DISTRICT.
BY PUBLIC PROSECUTOR SRI.AMJAD ALI
O R D E R
1. The petitioners herein, who are husband and wife, are the accused Nos. 1 and 2 in Crime No.49 of 2011 of Kilikolloor Police Station. They are accused of having committed offence punishable under Section 420 read with 34 of the IPC.
2. In this petition filed under
Section 482 of the Code of Criminal Procedure
(hereinafter referred to as the Code for brevity), the petitioners challenge Annexure-A9 order passed by the learned Magistrate under section 105(C) & (E) of the Code confirming the attachment of an item of property identified to have been derived from the proceeds of a crime.
3. In view of the nature of contentions raised, it is apposite to have a brief look at the allegation based on which the above crime was registered.
(a) The petitioners own separate Audio – Visual Companies abroad and in the course of their business, they purchased electronic items worth more than Rs 2 Crores from Al Mazhar Electronics Company LLC. The business transaction had taken place in the UAE. Towards the value of the said products, separate cheques were issued by the petitioners to their creditor, which were dishonored on presentation. It appears that certain proceeding was initiated in Abu Dhabi, but no such details are forthcoming.
(b) However, a person by name A.K. Masood, apparently the Director of Al Mazhar Electronics, filed a petition before the Superintendent of Police, Kollam requesting for immediate action. The petition was immediately forwarded to the Sub Inspector of Police, Kilikolloor Police Station, who duly registered Crime No.49 of 2011 inter alia under Section 420 read with Section 34 of the IPC.
4. As the alleged fraud involved large sums of money, the case was transferred to the CBCID, Kollam. The Crime was re-registered as Crime No.14/CR/EOW1/KLM/11 and the case was handed over to the Kollam, EOW1 for further investigation.
5. On investigation it was revealed that the petitioners had defrauded several others which included Sayal Afsal Shan, Mahad and Syam Sasidharan and had made wrongful gain to the tune of Crores of rupees.
6. Though the petitioners had made themselves scarce after registration of the Crime, they in course of time surrendered before the learned Magistrate was enlarged on bail.
7. When it appeared from the statement of Syed Afsal Shan that the petitioners were hastily taking steps to dispose of their immovable properties, an application was filed before the learned Magistrate praying for attaching their properties. The learned Magistrate by Annexure 6 order, ordered attachment over all the immovable properties.
8. Aggrieved by the fact that the said order was issued without hearing the petitioners herein, they challenged the same and by Annexure-A8 order the same was set aside by this Court with specific direction to the learned Magistrate to consider the matter afresh after affording the petitioners an opportunity of being heard.
9. It is also borne out from the records that on the failure of the Investigating officer to secure confirmation from the court within a period of 30 days as provided under Section 105 E (1) of the Code, all the other items except an item of property having an extent of 9.55 cents was released. In respect of the above item of property, the learned Magistrate confirmed the order of attachment by Annexure-A9 order which is under challenge in this petition.
10. The learned Counsel appearing for the petitioner and the learned public prosecutor was heard in extenso.
11. It is submitted by the learned Counsel advanced the following contentions.
(a) On facts there was no question of invoking Chapter VII A of the Code as this was a pure commercial dispute between the parties pursuant to the dishonor of two cheques. No request has been obtained from any court or other competent authority to the Central Government so as to invoke the provisions of Chapter VII A of the Code.
(b) Materials before Court revealed that the property was acquired by the petitioner using his own funds in the year 2005 and 2006. The transaction between the parties which allegedly led to the registration of the Crime admittedly were entered into in the year 2010. The cheques were allegedly handed over was pursuant to the said transaction. In view of the above there was no justification in attaching the properties under the premise that the same was derived from the proceeds of a crime.
(c) The mandatory minimum requirement of invocation of Chapter VII A of the Code, is that the property was derived out of “proceeds of crime” as defined under Section 105 A (c) of the Act.
(d) the Court below confirmed the order of attachment on the premise that certain witnesses who were questioned by the police pursuant to the registration of the Crime gave statements that they were also defrauded by the petitioners prior to the year 2005. These statements were relied on to conclude that the property was derived out of proceeds out of Crime. However, the said persons had approached this Court and by Annexure-A6 judgment, this Court has recorded the submission of the said persons that disputes no longer existed and the proceedings were closed.
12. The learned Public prosecutor on the other hand submitted that the property was initially seized and later attached as there was prima facie material to conclude that the same was derived out of proceeds from the Crime. It is further contended that the Investigation is in full swing and request has been made to the overseas authorities to obtain certain materials relevant for the investigation.
13. I have considered the rival submissions.
14. It is evident that the learned Magistrate has relied on the provisions contained in Chapter VII A of the Code of Criminal Procedure while passing Annexure A 9. Chapter VII-A containing Sections 105A to 105L has been inserted in the Code by the Code of Criminal Procedure (Amendment) Act, 1993 (Act No. 40 of 1993), which has come into force w.e.f. 20-7-1993.
15. The statement of objects and reasons for bringing the Chapter VII-A of the Code into statute book are mentioned herein below: