Dharmaraj Bhosale V. The Assistant Director, Directorate of Enforcement, Calicut Sub Zonal Office and Assistant Director of Income Tax (Inv) and The District Police Chief, Vadakara (Rural), Kozhikode District and The Sub Inspector of Police, Koduvally Police Station, Kozhikode District

WP(C)/21545/2014

AI Insights

The case involves a writ petition filed by Dharmaraj Bhosale challenging the action of the police in handing over seized unaccounted money to enforcement authorities without producing it before the Magistrate as per the seizure list. The money, amounting to Rs.1,22,22,200, was found during a police search at the petitioner's residence based on reliable information about unaccounted money. The petitioner questioned the police's authority to transfer the seized money to enforcement authorities without a Magistrate's order. The court clarified the procedural requirements under Section 102 of the Code of Criminal Procedure, 1973, emphasizing the police's accountability to the jurisdictional Magistrate in handling seized articles.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 814686 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-09-2014
• Assessment Year: misc
• Laws Referred To: Foreign Exchange Management Act, 1999, Code of Criminal Procedure, 1973
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: N NAGRESH; P G PREETHA; P VIJAYARAGHAVAN
• Assessee Lawyers: BABU NAIR; SMITHA BABU
• Keywords: FEMA; Police Authority; Seizure of unaccounted money; Enforcement authorities; Accountability in law
• Section: 102; 36

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE TUESDAY, THE 23RD DAY OF SEPTEMBER 2014/1ST ASWINA, 1936 WP(C).No. 21545 of 2014 (P) ---------------------------- PETITIONER : ----------------------- DHARMARAJ BHOSALE, S/O.GANGADHAR BHOSLE,AGED 41 YEARS, SURAJ BHAVAN, VARIKKUZHIYIL THAZHAM, KODUVALLY, KOZHIKODE DISTRICT. BY ADVS.SRI.BABU S. NAIR SMT.SMITHA BABU RESPONDENT(S): ---------------------------- 1. THE ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT, CALICUT SUB ZONAL OFFICE, 3RD FLOOR, KENDRIYA BHAVAN, M.S.BABURAJ ROAD, KALLAI P.O, KOZHIKODE.PIN-673 003 2. ASSISTANT DIRECTOR OF INCOME TAX (INV), 8TH FLOOR, AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE.PIN-673 002 3. THE DISTRICT POLICE CHIEF, VADAKARA(RURAL), KOZHIKODE DISTRICT.PIN-673 101 4. THE SUB INSPECTOR OF POLICE, KODUVALLY POLICE STATION, KOZHIKODE DISTRICT-673 572 R1 & R2 BY ADV. SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL SMT.P.G.PREETHA, ASG R3 & R 4 BY STATE ATTORNEY SRI.P.VIJAYARAGHAVAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22-09-2014, THE COURT ON 23-09-2014 DELIVERED THE FOLLOWING: sts WP(C).No. 21545 of 2014 (P) ---------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT P1 COPY OF THE PAN CARD OF THE PETITIONER HAVING PAN NO.AONPB9446G EXHIBIT P2 COPY OF THE REGISTRATION CERTIFICATE UNDER THE KVAT ACT ISSUED TO THE PETITIONER BY THE COMMERCIAL TAXES OFFICER,IVTH CIRCLE,KOZHIKODE DATED 24/4/2013 EXHIBIT P3 COPY OF THE BANK STATEMENT OF THE PETITIONER OF FEDERAL BANK LTD,KODUVALLY BRANCH FOR THE PERIOD FROM 26/5/2007 TO 11/8/2014 EXHIBIT P4 COPY OF THE BANK STATEMENT OF THE PETITIONER OF THE HDFC BANK,KOZHIKODE BRANCH EXHIBIT P5 COPY OF THE SUMMONS ISSUED TO SMT.UJJALA BHOSLE-THE WIFE OF THE PETITIONER DATED 7/8/2014 EXHIBIT P6 COPY OF THE SUMMONS ISSUED TO SRI.LAVESH RAMACHANDRA SAVANTH - THE SON OF THE UNCLE OF THE PETITIONER DATED 7/8/2014 EXHIBIT P7 COPY OF THE SUMMONS ISSUED TO THE WIFE OF THE PETITIONER BY THE FIRAST RESPONDENT DATED 7/8/2014 RESPONDENT(S)' EXHIBITS AND ANNEXURES: ------------------------------------------------------------------- EXHIBIT R1(A) COPY OF THE REPORT IN RESPECT OF MONTHLY RETURNS FILED BY THE PETITIONER FOR THE YEAR 2012-13 EXHIBIT R1(B) COPY OF THE REPORT IN RESPECT OF MONTHLY RETURNS FILED BY THE PETITIONER FOR THE YEAR 2013-14 EXHIBIT R1(C) COPY OF THE REPORT IN RESPECT OF MONTHLY RETURNS FILED BY THE PETITIONER IN APRIL, 2014 TO JUNE, 2014 ANNEX R4(A) COPY OF THE SEARCH LIST ALONG WITH THE REPORT. /TRUE COPY/ P.S.TO.JUDGE sts A.MUHAMED MUSTAQUE, J. ~~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C).No.21545 of 2014 ~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 23rd day of September, 2014 J U D G M E N T This matter arises a concern how police has to deal with a matter, where police consider they have no exclusive authority to deal with the seized articles. The facts are as stated below: On receipt of reliable information by the District Police Chief, Kozhikode Rural that some unaccounted money was kept in the house owned by the petitioner at Koduvally, the Shadow police team of District Crime Branch reached the spot on 07/08/2014 and informed the matter to the Sub Inspector of Police, Koduvally; after sending advance search memorandum before the Judicial First Class Magistrate Court-I, Thamarassery, the Sub Inspector of Police reached the spot and found large bags (four in number) with cash amounting to Rs.1,22,22,200/- in total and other articles. Search list is produced by the official respondents as Ext.R4(a). The controversy in this writ petition is against the action of the police in handing over the money to the enforcement authorities without producing the same before the Magistrate Court as per the seizure list. 2. This writ petition questions the authority of the police in handing over the money without obtaining orders from the Magistrate. W.P.(C).No.21545/2014 -:2:- 3. The enforcement authority has filed a counter affidavit and a detailed statement has been filed by the police authority also. 4. As it is seen from the counter affidavit filed by the enforcement authority, they are proceeding under the Foreign Exchange Management Act, 1999 (for short, the “FEMA”). This Court is not interdicting any proceedings initiated against the petitioner under FEMA or any other question regarding seizure. The stand in the counter affidavit filed by the enforcement authority is that they are empowered to initiate action under Section 36 of FEMA and also entitled to detain the amount handed over to them by the Police. 5. When police seizes articles suspected to have been involved in an offence not pertaining their jurisdiction, what course of action should be followed by the police, is the question in this writ petition. Every public functionary is accountable in law. The law prescribes the manner in which the accountability should be worked out. The police accountability in seizure under law is prescribed under Section 102 of the Code of Criminal Procedure, 1973 which reads as follows: “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 which may be W.P.(C).No.21545/2014 -:3:- found under circumstances which create suspicion of the Commission of any offence. (2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer acting under sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court or where there is difficulty in securing proper accommodation for the custody of such property, or where the continued retention of the property in police custody may not be considered necessary for the purpose of investigation, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same. Provided that where the property seized under sub- section (1) is subject to speedy and natural decay and if the person entitled to the possession of such property is unknown or absent and the value of such property is less than five hundred rupees, it may forthwith be sold by auction under the orders of the Superintendent of Police and the provisions of Sections 457 and 458 shall, as nearly as may be practicable, apply to the net proceeds of such sale.” W.P.(C).No.21545/2014 -:4:- 6. As has been noted above, under Section 102 of the Civil Procedure Code the Police has an accountability before the jurisdictional Magistrate. It is the Magistrate to decide how to deal with the seized articles. The police cannot decide that the seized articles have to be handed over to the enforcement authorities. No doubt, if the Police has a reasonable cause to believe that some other agency or authority has a right to claim over the seized articles, a report shall be filed before the Magistrate indicating the authority or agency that may likely to claim a right over the seized articles. When a report indicating above is filed by the police officer, the Magistrate is bound to hear that authority before passing an order on the application for release of the seized articles. 7. The enforcement authority, of course, can independently investigate and also can raise claim for seized articles in accordance with FEMA. The local police are not under their command. The local police is not accountable to enforcement authorities. The authority to act upon seized articles must flow from the legal authority prescribed under law. This is essentially required because if there are any discrepancies as to the seized articles, this also has to be adjudicated by the Magistrate. W.P.(C).No.21545/2014 -:5:- 8. In this writ petition, the petitioner seeks release of the amount by the enforcement authorities. That relief cannot be granted to the petitioner, as the right of the petitioner, if any, can only be based on the decision of the jurisdictional Magistrate. Therefore, the petitioner shall approach the competent jurisdictional Magistrate to work out his remedies. However, it is admitted that the amount is lying in the bank account maintained by the enforcement authorities. It will continue to remain in the Bank till a decision is taken by the competent jurisdictional Magistrate. 9. In view of the above, third and fourth respondents shall report seizure of the amount as mentioned in Ext.R4(a) before the competent jurisdictional Magistrate. The competent jurisdictional Magistrate shall consider any application filed by the petitioner or any affected parties for release of the amount only after issuing notice to the enforcement authorities. The writ petition is disposed of as above. No costs. Sd/- A.MUHAMED MUSTAQUE, JUDGE ms "