Chapter VII A of Criminal Procedure Code not applicable to local offences generally.
‘REPORTABLE’
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL Nos. 891-893 OF 2007
State of Madhya Pradesh …. Appellant
Versus
Balram Mihani & Ors. …. Respondents
J U D G M E N T
V.S. SIRPURKAR, J.
1. By our earlier order dated 19.01.2010, we have dismissed the
appeals filed by the State of Madhya Pradesh. Now, we proceed to give
reasons thereof.
2. The Station House Officer, Itarsi moved applications before the
Judicial Magistrate, First Class, Itarsi for initiating proceedings against the
respondents herein under Chapter VII-A of the Code of Criminal
Procedure, 1973 (hereinafter referred to as “the Code”) for attachment and
forfeiture of the properties of the respondents. According to the
applications, the said properties were derived from or used in commission
of offences and were acquired from the criminal activities. The police
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further urged that the respondents were involved in the criminal activities
since long and had accumulated huge wealth derived directly or indirectly
by or such criminal and unlawful activities. According to the police some of
these properties were in the names of their relatives which were clearly
traceable to the respondents herein. The prayer thus was made under
Section 105-D of the Code for authorization to take all necessary steps to
trace out and identify such properties and further for the forfeiture and
vesting thereof. Some other applications were also filed on identical facts
against some other respondents also. The Trial Court having passed an
order in pursuance of these applications allowing the same, the
respondents challenged the same by way of a petition under Section 482
of the Code. Finding that there were divergent opinions on the tenability of
the applications amongst two learned Single Judges of the Madhya
Pradesh High Court, the matter was referred to the Division Bench and the
Division Bench by the impugned order quashed the proceedings holding
that the provisions of Chapter VII-A were not applicable to such local
offences complained of. It is this order which is in challenge before us at
the instance of the State Government in these appeals.
3. Shri Dushyant A. Dave, learned Senior Counsel appearing on behalf
of the State of Madhya Pradesh very painstakingly took us through
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Chapter VII-A containing Sections 105-A to 105-L. It will be useful to see
the import of some of the Sections.
4. Section 105A(a) defines “contracting State” and refers to any
country or place outside India in respect of which arrangements have been
made by the Central Government with the Government of such country
through a treaty or otherwise. Section 105A (c) defines proceeds of crime
as under:
“(c) “proceeds of crime” means any property derived or
obtained directly or indirectly, by any person as a result
of criminal activity (including crime involving currency
transfers) or the value of any such property”
Section 105A (d) defines the property as under:
“(d) ”property” means property and assets of every
descripttion whether corporeal or incorporeal, movable
or immovable, tangible or intangible and deeds and
instruments evidencing title to, or interest in, such
property or assts derived or used in the commission of
an offence and includes property obtained through
proceeds of crime.”
Section 105-B deals with assistance in securing arrest of persons on
request from contracting states or the arrest in the contracting states. Sub-
Section (1) thereof starts with the words “Where a Court in India”. So also
Sub-Section (3) starts with the aforementioned words. Section 105C is as
under:
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“105C. Assistance in relation to orders of attachment or
forfeiture of property.
(1) Where a court in India has reasonable grounds to
believe that any property obtained by any person is
derived or obtained, directly or indirectly, by such
person from the commission of an offence, it may make
an order of attachment or forfeiture of such property, as
it may deem fit under the provisions of sections 105D to
105J (both inclusive).
(2) Where the Court has made an order for attachment or
forfeiture of any property under sub-section (1), and
such property is suspected to be in a contracting State,
the court may issue a letter of request to a court or an
authority in the contracting State for execution of such
order.
(3) Where a letter of request is received by the Central
Government from a court or an authority in a contracting
State requesting attachment or forfeiture of the property
in India, derived or obtained, directly or indirectly, by
any person from the commission of an offence
committed in that contracting State, the Central
Government may forward such letter of request to the
court, as it thinks fit, for execution in accordance with
the provisions of sections 105D to 105J (both inclusive)
or, as the case may be, any other law for the time being
in force.”
5. Section 105-D empowers the court to direct any police officer not
below the rank of Sub-Inspector to take steps for tracing and identifying
such property under Section 105C (1) or on receipt of letter of request
under sub-section (3) of Section 105-C. Section 105-E empowers the
officer conducting an inquiry or investigation to make an order of seizure of
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such property, if he has a reason to believe that such property is likely to
be concealed, transferred or dealt with in any manner which will result in
disposal of the property. Section 105-F relates to the power of court to
appoint District Magistrate of any area or his nominee where the property
situated to perform the functions of an administrator of such property.
Section 105G provides for show cause notice before forfeiture. Section
105-H deals with the forfeiture of the property to Central Government while
Section 105-I empowers the Court giving an option to the owner of such
property to pay, in lieu of forfeiture, the fine equal to the market value of
such property. Section 105-J takes care of the situation where after
making an order under sub-section (1) of Section 105-E or the issue of a
notice under Section 105-G, the property stands transferred by any mode
whatsoever and further provides that such transfer shall be ignored and
also that such transfer of property shall be deemed null and void. Section
105-L deals with the applications and powers in this Chapter.
6. The stress of the learned counsel is particularly on Section 105-D
and the learned counsel is at pains to point out that Section 105-C and D
can apply to any property in India which is derived or obtained from the
commission of offence. Such offence could be even the offence which
does not have international ramifications. The High Court, has taken stock
of all these Sections and referred to the heading of the Chapter, the
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Statement of Objects and Reasons of the amending Act being Act No.40 of
1993 and the speech of the Hon’ble Minister for Home Affairs Shri S.B.
Chavan (as he then was). From this the High Court has come to the
conclusion that firstly the provisions of Chapter VII-A are not the ordinary
law of land and further the provisions therein would be applicable only to
the offences which have international ramifications. The High Court has
further reached the conclusion that the said provisions override the
provisions of Chapter V, VI AND VII of the Code relating to search and
seizure during investigation. The High Court has posed following
questions:
i) What was the law before the making of the amendment?
ii) What was the mischief and defect for which the law did not
provide?
iii) What is the remedy that the amendment has provided? And
iv) What is the reason of the remedy?
7. Answering all these questions and also taking into account the
general provisions of search and seizure contained in Sections 91 to 101
of the Code, as also taking into consideration Sections 451, 452 and 457
of the Code dealing with the custody and disposal of the property involved
in crime, the High Court ultimately came to the conclusion that the said
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provisions of Chapter VII-A would not apply to the cases in question. The
High Court has also taken into consideration the provisions of Section
41(1)(g) of the Code, Sections 166-A and 166-B of the Code and has
relied upon three other cases, namely, Union of India & Anr. v. W.N.
Chadha [1993 Supp. (3) SCC 260], Jayalalitha v. State [(2002) Crl.L.J.
3026] and Bhinka v. Charan Singh [AIR 1959 SC 90]. It has ultimately
held that Chapter VII-A has been incorporated with an intention to curb
mischief or completely eliminate the terrorists activities and international
crimes. According to the High Court, the provisions of this Chapter are
supplemental to the special provisions contained in Sections 166-A and
166-B and had nothing to do with the investigation into offences in general.
8. We have considered the judgment as also the contentions raised by
the learned counsel. We have also perused the heading of Chapter VII-A
as also the Statement of Objects and Reasons. After perusing the same
we are of the firm opinion that the well written judgment of the High Court
is correct and the High Court has taken a correct view.
9. In the Statement of Objects and Reasons to the Amending Act 40 of
1993 there is a clear cut reference that the Government of India had
signed an agreement with the Government of United Kingdom of Great
Britain and Northern Ireland for extending assistance in the investigation
and prosecution of crime and the tracing, restraint and confiscation of the
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proceeds of crime (including crimes involving currency transfer) and
terrorist funds, with a view to check the terrorist activities in India and the
United Kingdom. The statement further goes on to provide the three
objectives, viz.:
(a) the transfer of persons between the contracting States
including persons in custody for the purpose of assisting in
investigation or giving evidence in proceedings;
(b) attachment and forfeiture of properties obtained or derived
from the commission of an offence that may have been or has
been committed in the other country; and
(c) enforcement of attachment and forfeiture orders issued by a
court in the other country.
10. We have even taken into consideration the speech of the then Home
Minister Shri S.B. Chavan which leaves no doubt that this Chapter is not
meant for the local offences.
11. When we see the applications as also the order passed by the Trial
Court, it is clear that it is only and only in respect of the local offences like
gambling and the offences under I.P.C. which are local. Even the
properties are not shown to be connected with crimes mentioned in the
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Objects and Reasons of the amending Act. In fact, no connection is
established also between crimes mentioned and the properties. Such
properties are clearly not included in Section 105-C. Though the language
of Section 105-C (1) is extremely general, its being placed in Chapter VII-A
cannot be lost sight of. Again there is a clear cut reference in Sub-section
(2) thereof to the contracting state, the definition of which is to be found in
Section 105-A (a). It is, therefore, clear that the property envisaged in
Section 105-C (1) cannot be an ordinary property earned out of ordinary
offences committed in India. Where the language is extremely general and
not clear, the contextual background has to be taken into consideration for
arriving at clear interpretation. Some assistance was tried to be taken from
the language of Section 105-B(2) which starts with the words
“notwithstanding anything contained in this Code”. However, when the
sub-section is read in entirety, it is clear that it makes reference to a
person who is in “contracting State”. Therefore, even that reference will
not bring in any provision within the scope of general law. We again
cannot ignore the express language of Sections 105-B and 105-C which
starts with the words “where a court in India”. If this chapter was meant for
the general offences and the properties earned out of those general
offences in India, then such a phraseology would not have been used by
the Legislature.
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12. Lastly we see the provisions of Section 105-L which are clear that
the Central Government may by notification in the official gazette, direct
that the application of this chapter in relation to a contracting State with
which there are reciprocal arrangements would be subject to some
conditions, exceptions and qualifications as would be specified in the said
notification. It is, therefore, clear that the whole chapter is specific chapter
relating to the specified offences therein and has nothing to do with the
local offences or the properties earned out of those.
13. At this juncture, it is pointed out that there are specific other Central
laws wherein the properties earned out of trading of Narcotic Drugs and
Psychotropic Substances or the offences relating to smuggling or financial
offences relating to foreign exchange are liable to be attached, seized and
forfeitured. Chapter VII-A is one such measure to introduce stringent
measures for attachment and forfeiture of the properties earned by the
offences, by way of reciprocal arrangement in the contracting countries.
However, if we accept the State’s contention that the provisions of Chapter
VII-A are for all and sundry offences in India, it would be illogical.
14. If such a construction as claimed by the petitioner is given then it
would mean that even for the offences which are local in nature and
committed within the State, still the property connected with those offences
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shall be forfeitured to the Central Government. That would obviously be
an absurd result.
15. Lastly, we cannot ignore the likely misuse of the provisions in
Chapter VIIA if the whole Chapter is made applicable to the local offences
generally. Such does not appear to be the intendment of the Legislature in
introducing Chapter VII A.
16. In view of the above we approve the judgment of the Madhya
Pradesh High Court and confirm the same. The appeals are dismissed.
……………………………………….J.
(V.S. SIRPURKAR)
……………………………………….J.
(SURINDER SINGH NIJJAR)
NEW DELHI;
FEBRUARY 1, 2010
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Digital Performa
Case No. : Criminal Appeal Nos. 891-893 Of 2007
Date of Decision : 1.2.2010
Cause Title : State of Madhya Pradesh
Versus
Balram Mihani & Ors.
Coram : Hon’ble Mr. Justice V.S. Sirpurkar
Hon’ble Mr. Justice Surinder Singh Nijjar
C.A.V. On : 20.01.2010
Judgment
delivered by : Hon’ble Mr. Justice V.S. Sirpurkar
Nature of Judgment : Reportable
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