- In Muhammed Hasheer Poolakkal v. United Arab Bank & Anr. (2022), Justice Ziyad Rahman AA observed, while evaluating the legislative intent behind implementing Chapter VIIA of the CrPC, that allowing any individual or institution to file an application would equate to reading into the provision that was never intended to be envisaged. Furthermore, it was observed that direct requests from private parties or institutions to initiate proceedings for attachment of properties in foreign states can only be made by the Centre or appropriate authorities under 105C (1) as well as 105D (1) of the Code of Criminal Procedure (CrPC). Since the Indian Courts cannot appease any direct request from private parties or institutions.
- In the present case, the petitioner had failed to repay the loans he obtained from the respondent bank for his business in the United Arab Emirates as certain cheques issued towards the repayment of the loan had been dishonoured. As a result, the respondent filed a criminal case in the UAE court in which the petitioner was found guilty and sentenced to three years of imprisonment.
- Following this, an application under Sections 105C to 105J of CrPC was filed by the respondent before the Judicial Magistrate, who ordered the Station House Officer to determine all the petitioner's properties that were emanated. Consequently, this order was challenged by the petitioner on the grounds that an individual or institution does not have the authority to approach the Court in India directly under Section 105 CrPC just by presenting an application for the same. On the other hand, the respondent bank maintained its contentions while referring to Section 105D (1).
- Chapter VIIAof CrPC discusses reciprocal arrangements for help in specific issues and the attachment and loss of property procedure.
- Section 105C(1) of the CrPC states that if a Court in India has probable cause to believe that any property acquired by any person is derived, directly or indirectly, from the commission of an offense, the Court can issue an order of attachment or forfeiture of such property as it deems fit under the provisions of Sections 105D to 105J.
- 105D (1) of the CrPC states that under Sub-Section (1), or on receipt of a letter of request under Sub-Section (3) of section 105C the Court shall order any police officer not below the rank of Sub-Inspector of Police to take all means required for tracing and identifying such property.
- Section 105J of the CrPC states that if any property referred to in the said order is conveyed by any mode after making an order under Sub-Section (1) of Section 105E or Section 105G, such transfers shall be overlooked for the reasons of the proceedings under this Chapter. If such property is consequently forfeited to the Central Government under Section 160H, then the transfer of such property shall be deemed void.
- In a relevant case, State of Madhya Pradesh v. Balram Mihani and Others [(2010) 2 SCC 602], the scope of the provisions of the aforesaid Chapter was observed. It was held that the aforementioned clause applies solely to offenses with worldwide repercussions or those connected to terrorist activity.
- The Hon'ble Court stated, after hearing both parties and referring to the aforementioned case and legislation, that an impression may be produced about the Court if it considers 105C (1) coupled with Section 105D (1) on being satisfied with the presence of reasonable grounds for the same. Nevertheless, it was observed that when the objective of Chapter VIIA is considered as a whole, the stipulated provisions in Section 105C (1) cannot be viewed in isolation.
- Furthermore, it was observed that accepting any request directly from any party by the courts in India without carrying out the procedure as intended by the guidelines would contradict the purpose of the enactment. As a result, it was determined that allowing any individual or institution to approach the Court directly through an application would be detrimental to the State's interests because the Court would have to decide whether it has an implication on India's sovereignty, security, public order, or essential public interest or a foreign country, which may lack the necessary inputs for sanctioning the same.
- Therefore, the Hon'ble Court ruled that the petition before the Judicial First-Class Magistrate Court was not maintainable as it was filed by an institution without being forwarded by the Central Government or any other authorities.
- Thus, the Hon'ble Court granted the plea after noting that this does not bar the respondent from contacting the Centre or any other authorized body to use the provisions of Chapter VIIA.
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