Santosh Construction V. Union of India through the National Investigation Agency

Cr.A(DB)/154/2023

AI Insights

The case involves M/s Santosh Construction, whose partner, Mritunjay Kumar Singh, was accused of financially supporting the banned terrorist organization CPI (Maoist). Following a violent incident where police were attacked and arms were looted, the National Investigation Agency (NIA) took over the investigation. During the investigation, a substantial amount of unaccounted cash was found in Singh's house, which was seized under the suspicion that it was intended for terrorist activities. The appeal challenged the seizure of this cash, arguing it was legitimate business income, but the court found the explanations unsatisfactory and upheld the seizure.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 801395 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 16-03-2023
• Assessment Year: misc
• Laws Referred To: National Investigation Agency Act, 2008, Unlawful Activities (Prevention) Act, 1967, Arms Act, Criminal Law Amendment Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AMIT DAS
• Assessee Lawyers: INDRAJIT SINHA; SHASHANK PRASAD
• Keywords: Proceeds of terrorism; Seizure of cash; Terrorism; Funding terrorist activities
• Section: 21; 33; 25(3); 25(5)

Judgement Text

"Cr. Appeal (D.B.) No. 154 of 2023 - 1 - IN THE HIGH COURT OF JHARKHAND AT RANCHI Criminal Appeal (D.B.) No. 154 of 2023 ------------- M/s Santosh Construction, through its one of the partner Santosh Kumar Singh, Son of late Ramcharitra Singh, aged about 63 years Resident of Village-Alaudia, P.O. & P.S. – Chandwa, District-Latehar, Jharkhand. … … Appellant Versus Union of India through the National Investigation Agency, having its Camp Office at Quarter No.305, Sector II, P.O. & P.S. Dhurwa, District Ranchi. … … Respondent -------- For the Appellant : Mr. Indrajit Sinha, Advocate Mr. Shashank Shekhar Prasad, Advocate For the Resp. NIA : Mr. Amit Kumar Das, Advocate -------- PRESENT HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD HON’BLE MR. JUSTICE SUBHASH CHAND ------- C.A.V. on 02.03.2023 Pronounced on 16.03.2023 Per Sujit Narayan Prasad, J. The instant appeal has been preferred under Section 21 of the National Investigation Agency Act, 2008 against the order dated 06.01.2023 passed in Criminal Appeal No.90 of 2022 arising out of Special (NIA) Case No.02 of 2020 corresponding to R.C. No.25/2020/NIA/DLI (Chandwa P.S. Case No.158 of 2019) by the learned Additional Judicial Commissioner-XVI-cum-Special Judge, NIA, Ranchi whereby and whereunder the learned court below has been pleased to dismiss the appeal and confirmed the order dated 23.06.2022, passed by the designated authority by which the designated authority has confirmed the order of seizure of cash. Cr. Appeal (D.B.) No. 154 of 2023 - 2 - 2. The prosecution story in brief as per the allegation made in the F.I.R. being Chandwa P.S. Case No.158 of 2019 is that on 22.11.2019, at approx. 20:00 hours, a patrolling police party of Chandwa Police Station consisting of ASI, Sukra Oraon, Home Guard/662, Sakindra Singh, Home Guard/499, Shambhu Prasad, Home Guard/Dvr., Yamuna Prasad & Home Guard/10476, Dinesh Ram in patrolling PCR Government Vehicle, TATA Safari bearing Registration No. JH-19B-0716, stopped at Lukuiya Mode at Chandwa. The cadres of banned terrorist organization i.e., CPI (Maoist) who were waiting in advance, fired indiscriminately at the Police Patrolling Party and killed 4 Police Personnel. Later, they looted the Government issued Arms and Ammunition i.e. one (01) Pistol, ten (10) rounds of 9mm Ammunition, three .303 Rifles, with 150 Rounds, from the martyred Police Personnel, shouted slogans of \"Maowadi Zindabad\" and escaped from the place of incident. Later, one of the Home Guards namely Dinesh Ram, who had escaped un- hurt, went to Chandwa P.S. and lodged a complaint against 18 named accused persons and some unknown persons. The case was registered and numbered as Chandwa P.S. case no. 158 of 2019 dated 23.11.2019. It appears from the record that after investigation, the Police submitted the charge sheet being Charge Sheet No. 58 of 2020 on 02.07.2020 against six accused persons namely Baijnath Ganjhu, Sunil Ganjhu @ Mangra, Rajesh Kumar Cr. Appeal (D.B.) No. 154 of 2023 - 3 - Ganjhu, Sanjay Ganjhu, Naresh Ganjhu and Faguna Ganjhu. The Central Government, taking into consideration the gravity of the offence, in exercise of the power conferred under sub-section (5) of Section 6 read with Section 8 of the National Investigation Agency Act, 2008, has directed the NIA to take up the investigation of the case, vide M.H.A. New Delhi, CTCR Division Order No. 11011/42/2020/NIA dated 22.06.2020 and accordingly, Chandwa P.S. Case No. 158 of 2019 dated 23.11.2019 was re-registered as RC 25/2020/NIA/DLI dated 24.06.2020 under Sections 147, 148, 149, 452, 302, 353 and 379 of the Indian Penal Code, Section 27 of the Arms Act, Section 17(i) & (ii) of Criminal Law Amendment Act and Sections 10, 13, 17 and 18 of Unlawful Activity (Prevention) Act, 1967 against 18 named accused persons and others. During investigation of NIA, role of Mritunjay Kumar Singh, son of appellant Santosh Kumar Singh (A-8) emerged and it came to knowledge that since 2012 he was in contact with Maovadi Ravindra Ganjhu and he used to provide financial assistance to proscribed terrorist organisation. On 21.11.2019, a day before of Lukuiya More incident, the petitioner alongwith Shivnath Yadav, Abul Ansari and Ravi Ranjan @ Pintu Singh went to Bearjangha forest and met Ravindra Ganjhu (A-14) where Ravindra Ganjhu apart from other discussions asked the petitioner to give terror fund amounting to Rs. 20 lacs, out of Rs.20 lacs petitioner Cr. Appeal (D.B.) No. 154 of 2023 - 4 - settled for Rs.12 lacs and assured Ravindra Ganjhu for helping his wife in getting bail. Thereafter, A-8 Mrityunjay Singh paid Rs.2 lakhs to A-14 and returned. It further transpired during investigation and on the basis of confession of co-accused persons search was conducted on 10.10.2020 on eight places and incriminating materials and documents were recovered. During search in the house of accused Mritunjay Singh A-8 unaccounted money Rs.2,64,42,000/- and other incriminating materials were seized. On 30.01.2021 search was further conducted at five places of Mritunjay Singh @ Sonu A-8, Lal Bipin Nath Sahdeo, Akhilesh Kumar Singh and Amresh Kumar Singh. On 10.10.2020 during search when Rs.2,64,42,000/- was recovered Investigation was made and it was revealed that he is one of the partners of appellant firm M/s Santosh Construction. It further revealed in the investigation when asked about source of money recovered from his house, Mritunjay Kumar Singh (A-8) stated that the money was income from vehicle pertaining to M/s Santosh Construction, Santosh Kumar Singh and A-8 had withdrawn the money from the bank account of M/s Santosh Construction and sum of money were taken as loan from their family members and business entities. It has been submitted by Mritunjay Kumar Singh (A- 8) that out of Rs.2.64 Crore, Rs.1.68 Crore was withdrawn from the bank accounts of M/s Santosh Construction from Cr. Appeal (D.B.) No. 154 of 2023 - 5 - 01.04.2020 to 09.10.2020. Rest Rs. 20 lakhs were earned from the vehicle pertaining to M/s Santosh construction and from May 2020 to 9th October 2020, Rs.10,80,000/-was earned from the vehicles pertaining to Mrityunjay Kumar Singh and Santosh Kumar Singh, Rs.67 lakhs were taken on credit from others from April 2020 to October 2020 and he provided list of eighteen persons from whom he had taken money as loan / credit and Rs.75,00,000/- was closing balance (cash in hand) as on 31.3.2020. The aforesaid recovered amount has been seized in accordance with the provision of Section 25(5) of the Unlawful Activities (Prevention) Act, 1967 (hereinafter to be referred to as the Act, 1967). The investigating agency has seized the said amount which has been affirmed by the designated authority after rejecting the representation filed by the appellant under Section 25(3) of the Act, 1967 on being prima facie satisfied that the cash amounting to Rs.2,64,42,000/- represents the proceeds of terrorism. The appellant, being aggrieved by the said order dated 23.06.2022, has assailed the same before the Special Court and after hearing the parties, the learned Special Court has refused to interfere with the order of the designated authority dated 23.06.2022 by dismissing the criminal appeal being Criminal Appeal No.90 of 2022 against which the present appeal has been preferred under Section 21(4) of the National Investigation Agency Act, 2008. Cr. Appeal (D.B.) No. 154 of 2023 - 6 - 3. Mr. Indrajit Sinha, learned counsel for the appellant, has submitted that the designated authority, while confirming the seizure of amount to the tune of Rs.2,64,42,000/-, has not considered the explanation furnished by the appellant wherein it has been stated that as per the cashbook Rs.1,78,45,734/- was of M/s. Santosh Construction, Rs.17,30,310/- was of collection of transport business of Sri Santosh Kumar Singh and Mrityunjay Kumar Singh, Rs.68,89,000/- was of loan which was taken from family friends. It has been stated that since the appellant is Class-1 construction company and that period of time 4 Road construction work was going on and for making payment of daily wagers as well as miscellaneous expenditures, the seized amount was retained. It has been submitted that M/s Santosh Construction is a class I Government Contractor, working for the last 40 years and the entire accounts of M/s Santosh Construction is with the State Bank of India and the Punjab National Bank but the accounts of these banks being operated in the name of M/s. Santosh Construction, has been frozen by the National Investigation Agency in connection with RC 25/2020/NIA/DLI against which a writ petition was filed being W.P.(Cr.) No. 205 of 2021 which was disposed of vide order dated 02.08.2022 with the direction to move before appropriate forum and being aggrieved by the order dated 02.08.2022, the appellant moved before the Hon’ble Supreme Cr. Appeal (D.B.) No. 154 of 2023 - 7 - Court by way of filing SLP No. 9998 of 2022 and on 03.01.2023 the Hon’ble Supreme Court has been pleased to dispose of the SLP with a direction to NIA to complete the investigation with respect to bank accounts in question. But in the meanwhile, the recovered amount of Rs.2,64,42,000/- was attached by the NIA and a proceeding under Section 25 of the UAP Act has been initiated which was without appreciating the fact about the known sources of income. It has been further submitted that all these facts have been produced before the learned Special Judge but without considering the same in right perspective, the decision of the designated authority dated 23.06.2022 confirming the seizure of the said amount has dismissed the appeal and, as such, the order passed by the Special Judge is not just and proper and fit to be quashed and set aside. 4. Per contra, Mr. Amit Kumar Das, learned counsel appearing for the NIA, has submitted that the exercise has been taken by the investigating agency in terms of the power conferred under Section 25 of the Act, 1967 after giving proper opportunity to the appellant to explain the source of the amount kept in the house to the tune of Rs.2,64,42,000/-. The explanation has been furnished whereby and whereunder justification has been made about taking loan from different persons by way of loan/credit but when the investigating agency has investigated individually, the person claimed to have given the money as loan/credit, Cr. Appeal (D.B.) No. 154 of 2023 - 8 - has specifically stated before the investigating agency on the question being put that why the money has been given in cash and not through cheque but no satisfactory answer was provided. It transpires from the investigation made with one Vachaspati Sharma accountant of M/s Santosh construction who has denied that he has given cash loan Rs.1,95,000/- to either Santosh Kumar Singh or his son Mrityunjay Kumar Singh. Another person, namely, Yogendra Kumar Singh has stated that Mrityunjay Kumar Singh has never asked for any loan nor he had given any loan to him. However, he gave Rs.1,98,000/- to his daughter namely Priya Singh wife of Manish Kumar another son of appellant. One person Bhola Khan, who happens to be contractor, has denied that he had given cash amounting to Rs.1,92,000/- as loan either to petitioner/ appellant Santosh Kumar Singh or Mrityunjay Kumar Singh. It has been submitted that the investigating agency has verified from the income tax returns and capital account of M/s Santosh construction and its partner and in course thereof it emerged that Rs. 1.15 crores were infused in the account of M/s Santosh construction as capital of Akhilesh Kumar Singh, Amresh Kumar Singh and Lal Bipin Nath Sahdev, all are partners of M/s Santosh construction in the assessment year 2019-20 and Rs.3.32 crore were infused in the account of firm as capital of the partners in the Cr. Appeal (D.B.) No. 154 of 2023 - 9 - assessment year 2018-19. It has also been surfaced that huge amount was shown as expenses under the head sub- contractors. It has also come that on examination of the sub- contractors namely Vachaspati Sharma, Bhola Khan and Wasim have denied to have worked as sub-contractors and not paid any money. It has also been revealed in course of investigation that Amresh Kumar Singh had 5% share in M/s Santosh construction and he invested capital of Rs.94,80,500/- in the account of the firm from year 2018-19 to 2019-20. On the analysis of the Individual ITR Amresh Kumar Singh it is revealed to the CIO that gross total income of Amresh Kumar Singh is 33 lakhs from assessment year 2018-19 to 2019-20 and when he was asked about capital infusion about 95 lakh he could not give satisfactory answer. Further when the role of Akhilesh Kumar Singh was investigated by CIO, it was found that 10% share in partnership of M/s Santosh construction belongs to him. He infused capital of Rs.1.17 crores in the account of company from assessment year 2018-19 to 2019-20. On the analysis of the ITR of Akhilesh Kumar Singh it is surfaced that his gross total income in the assessment year 2018-19 and 2019-20 was Rs.35 lakhs which also mostly come from the M/s Santosh construction and he also could not explain properly. In the same manner Lal Bipin Nath Sahdeo one of the partner of M/s. Santosh construction who got 5% share in the appellant firm infused Rs.93 lakhs in the account of the firm Cr. Appeal (D.B.) No. 154 of 2023 - 10 - in the year 2018-19 to 2019-20. On analysis of the individual ITR by CIO, it was found that his income was Rs.30 lakhs from the year 2018-19 to 2019-20 and most of the part of the income comes from M/s Santosh Construction and he did not explain properly. During investigation it was also found that huge amount was deposited in the bank account of the M/s Santosh construction and also in the bank account of his partners and money was transferred from one bank account of the firm or partners to another accounts of the firm and partners and several other accounts of the various persons and on the request of CIO six Bank accounts of appellant Firm have been frozen. Mr. Amit Kumar Das, on the basis of the aforersaid fact, has submitted that in the aforesaid background, the designated authority has taken decision under Section 25(3) of the Act, 1967 and the Special Court, after taking into consideration the fact which has been surfaced in course of investigation considering the said amount as proceeds of terrorism or to be used in the terrorism, has declined to interfere with the decision of the designated authority dated 23.06.2022. He has further submitted that since Mritunjay Kumar Singh happens to be the partner who is admittedly an accused in RC 25/2020/NIA/DLI and, as such, the amount which has been recovered from his house and having not disclosed the proper accounts of keeping the money in his Cr. Appeal (D.B.) No. 154 of 2023 - 11 - house in cash and if at this moment the amount will be directed to be released, the effect of the same will be that the same will be utilized in the terrorist activities and, therefore, keeping that fact into consideration, the learned Special Judge has declined to interfere with the order passed by the designated authority and the same cannot be said to suffer from an error. 5. We have heard the learned counsel for the parties, perused the documents available on record as also the finding recorded by the learned Special Judge in the impugned order. 6. Before proceeding, this Court deems it fit and proper to deal with some provisions of the Unlawful Activities (Prevention) Act, 1967 vis-à-vis National Investigation Agency Act, 2008. The U.A.(P) Act is now the primary anti-terrorist law in force in India. It was enacted by Parliament in 1967. The original Act was targeted at unlawful activities of a general nature, and stringent provisions on terrorism were added only later through various amendments starting in 2004, following POTA’s repeal. It was subsequently amended in 2008 in response to the Mumbai terrorist attacks. The amended UAPA incorporated the definition of a “terrorist act” under Section 15 and created new terrorist offence. The most recent amendments were made in 2013, which dealt largely with the economic and financial aspects of terrorism. By Cr. Appeal (D.B.) No. 154 of 2023 - 12 - virtue of Unlawful Activities (Prevention) of Amendment Act, 2012, the “terrorist act” has been defined under U.A.(P) Act, 1967 under Section 2(k) which reads as under :- “2(k) “terrorist act” has the meaning assigned to it in section 15, and the expressions “terrorism” and “terrorist” shall be construed accordingly.” The “terrorist gang” has been defined under Section 2(l) which reads as under :- “(l) “terrorist gang” means any association, other than terrorist organisation, whether systematic or otherwise, which is concerned with, or involved in, terrorist act.” The “terrorist organization” has been defined under Section 2(m) which reads as under :- “(m) “terrorist organisation” means an organisation listed in the Schedule or an organisation operating under the same name as an organisation so listed.” The “unlawful activity has been defined under Section 2(o) which reads as under :- “(o) “unlawful activity”, in relation to an individual or association, means any action taken by such individual or association (whether by committing an act or by words, either spoken or written, or by signs or by visible representation or otherwise),— (i) which is intended, or supports any claim, to bring about, on any ground whatsoever, the cession of a part of the territory of India or the secession of a part of the territory of India from the Union, or which incites any individual or group of individuals to bring about such cession or secession; or (ii) which disclaims, questions, disrupts or is intended to disrupt the sovereignty and territorial integrity of India; or (iii) which causes or is intended to cause disaffection against India.” Cr. Appeal (D.B.) No. 154 of 2023 - 13 - It is evident from the definition of “terrorist organization” that it means an organisation listed in the Schedule or an organisation operating under the same name as an organisation so listed, meaning thereby, the applicability of penal offence as mandated under the provision of U.A.(P) Act, 1967 will only be applicable to a terrorist organization which has been listed in Schedule-I. The “terrorist gang” means any association, other than terrorist organisation, whether systematic or otherwise, which is concerned with, or involved in, terrorist act. If the definition of “terrorist organization” as contained under Section 2(m) and “terrorist gang”, as stipulated under the provision of Section 2(l) are read conjointly, it would be evident that if the organization has not been listed in Schedule as contained in U.A.(P) Act, 1967, even then the penal offence would be attracted against a gang which is concerned with, or involved in, terrorist act. The “terrorist act” has been defined under Section 2(k) has the meaning assigned to it in Section 15. Section 15 contains the activities which will be treated to be a “terrorist act”. Section 15 reads as under :- “15. Terrorist act.—4(1) Whoever does any act with intent to threaten or likely to threaten the unity, integrity, security, economic security, or sovereignty of India or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any foreign country,— (a) by using bombs, dynamite or other explosive Cr. Appeal (D.B.) No. 154 of 2023 - 14 - substances or inflammable substances or firearms or other lethal weapons or poisonous or noxious gases or other chemicals or by any other substances (whether biological radioactive, nuclear or otherwise) of a hazardous nature or by any other means of whatever nature to cause or likely to cause— (i) death of, or injuries to, any person or persons; or (ii) loss of, or damage to, or destruction of, property; or (iii) disruption of any supplies or services essential to the life of the community in India or in any foreign country; or (iiia) damage to, the monetary stability of India by way of production or smuggling or circulation of high quality counterfeit Indian paper currency, coin or of any other material; or] (iv) damage or destruction of any property in India or in a foreign country used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies; or (b) overawes by means of criminal force or the show of criminal force or attempts to do so or causes death of any public functionary or attempts to cause death of any public functionary; or (c) detains, kidnaps or abducts any person and threatens to kill or injure such person or does any other act in order to compel the Government of India, any State Government or the Government of a foreign country or an international or inter-governmental organisation or any other person to do or abstain from doing any act; or commits a terrorist act. [Explanation.—For the purpose of this sub-section,— (a) “public functionary” means the constitutional authorities or any other functionary notified in the Official Gazette by the Central Government as public functionary; (b) “high quality counterfeit Indian currency” means the counterfeit currency as may be declared after examination by an authorised or notified forensic authority that such currency imitates or compromises Cr. Appeal (D.B.) No. 154 of 2023 - 15 - with the key security features as specified in the Third Schedule.] (2) The terrorist act includes an act which constitutes an offence within the scope of, and as defined in any of the treaties specified in the Second Schedule. As per the provision of Section 15, whoever has acted with intent to threaten or likely to threaten the unity, integrity, security, economic security, or sovereignty of India or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any foreign country would be covered under the definition of “terrorist act”. This provision, therefore, stipulates that any activity with an intent to strike terror or likely to strike terror will come under the fold of terrorist act if done to threaten the unity, integrity, security, sovereignty of India or economic security, which has been inserted by way of Act 3 of 2013 with effect from 01.02.2013. Section 17 provides punishment for raising funds for terrorist act which reads as under :- “17. Punishment for raising funds for terrorist act.—Whoever, in India or in a foreign country, directly or indirectly, raises or provides funds or collects funds, whether from a legitimate or illegitimate source, from any person or persons or attempts to provide to, or raises or collects funds for any person or persons, knowing that such funds are likely to be used, in full or in part by such person or persons or by a terrorist organisation or by a terrorist gang or by an individual terrorist to commit a terrorist act, notwithstanding whether such funds were actually used or not for commission of such act, shall be punishable with Cr. Appeal (D.B.) No. 154 of 2023 - 16 - imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine. Explanation.—For the purpose of this section,— (a) participating, organising or directing in any of the acts stated therein shall constitute an offence; (b) raising funds shall include raising or collecting or providing funds through production or smuggling or circulation of high quality counterfeit Indian currency; and (c) raising or collecting or providing funds, in any manner for the benefit of, or, to an individual terrorist, terrorist gang or terrorist organisation for the purpose not specifically covered under section 15 shall also be construed as an offence. It is evident from the contents of Section 17 of the Act, 1967 that whoever, in India or in a foreign country, directly or indirectly, raises or provides funds or collects funds, whether from a legitimate or illegitimate source, from any person or persons or attempts to provide to, or raises or collects funds for any person or persons, knowing that such funds are likely to be used, in full or in part by such person or persons or by a terrorist organisation or by a terrorist gang or by an individual terrorist to commit a terrorist act, notwithstanding whether such funds were actually used or not for commission of such act, the same would be covered under the aforesaid provision. Meaning thereby, raising of funds directly or indirectly to commit a terrorist act by a terrorist organization or by terrorist gang or by an individual terrorist, irrespective of the fact whether this was actually used for commission of such act, would be punishable under Cr. Appeal (D.B.) No. 154 of 2023 - 17 - Section 17. Sub-section (c) of Section 17 of the Act, 1967 enlarges the scope of the terrorist act since the same provides that any act for the benefit of an individual terrorist, terrorist gang or terrorist organisation even if not specifically covered under Section 15 shall also be construed as an offence. Section 22(A) of the Act, 1967 stipulates about the provision for commission of offence by companies which reads as under :- “22A. Offences by companies.—(1) Where an offence under this Act has been committed by a company, every person (including promoters of the company) who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person (including promoters) liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised reasonable care to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any promoter, director, manager, secretary or other officer of the company, such promoter, director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.—For the purposes of this section,— Cr. Appeal (D.B.) No. 154 of 2023 - 18 - (a) “company” means any body corporate and includes a firm or other association of individuals; and (b) “director”, in relation to a firm, means a partner in the firm.” It is evident from the aforesaid provision that where an offence under this Act has been committed by a company, every person (including promoters of the company) who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Meaning thereby, the main ingredient for attracting the aforesaid provision will be in the case when the offence has been committed by a company and in that circumstances whoever is connected with the affairs of the company shall be deemed to be guilty of the offence. Section 25 of the Act, 1967 confers power upon the investigating officer and designated authority that if there is a reason to believe that any property in relation to which an investigation is being conducted, represents proceeds of terrorism, he shall, with the prior approval in writing of the Director General of the Police of the State seize such property. Sub-Section (3) thereof provides power to the designated authority either to confirm or revoke the order of seizure or attachment so issued within a period of sixty days. Cr. Appeal (D.B.) No. 154 of 2023 - 19 - For ready reference, Section 25 of the Act, 1967 is quoted hereunder as:- “25. Powers of investigating officer and Designated Authority and appeal against order of Designated Authority.—(1) If an officer investigating an offence committed under Chapter IV or Chapter VI, has reason to believe that any property in relation to which an investigation is being conducted, represents proceeds of terrorism, he shall, with the prior approval in writing of the Director General of the Police of the State in which such property is situated, make an order seizing such property and where it is not practicable to seize such property, make an order of attachment directing that such property shall not be transferred or otherwise dealt with except with the prior permission of the officer making such order, or of the Designated Authority before whom the property seized or attached is produced and a copy of such order shall be served on the person concerned. (2) The investigating officer shall duly inform the Designated Authority within forty-eight hours of the seizure or attachment of such property. (3) The Designated Authority before whom the seized or attached property is produced shall either confirm or revoke the order of seizure or attachment so issued within a period of sixty days from the date of such production: Provided that an opportunity of making a representation by the person whose property is being seized or attached shall be given. (4) In the case of immovable property attached by the investigating officer, it shall be deemed to have been produced before the Designated Authority, when the investigating officer notifies his report and places it at the disposal of the Designated Authority. (5) The investigating officer may seize and detain any cash to which this Chapter applies if he has reasonable grounds for suspecting that— (a) it is intended to be used for the purposes of terrorism; or Cr. Appeal (D.B.) No. 154 of 2023 - 20 - (b) it forms the whole or part of the resources of a terrorist organisation: Provided that the cash seized under this sub-section by the investigating officer shall be released within a period of forty-eight hours beginning with the time when it is seized unless the matter involving the cash is before the Designated Authority and such Authority passes an order allowing its retention beyond forty-eight hours. Explanation.—For the purposes of this sub-section, “cash” means— (a) coins or notes in any currency; (b) postal orders; (c) traveller’s cheques; (ca) credit or debit cards or cards that serve a similar purpose; (d) banker’s drafts; and (e) such other monetary instruments as the Central Government or, as the case may be, the State Government may specify by an order made in writing. (6) Any person aggrieved by an order made by the Designated Authority may prefer an appeal to the court within a period of thirty days from the date of receipt of the order, and the court may either confirm the order of attachment of property or seizure so made or revoke such order and release the property.” Section 33 thereof pertains to forfeiture of property of certain persons which provides that where any person is accused of an offence under Chapter IV or Chapter VI, it shall be open to the court to pass an order that all or any of the properties, movable or immovable or both, belonging to him, shall, during the period of such trial, be attached, if not already attached under this Chapter. For ready reference, the provision of Section 33 is referred hereunder as :- “33. Forfeiture of property of certain persons.—(1) Where any person is accused of an offence under Cr. Appeal (D.B.) No. 154 of 2023 - 21 - Chapter IV or Chapter VI, it shall be open to the court to pass an order that all or any of the properties, movable or immovable or both, belonging to him, shall, during the period of such trial, be attached, if not already attached under this Chapter. (2) Where a person has been convicted of any offence punishable under Chapter IV or Chapter VI, the court may, in addition to awarding any punishment, by order in writing, declare that any property, movable or immovable or both, belonging to the accused and specified in the order, shall stand forfeited to the Central Government or the State Government, as the case may be, free from all encumbrances. (3) Where any person is accused of an offence concerning high quality counterfeit Indian currency, the court may pass an order directing attachment or forfeiture, as the case may be, of property equivalent to the value of such high quality counterfeit Indian currency involved in the offence including the face value of such currency which are not defined to be of high quality, but are part of the common seizure along with the high quality counterfeit Indian currency. (4) Where a person is accused of an offence punishable under Chapter IV or Chapter VI, the court may pass an order directing attachment or forfeiture, as the case may be, of property equivalent to or the value of the proceeds of terrorism involved in the offence. (5) Where any person is accused of an offence under Chapter IV or Chapter VI, it shall be open to the court to pass an order that all or any of the property, movable or immovable or both, belonging to him shall, where the trial under the Act cannot be concluded on account of the death of the accused or being declared a proclaimed offender or for any other reason, be confiscated on the basis of material evidence produced before the court.” 7. The reference of the National Investigation Agency Act, Cr. Appeal (D.B.) No. 154 of 2023 - 22 - 2008 is also required to be made since further investigation has been directed to be conducted by the NIA in the instant case. The NIA Act, 2008 has come into being in order to constitute an investigation agency at the national level to investigate and prosecute offences affecting the sovereignty, security and integrity of India, security of State, friendly relations with foreign States and offences under Acts enacted to implement international treaties, agreements, conventions and resolutions of the United Nations, its agencies and other international organisations and for matters connected therewith or incidental thereto. The constitutional validity of the NIA Act was challenged before the Bombay High Court by an accused in the Malegaon bomb blast case on the ground of lack of legislative competence of Parliament to enact such law. The Bombay High Court upheld the constitutional validity of the NIA Act and while doing so, it has been held that the NIA has been created as an investigating agency at the national level to investigate and prosecute offences affecting the sovereignty, security and integrity of India and other matters such as friendly relations with the foreign States. This was not akin to setting up of a police force. Further, the court concluded that Parliament had the legislative competence to enact the NIA Act and the Parliament can enact the laws in matters not covered under the list. Cr. Appeal (D.B.) No. 154 of 2023 - 23 - The court looked at several entries that would enable the Parliament to enact such a law from List-I that allows the Parliament to set-up CBI and two of the concurrent list dealing with the criminal law and criminal procedure respectively. Further, the court has held that since the Parliament is not incompetent for enacting law for the police force in the union territories it could also set up and agency as NIA to deal with the offences which include offences that are within the domain of the Centre related to hijacking and weapons of mass destruction. Section 6 of the NIA Act, 2008 contains provision pertaining to investigation of Scheduled offences which reads as under :- “6. Investigation of Scheduled Offences.—(1) On receipt of information and recording thereof under section 154 of the Code relating to any Scheduled Offence the officer-in-charge of the police station shall forward the report to the State Government forthwith. (2) On receipt of the report under sub-section (1), the State Government shall forward the report to the Central Government as expeditiously as possible. (3) On receipt of report from the State Government, the Central Government shall determine on the basis of information made available by the State Government or received from other sources, within fifteen days from the date of receipt of the report, whether the offence is a Scheduled Offence or not and also whether, having regard to the gravity of the offence and other relevant factors, it is a fit case to be investigated by the Agency. (4) Where the Central Government is of the opinion that the offence is a Scheduled Offence and it is a fit Cr. Appeal (D.B.) No. 154 of 2023 - 24 - case to be investigated by the Agency, it shall direct the Agency to investigate the said offence. (5) Notwithstanding anything contained in this section, if the Central Government is of the opinion that a Scheduled Offence has been committed which is required to be investigated under this Act, it may, suo motu, direct the Agency to investigate the said offence. (6) Where any direction has been given under sub- section (4) or sub-section (5), the State Government and any police officer of the State Government investigating the offence shall not proceed with the investigation and shall forthwith transmit the relevant documents and records to the Agency. (7) For the removal of doubts, it is hereby declared that till the Agency takes up the investigation of the case, it shall be the duty of the officer-in-charge of the police station to continue the investigation. It has been provided in the provision of Section 6 that on receipt of information and recording thereof under section 154 of the Code of Criminal Procedure relating to any Scheduled Offence the officer-in-charge of the police station shall forward the report to the State Government forthwith and on receipt of report from the State Government, the Central Government shall determine on the basis of information made available by the State Government or received from other sources, within fifteen days from the date of receipt of the report, whether the offence is a Scheduled Offence or not and also whether, having regard to the gravity of the offence and other relevant factors, it is a fit case to be investigated by the Agency. Where the Central Government is of the opinion that the offence is a Scheduled Offence and it Cr. Appeal (D.B.) No. 154 of 2023 - 25 - is a fit case to be investigated by the Agency, it shall direct the Agency to investigate the said offence. The Central Government has also got power in view of the provision of Sub-Section (5) or Sub-Section (6) that if the Central Government is of the opinion that a Scheduled Offence has been committed which is required to be investigated under this Act, it may, suo motu, direct the Agency to investigate the said offence. In such circumstances, the State Government and any police officer of the State Government investigating the offence shall not proceed with the investigation and shall forthwith transmit the relevant documents and records to the Agency. Section 7 provides power to transfer investigation to the State Government as also Section 8 provides power to investigate connected offences. Section 21 provides provision for appeal whereunder an appeal shall lie from any judgment, sentence or order, not being an interlocutory order, of a Special Court to the High Court both on facts and on law. Therefore, in pursuance to the provision of Section 21, the appellate court is to exercise its appellate power both on facts and law. 8. In the background of the facts/legal position stated hereinabove, the issues which require consideration are – (i) Whether the order of the designated authority confirming the order of seizure of an amount of Rs.2,64,42,000/- from the house of the accused in Cr. Appeal (D.B.) No. 154 of 2023 - 26 - connection with RC 25/2020/NIA/DLI can be said to suffer from an error? (ii) The order passed by the learned Special Judge declining to interfere with the order dated 23.06.2022 passed by the designated authority suffers from an error? 9. Both the issues since are interlinked with each other, therefore, the same are being answered together. The fact of this case is that initially Chandwa P.S. Case No.158 of 2019 was instituted in which chargesheet has also been submitted but subsequent thereto, the Central Government, in exercise of power conferred under Section 6(5) of the NIA Act, 2008, has taken over the investigation in order to hand over it to the NIA. The NIA has started the investigation by re-registering the case being RC 25/2020/NIA/DLI dated 24.06.2020 under Sections 147, 148, 149, 452, 302, 353 and 379 of the Indian Penal Code, Section 27 of the Arms Act, Section 17(i) & (ii) of Criminal Law Amendment Act and Sections 10, 13, 17 and 18 of Unlawful Activity (Prevention) Act, 1967 against 18 named accused persons and others. In course of investigation, the role of son of the appellant Santosh Kumar Singh namely Mritunjay Kumar Singh (A-8) emerged since his involvement has been acknowledged that since 2012 he was in contact with Maovadi Ravindra Ganjhu, a banned terrorist organization, Cr. Appeal (D.B.) No. 154 of 2023 - 27 - and he used to provide financial assistance to proscribed terrorist organization. Immediately after the appellant has been made an accused, the house was searched and in course thereof cash amounting to Rs.2,64,42,000/- was recovered and seized. The ground under which the order passed by the designated authority has been challenged is non- consideration of the explanation furnished by the appellant justifying the retention of the huge amount of Rs.2,64,42,000/- in cash in his house. The ground has been taken about taking loan from several contractors or the family members. It appears from the investigation conducted by the investigating agency having taken note of by the learned Special Judge that on explanation being furnished justifying the retention of the huge amount of Rs.2,64,42,000/- in cash in his house it has been found by the investigating agency who examined seventeen persons from whom appellant firm claimed to have taken loan. Fourteen persons have stated that they had given money as loan credit. On being asked and as why they had given money in cash and not through cheque, no satisfactory answer was provided. One Vachaspati Sharma accountant of M/s Santosh construction has denied that he has given cash loan Rs.1,95000/- to either Santosh Kumar Singh or his son Mrityunjay Kumar Singh. Another person Yogendra Kumar Singh stated that Mrityunjay Kumar Cr. Appeal (D.B.) No. 154 of 2023 - 28 - Singh has never asked for any loan nor he had given any loan to him. However, he gave Rs.19,8000/- to his daughter namely Priya Singh wife of Manish Kumar another son of appellant. One person Bhola Khan contractor denied that he had given cash Rs.19,2000/- as loan either to appellant Santosh Kumar Singh or Mrityunjay Kumar Singh. The investigating officer, during investigation verified income tax return and capital account of M/s Santosh construction and its partner. It emerged that Rupees 1.15 crores were infused in the account of M/s Santosh construction as capital of Akhilesh Kumar Singh, Amresh Kumar Singh and Lal Bipin Nath Sahdev, all partners of M/s Santosh construction in the assessment year 2019-20 and Rs.3.32 crore were infused in the account of firm as capital of the partners in the assessment year 2018-19. It has also been found that huge amount was shown as expenses under the head sub- contractors. On examination of the sub-contractors namely Vachaspati Sharma, Bhola Khan and Wasim have denied to have worked as sub-contractors and not paid any money. Investigation has also revealed that Amresh Kumar Singh had 5% share in M/s Santosh construction and he invested capital of Rs.94,80,500/- in the account of the firm from year 2018-19 to 2019-20. On the analysis of the Individual ITR Amresh Kumar Singh it is revealed to the CIO that gross total income of Amresh Kumar Singh is 33 lakhs from assessment year 2018-19 to 2019-20 and most of the income comes from Cr. Appeal (D.B.) No. 154 of 2023 - 29 - M/s Santosh Construction when he was asked about capital infusion about 95 lakh he could not give satisfactory answer. Further when the role of Akhilesh Kumar Singh was investigated by CIO, it was found that 10% share in partnership of M/s Santosh construction belongs to him. He infused capital of Rs.1.17 crores in the account of company from assessment year 2018-19 to 2019-20. On the analysis of the instant ITR of Akhilesh Kumar Singh it is surfaced that his gross total income in the assessment year 2018-19 and 2019-20 was Rs.35 lakhs which also mostly come from the M/s Santosh construction and he also could not explain properly. In the same manner Lal Bipin Nath Sahdeo one of the partner of Santosh construction who got 5% share in the appellant firm infused Rs.93 lakhs in the account of the firm in the year 2018-19 to 2019-20. On analysis of the individual ITR by CIO, it was found that his income was Rs.30 lakhs from the year 2018-19 to 2019-20 and most of the part of the income comes from M/s Santosh Construction and he did not explain properly. During investigation it was also found that huge amount was deposited in the bank account of the M/s Santosh construction and also in the bank account of his partners and money was transferred from one bank account of the firm or partners to another accounts of the firm and partners and several other accounts of the various persons and on the request of CIO six Bank accounts of appellant Firm have been frozen. Cr. Appeal (D.B.) No. 154 of 2023 - 30 - It is the admitted fact that in course of investigation it has been revealed that Mritunjay Kumar Singh was helping operatives of CPI Maoist financially and was involved in funding banned terrorist organisation CPI (Maoist) and, as such, the nature of allegation which has been emerged in course of investigation of cooperating with the Maoist, a banned terrorist organization, and the explanation so furnished justifying the retention has not been found corroborated by the investigating agency, since the persons from whom the loan said to have been taken have denied to have given i.e. Vachaspati Sharma accountant of M/s Santosh construction, has denied that he has given cash loan Rs.1,95000/- to either Santosh Kumar Singh or his son Mrityunjay Kumar Singh. Another person, namely, Yogendra Kumar Singh has stated that Mrityunjay Kumar Singh has never asked for any loan nor he had given any loan to him. However, he gave Rs.1,98,000/- to his daughter namely Priya Singh wife of Manish Kumar another son of appellant. One person Bhola Khan, who happens to be contractor, has denied that he had given cash amounting to Rs.1,92,000/- as loan either to appellant Santosh Kumar Singh or Mrityunjay Kumar Singh. Further, even the investigating agency has considered the income tax returns of the appellant wherefrom it was found that his income was Rs.30 lakhs from the year 2018- 19 to 2019-20 and most of the part of the income comes from Cr. Appeal (D.B.) No. 154 of 2023 - 31 - M/s Santosh Construction but the said aspect of the matter could not be explained properly. It has also been found in course of investigation that huge amount was deposited in the bank account of the M/s Santosh construction and also in the bank account of his partners and money was transferred from one bank account of the firm or partners to another accounts of the firm and partners and several other accounts of the various persons and on the request of the investigating officer six Bank accounts of appellant Firm have been frozen. It is also admitted fact that at the time of the raid of the house of Mritunjay Kumar Singh cash amounting to Rs.2,64,42,000/- was recovered and was seized in presence of witnesses. The said amount was deposited in the current account of NIA bearing no 37373578904 at SBI of HEC, Sector II Branch on 16/17.10.2020 by preparing a Panchnama in presence of independent witnesses which was submitted to the court along with chargesheet on 30.4.2021 vide document no 52 and 53 and the seizure was made under section 100(6) Cr P.C and 165 of Cr P.C and investigation is continuing against others. It is also admitted fact that the appellant has filed a petition under section 457(1) of Cr PC for release of said amount of Rs.2,64,42000/- before learned Special Judge by filing criminal miscellaneous case being Cr Misc. No. 293/2022 which was dismissed as withdrawn. Cr. Appeal (D.B.) No. 154 of 2023 - 32 - It further transpires that during the course of investigation that money was intended to be used for the purpose of terrorism or it forms whole or part of the resources of the terrorist organization. The seizure so made was presented before the designated authority who has called upon explanation from the appellant but the explanation so furnished was not found to be satisfactory and by taking into consideration the serious charges including the charge of terrorism, the designated authority has affirmed the seizure. So far as the fact about tendering resignation from the partnership is concerned, the same has been considered to be not much of relevance as the money was seized from the house of Mritunjay Kumar Singh. It is, thus, evident that the appellant is accused in connection with the scheduled offence under the U.A.P. Act, 1967 and from his house unaccountable huge amount of cash amounting to Rs.2,64,42,000/- has been seized and, as such, the investigating officer has prima facie considered the said amount to be the proceeds of the terrorism on the basis of the definition of Section 2(g) of the Act, 1967 which defines the proceeds of terrorism, which means all kinds of properties which have been derived or obtained from commission of any terrorist act or have been acquired through funds traceable to a terrorist act, irrespective of person in whose name such proceeds are standing or in Cr. Appeal (D.B.) No. 154 of 2023 - 33 - whose possession they are found or any property which is being used, or is intended to be used, for a terrorist act or for the purpose of an individual terrorist or a terrorist gang or a terrorist organization. Section 2(g) of the Act, 1967 is quoted hereunder as :- “ 2(g) “proceeds of terrorism” means,— (i) all kinds of properties which have been derived or obtained from commission of any terrorist act or have been acquired through funds traceable to a terrorist act, irrespective of person in whose name such proceeds are standing or in whose possession they are found; or (ii) any property which is being used, or is intended to be used, for a terrorist act or for the purpose of an individual terrorist or a terrorist gang or a terrorist organisation. Explanation.—For the purposes of this Act, it is hereby declared that the expression “proceeds of terrorism” includes any property intended to be used for terrorism;” 10. The question of legality and propriety of the order is under consideration before this Court. The jurisdictional issue is not an issue, since, under the provision of Section 25 of the Act, 1967, the investigating agency/designated authority has got power to make search and seizure of the moveable and immoveable property, as would be evident from the provision as contained under Section 25 of the Act, 1967. Therefore, it is not in dispute that the very purport and object of the Act is to deal with the menace of terrorism and, therefore, the Unlawful Activities (Prevention) Act although is of 1967 but from time to time amendments have been Cr. Appeal (D.B.) No. 154 of 2023 - 34 - incorporated by making insertions of various provisions like Section 15 having been inserted by virtue of the Act 35 of 2008 with effect from 31.12.2008 defining therein the terrorist act. Likewise, the punishment for raising funds for terrorist act has also been inserted by virtue of the Act 3 of 2013 making it effective with effect from 01.02.2013 whereby and whereunder it has been provided that whoever, in India or in a foreign country, directly or indirectly, raises or provides funds or collects funds, whether from a legitimate or illegitimate source, from any person or persons or attempts to provide to, or raises or collects funds for any person or persons, knowing that such funds are likely to be used, in full or in part by such person or persons or by a terrorist organisation or by a terrorist gang or by an individual terrorist to commit a terrorist act, notwithstanding whether such funds were actually used or not for commission of such act, shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life, and shall also be liable to fine. The aforesaid provision, thus, suggests that for any reason whatsoever, if the funds are being raised for terrorist act, the same will be covered under the provision of Section 17 of the Act, 1967. The Section 25(1) provides power to the investigating officer whereby and whereunder if the investigating officer Cr. Appeal (D.B.) No. 154 of 2023 - 35 - has reason to believe that any property in relation to which an investigation is being conducted, represents proceeds of terrorism, he shall, with the prior approval in writing of the Director General of the Police of the State, make an order of attachment directing that such property shall not be transferred or otherwise dealt with except with the prior permission of the officer making such order. The insertion of the word “reason to believe” is having paramount importance. Such word assume importance by conferment of power upon the investigating officer that if any investigation is being conducted and if the investigating agency has reason to believe that any property in relation to which an investigation is being conducted represents proceeds of terrorism, the same is available to be seized by the investigating agency. 11. Herein, in the instant case, it is not in dispute that the appellant is an accused under Sections 10, 13, 17 and 18 of Unlawful Activity (Prevention) Act, 1967 and in course of investigation when the house of the appellant has been searched, huge amount of Rs.2,64,42,000/- has been recovered and seized and, as such, it cannot be said that the investigating agency, while conducting the search in the house of the appellant, was having no reason to believe about the aforesaid huge amount in cash representing as proceeds of terrorism and if in that circumstances the said amount has been seized, the same cannot be said to suffer from an error. Cr. Appeal (D.B.) No. 154 of 2023 - 36 - 12. Further, Section 33 of the Act, 1967 is also having implication in the facts and circumstances of the case by which power has been conferred upon the court to pass an order that all or any of the properties, movable or immovable or both, belonging to him, shall, during the period of such trial, be attached, if not already attached under this Chapter, meaning thereby, that if in course of investigation any property, moveable or immoveable, has not been seized, it can be seized even in course of trial under the provision of Section 33 by the learned trial court. The provision as contained under Section 33 of the Act, 1967 does imply that if there is reason to believe that it is proceeds of the terrorism, the same can either be seized in course of investigation by the investigating agency under the provision of Section 25 or in course of trial by the court under the provision of Section 33 of the Act, 1967 i.e., for the purpose of not allowing the said proceeds to be used in the terrorist activities so as to achieve the very object and intent of the Act. 13. This Court, on consideration of the factual aspect as per the discussion made hereinabove and after going through the contents of the order impugned, has found therefrom that the learned Special Judge has considered the fact which has been brought to its notice by the investigating agency showing the culpability of the appellant under the provision of the Unlawful Activities (Prevention) Act, 1967 and the Cr. Appeal (D.B.) No. 154 of 2023 - 37 - explanation so furnished has not been found to be supported by the persons concerned from whom the amount said to have been taken as loan/credit by the appellant and further, the said amount has also not found in corroboration with the Income Tax Returns and if in that circumstances the learned Special Judge has refused to interfere with the decision of the designated authority dated 23.06.2022 in order to maintain the object and intent of the Act, depending upon the outcome of the trial, the same, according to our considered view, cannot be said to suffer from an error. 14. Accordingly and for the reason stated hereinabove, this Court is of the view that the order requires no interference. 15. Accordingly, the instant appeal fails and is dismissed. (Sujit Narayan Prasad, J.) (Subhash Chand, J.) Birendra /A.F.R. "