Kiran Raj

The Supreme Court of India Division Bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra on Wednesday, December 10, held that police and investigating agencies may freeze the bank account of a person facing proceedings under the Prevention of Corruption Act, 1988, by exercising powers under Section 102 of the Code of Criminal Procedure, now reflected as Section 106 of the Bharatiya Nagarik Suraksha Sanhita. In dismissing a challenge arising from a disproportionate-assets investigation against a public servant and family members, the Court set aside a High Court direction to defreeze fixed deposits standing in the name of a relative-accused and clarified that the general seizure power under the CrPC operates independently of, and alongside, the special attachment mechanism incorporated through Section 18A of the PC Act.

Pursuant to a preliminary enquiry by the Anti-Corruption Branch, West Bengal, Sub-Inspector Kalyan Mandal submitted a complaint dated 30 July 2019 alleging that police officer Prabir Kumar Dey Sarkar had amassed movable and immovable properties disproportionate to his known sources of income during the check period 2007–2017. An FIR was registered under Section 13(2) read with 13(1)(b) of the Prevention of Corruption Act, 1988 (PC Act). During investigation, fixed deposits standing in the name of his father, Anil Kumar Dey (the respondent), including joint FDs with family members, were frozen.

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Anil Kumar Dey moved the City Sessions Court, Calcutta seeking de-freezing on grounds of age and illness; the application was rejected on 28 March 2023, noting his failure to show the source of funds. Sanction for prosecution of Prabir Kumar Dey Sarkar was granted on 22 April 2024. A chargesheet dated 13 May 2024 named four accused, including the respondent, and recorded unexplained cash deposits and multiple FD accounts in family names. Cognizance was taken on 14 May 2024.

The respondent challenged the freezing before the Calcutta High Court, which on 4 October 2024 set aside the order, holding that freezing under the PC Act must follow Section 18A and the Criminal Law Amendment Ordinance, 1944, and could not be done under Section 102 CrPC. The State appealed. The dispute centres on whether freezing bank accounts in PC Act proceedings can be done under Section 102 CrPC alongside Section 18A, with reference also to Section 109 IPC and the Ordinance provisions.

The Court first examined the scope of Section 102 CrPC, noting that “Under this Section, property that is alleged/suspected to be stolen; is the object of crime; has a direct link to the commission of the offence, can be seized.” It recorded that “The police have the power to seize passports and bank accounts under this Section” and that “Orders of freezing issued under this Section, can only be in effect to aid investigation.” It further clarified that “The police do not have the power to seize any immovable property” and “It is not an enabling provision under which the police may, to do justice, seize the property and hand it over to whom they believe to be the rightful owner thereof.”

Comparing seizure under Section 102 with attachment under the Ordinance/Section 18A PC Act, the Court stated that “While it is undoubted that in ordinary circumstances, information is to be sent to the Magistrate, in certain circumstances, if that is not done, even then the seizure will not be vitiated. This indicates the width of the power granted to the police with the sole aim of smooth facilitation of the investigation.”

It added: “As evidenced by the procedure given in the Ordinance, it is sequential and has to be compliant with principles of natural justice, for it to survive scrutiny. It is necessarily time consuming and deliberative. The difference between the two processes is, therefore, clearly exhibited.” On that basis, it held: “In essence, we hold that the power of seizure and attachment are separate and distinct, even if, to the naked eye it may so appear, that the effect is same/similar which is, that the property is taken into custody of, by the authority, either investigative or judicial. Consequentially, the conclusion to be drawn is that the powers under Section 18A of the PC Act and Section 102, CrP.C. are not mutually exclusive.”

On the respondent’s reliance on Ratan Babulal Lath, the Court observed: “In our considered view, Ratan Babulal Lath (supra) does not constitute binding precedent for want of (ii) and (iii) since it does not discuss the facts of the matter.” It continued: “However, Courts ought not to be expected to follow judgments and orders of this Court as binding precedents when, the facts, in light of which the conclusion arrived at, are not properly disclosed and discussed, for law is not always applicable as the black letter of the law and is instead applied to the facts of each case.” The Court clarified that “our observations regarding the PC Act do not hold, either way, as to its status as a code. They are only confined to the precedential value of Ratan Babulal Lath (supra).”

Applying these principles, the Court noted that “The respondent is the father of the main accused. Although he had submitted certain responses to the source of the money present in his accounts, the same was not found to be a justifiable explanation by the investigating authorities and as such, seizure was effected.” It recorded that “The release of the funds so seized was rejected by the Trial Court but later accepted by the High Court on the premise that the same had been carried out on an erroneous interpretation of the law. We do not agree.” It concluded: “We have held as above that Section 102, Cr.P.C., being distinct from the powers and procedures as detailed under Section 18-A of the PC Act, would apply to the case.”

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The Court directed: "If the situation is the former, then the respondent herein would either re-deposit the amount or furnish tangible security / bank guarantee of the like amount. This shall be done positively within three weeks from today."

"Rights of the parties emanating from the statute whether in situation (a) or (b) for follow up action are left open to be adjudicated in appropriate proceedings before the appropriate court. The appeal is allowed as aforesaid. Pending application(s), if any, shall be disposed of."

Advocates Representing the Parties

For the Petitioners: Mr. Shadan Farasat, learned senior counsel for the State

For the Respondents: Mr. Siddharth Agarwal, learned senior counsel for the Respondent

Case Title: The State of West Bengal v. Anil Kumar Dey
Neutral Citation: 2025 INSC 1413
Case Number: Criminal Appeal No. 5373 of 2025 (Arising out of SLP(Crl.) No. 1003/2025)
Bench: Justice Sanjay Karol, Justice Prashant Kumar Mishra