SC dismisses appeal by Teesta Setalvad to De-freeze Bank Accounts [Read Judgement]

The Supreme Court has dismissed the appeal filed by Teesta Setalvad, Javed Anand and others praying for de-freezing bank accounts affiliated to NGOs managed by them i.e. Citizens for Justice and Peace (CJP) and Sabrang..A Division Bench comprising of Chief Justice Dipak Misra and Justice AM Khanwilkar had reserved its judgment in the matter in July last year..The bank accounts of the appellants were frozen by investigating officers following a complaint made by members of the Gulberg Co-Operative Housing Society. The complainants had accused the appellants of embezzling funds collected for victim relief and the construction of a memorial museum post the Gujarat riots of 2002..A case was registered against the appellants on various charges including cheating and criminal breach of trust. The bank accounts were frozen after intimating the concerned Magistrate in January 2014..The appellants had approached several forums praying for de-freezing the accounts, including the Bombay High Court, the Metropolitan Magistrate’s Court and the Gujarat High Court. The instant appeal arose after the High Court of Gujarat rejected revision applications filed with a view to obtain the said relief in 2015. The limited question before the Apex Court had to do with the correctness of allowing the authorities to freeze the bank accounts of the appellants..Senior Advocate, Kapil Sibal and Advocate Aparna Bhat, appeared for the appellants while Additional Solicitor General, Tushar Mehta and Advocate Ajay Chokshi appeared for the State of Gujarat.The appellants had taken the stand that the freezing of accounts was motivated and an attempt to stifle them from carrying on their social welfare activities..It was argued that the bank accounts had no causal connection with the commission of alleged offence in respect of which investigation was in progress. It was submitted that the initial FIR did not name the CJP Trust as an accused. However, the banks accounts of the CJP Trust were also frozen..The appellants also pointed out that the accounts were frozen on the basis of allegations made by private persons. No donor had come forward to question the intention or activity of the concerned Trust. Further, it was also argued that, given that accounts were Foreign Contribution Regularization Accounts (FCRA) under the authorization of the Home Ministry, the local police had no authority to freeze them..The Supreme Court, however, noted that the High Court had allowed the freezing of accounts after it noticed sufficient discrepancies in transactions involving both bank accounts. In such circumstances, de-freezing the accounts may have the effect of paralyzing the investigation..It also dismissed contentions made by the appellants that they ought to have been given notice before the bank accounts were seized. The Court observed that the police have sufficient powers to seize tainted properties under Section 102 of the Code of Criminal Procedure if it is found to be connected to matters under investigation. There is nothing in Section 102 which mandates prior notice to be given to the account holder before seizure of the bank account, as emphasized in the case of Vinos Kumar Ramachandras Valluvar v State of Maharashtra..Hence, there was no error on the part of the lower courts in rejecting the plea made for de-freezing the bank accounts. The Supreme Court therefore dismissed the appeal, after observing that once the investigation is concluded,.“…it would be open to the appellants to apply for de-freezing of the bank accounts and persuade the concerned Court that the said bank accounts are no more necessary for the purpose of investigation, as provided in subsection (3) of Section 102 of the Code. It will be open to the concerned Court to consider that request in accordance with law after hearing the investigating agency, including to impose conditions as may be warranted in the fact situation of the case.”.Read the Judgment: