Misc. Case No. 281 of 2022 · The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.3993 of 2022 Chanchal Jalan Petitioner Mr. Partha Sarathi Nayak, Advocate …. -Versus- State of Odisha …. Opposite Party Mr. T.K. Praharaj, SC CORAM: JUSTICE R.K. PATTANAIK DATE OF JUDGMENT:01.05.2023 1. Instant petition under Section 482 Cr.P.C is at the behest of the petitioner assailing the impugned order dated 30th November, 2022 passed in Criminal Misc. Case No. 281 of 2022 by the learned S.D.J.M.(Sadar), Cuttack, whereby an application to defreeze the seized account in the Punjab National Bank, Buxi Bazar Branch, Cuttack was rejected on the grounds inter alia that the same is not tenable in law and hence, therefore liable to be quashed with a consequential direction for its release. 2. In fact, on 9th September, 2022, the Drugs Inspector, Odisha, Cuttack-I Range, Cuttack lodged a complaint, as a result of which, Purighat P.S. Case No. 222 of 2022 was registered under Sections 420, 336, 483 and 486 read with 34 IPC, which was later turned to a case under Sections 420, 336, 326, 483 and 486 read with Section 34 IPC, which corresponds to G.R. Case No. 1169 of 2022 pending in the file of learned S.D.J.M. (Sadar), Cuttack. The allegation in the F.I.R is that as per the direction of the Drug Controller of Odisha, Bhubaneswar, the complainant and other officials made seizure of the named drugs during a raid conducted. It was further alleged that if the seized spurious drugs CRLMC No. 3993 of 2022 Page 1 of 8 Chanchal Jalan Vrs. State of Odisha are consumed, it could lead to life threatening chronic cardiovascular disease. With the above allegation, the F.I.R was lodged and the case was registered under the alleged offences against the accused persons including the petitioner, who happens to be the proprietor of the involved agency, namely, M/s. Puja Enterprisers. In that connection, the account of the petitioner in which the sale proceeds of the transaction said to have been received was seized during investigation. As against such seizure of the account, the petitioner moved the learned Court below to defreeze the same, however, the application under Section 457 Cr.P.C. was rejected vide the impugned order dated 30th November, 2022 (Annexure-2).
Legal Reasoning
3. Heard Mr. Nayak, learned counsel for the petitioner and Mr. Praharaj, learned counsel for the State. 4. Mr. Nayak, learned counsel for the petitioner submitted that the alleged account of the petitioner is a loan account as the concerned branch of the Bank sanctioned a loan on 27th May, 2022 and due to freezing of it, she is not able to pay off her creditors and also incurring other liabilities. It is submitted that the sanction of loan is in the nature of cash credit facility and as per the terms and conditions of sanction, the petitioner has to maintain her account in the manner prescribed failing which she would be visited with penal interest. It is also claimed that the petitioner has not been able to file GST return due to freezing of the alleged account and in the meantime, she has been served with a notice by the GST department twice under Section 46 of the G.S.T Act, requiring her to file return or else to face the consequence. It is further submitted by Mr. Nayak that after it was learnt that the drugs supplied are suspected to be spurious and its batch numbers did not match with the manufacture of M/s. Glenmark Pharmaceuticals and as the packets of the said CRLMC No. 3993 of 2022 Page 2 of 8 Chanchal Jalan Vrs. State of Odisha drugs including bar code resembled the original products of the company, a report was lodged on 12th September, 2022 against the supplying agency, namely, M/s. Balaji Drug Point. Referring to Section 19 (3) of the Drugs and Cosmetics Act, learned counsel for the petitioner submits that the petitioner had taken all the precautions expected from her side before receiving the supply of drugs from M/s. Balaji Drug Point and only after being satisfied that the said agency having a valid drug licence and hence, in view of the above, contravention of Section 18 thereof cannot be alleged against them. Under the above circumstances, Mr. Nayak, learned counsel for the petitioner pleads for defreezing of the account in question. 5. Mr. Praharaj, learned counsel for the State, on the other hand, submits that the impugned order vide annexure-2 is absolutely justified and in accordance with law and therefore, calls for no interference. It is further submitted that in course of investigation, it was revealed that the petitioner to be the proprietor of the concerned agency dealing with the medicine business and the man behind the alleged transactions to be her husband, who is officially declared as the competent person to look after the entire business including the financial transactions. Mr. Praharaj submits that though the petitioner is stated to be a house-wife but her business is being managed by the accused-husband and the alleged monetary transaction was maintained in the seized account. It is contended by Mr. Praharaj that spurious medicines have been purchased from outside the State by the agency at a higher discount and sold it to other firms fully knowing that such drugs cannot be available or purchased at such a lower rate which prima facie proved the fraud having been committed and in the process, the petitioners’ agency by selling the same earned lacs of rupees and the sale proceeds is being deposited in the account, which has been freezed on 15th September, 2022 with the CRLMC No. 3993 of 2022 Page 3 of 8 Chanchal Jalan Vrs. State of Odisha available amount of Rs.47, 89, 389/-. It has been drawn to the attention of the Court by Mr. Praharaj that during investigation and verification of the Bank account of M/s. Puja Enterprisers and M/s. Balaji Drug Point, Gaya, Bihar. it was revealed that between June, 2022 and August, 2022, an amount of Rs. 71, 59, 021/- was transferred against the purchase of the spurious drugs from the seized account to the account of one of the accused persons of M/s. Balaji Drug Point. Mr. Praharaj, learned SC refers to a copy of the Bank account details as at Annexure-A and contends that there has been transaction between the parties as it was detected during investigation. By placing reliance on the relevant documents annexed and referring to Rule 62 of Drugs and Cosmetics Rules, 1945, Mr. Praharaj, learned SC lastly submits that the transaction has been carried out from two different places, for which, separate licenses are necessary and that apart, on inquiry and inspection, the drugs were found to be spurious and the sale proceeds of the transaction since received in the alleged account, which has, therefore, been rightly freezed. 6. Such seizure of account of the petitioner has been held as per Section 102 Cr.P.C and the purpose is to secure evidence since the sale proceeds of the crime said to be received and deposited in the same. A property such as movable in nature including a bank account may be seized under Section 102 Cr.P.C. and could therefore be frozen by the investigating authority, if it is found to have direct link or nexus with the commission of the crime. The necessary paraphernalia are to be observed in freezing of the bank account as prescribed in Section 102(3) Cr.P.C. The ground for defreezing the account is that the account is a cash credit facility opened on 27th May, 2022 and basically meant for commercial transactions of the agency and on account of its seizure, a lot of difficulty is being faced in paying off the creditors and clearing various other debts resulting incurring additional CRLMC No. 3993 of 2022 Page 4 of 8 thereby Chanchal Jalan Vrs. State of Odisha liabilities. While advancing the argument against defreezing of the account, Mr. Praharaj, learned SC submitted the case diary in order to show the manner in which the illicit business transaction has been accomplished and receipt of the sale proceeds in the alleged account. Even, it has been shown to the Court by Mr. Praharaj that the drugs seized have been found spurious. The petitioner’s husband is the competent to look after the business and at his involvement, the medicines have been procured and the sale proceeds of the transactions are being received in the seized account and hence, learned counsel for the State submits that the said account should not be defreezed. 7. In response to the above, showing the conduct of the petitioner’s husband not to be mischievous and for having taken due care and precaution before entering into business transaction with the outside agency submits that the seizure of the account is unjustified and therefore, it ought to be defreezed. A memo dated 27th March, 2023 is filed by the learned counsel for the petitioner to apprise the Court that the chargesheet has been submitted in the meantime and it is not against the petitioner, who is the proprietor of M/s. Puja Enterprisers and while claiming so, he produced copies of the chargesheet and the order of cognizance of the learned S.D.J.M.(Sadar), Cuttack dated 28th January, 2023. The submission of Mr. Nayak, learned counsel for the petitioner is that since the petitioner is not an accused as she has not been chargesheeted along with her husband and others, the alleged account in her name should not remain seized. 8. The merits of the rival claims have to be examined during trial. Whether the alleged drug agency having a valid licence or otherwise is a question to be determined by the learned Court below. If at all the petitioner or her husband-accused had taken precautions before purchasing drugs from a valid drug license CRLMC No. 3993 of 2022 Page 5 of 8 Chanchal Jalan Vrs. State of Odisha holder and hence none of them committed any such offence in contravention of Section 18 of the Drugs and Cosmetics Act is again a matter of adjudication during in course of inquiry and trial. From the case diary and chargesheet, it is however, made to suggest that the agency of the petitioner was involved in the alleged purchase of spurious medicines and in that connection, the sale proceeds were or are being received in the seized account. So, therefore, the question is, whether the alleged account should be defreezed, which has been pleaded for especially after the submission of chargesheet, wherein she has not been arrayed as an accused? Considering of the chargesheet, the Court finds that a preliminary CS has been submitted keeping investigation open under Section 173(8) Cr.P.C. Admittedly, the petitioner despite the proprietor of M/s. Puja Enterprisers has not been made an accused. Having regard to the chargesheet and other connected materials so placed at the disposal of the Court, it is made to appear that the alleged transaction involved purchase of spurious drugs from an outside agency and thereafter, it was sold within the State. The investigation has revealed that M/s. Glenmark Pharmaceutical Pvt. Ltd. is the sole manufacturer of medicines, namely, TELMA-40 and TELMA-AM and the said company has appointed C & F Agent as well as stockiest for marketing of the medicines and they ought to have been purchased from the authorized agent. However, in an instant case, the seizure has been made from M/s. Kyal Agencies and M/s. MPRS of Cuttack, who to ought to have purchased the medicines from the manufacturing company and not from M/s. Puja Enterprisers at higher rate of discount than the original discount rate of the company. The sale proceeds are alleged to have been received in the account of the petitioner. So therefore prima facie it can be said that the Bank account has a nexus with the sale proceeds of the crime and hence, it was seized during investigation. The Court CRLMC No. 3993 of 2022 Page 6 of 8 Chanchal Jalan Vrs. State of Odisha does not find any error or illegality in the seizure of the alleged account of the petitioner during and in course of investigation for having reached at a conclusion that it received the sale proceeds of the illicit business transaction. 9. But, as in the meantime, the chargesheet is submitted and the investigation is concluded as against the other accused persons and the petitioner has not been chargesheeted for the alleged offences perhaps for the reason that her husband is the competent person to deal with the business, a further question arises as to if the account is to lie and remain freezed debarring the petitioner to operate the same? In the case at hand, the petitioner might have other business transactions, proceeds of which are being received and deposited in the alleged account. To claim that the account is to stay freezed and it should remain so merely for the reason that the sale proceeds of the crime have been deposited therein cannot be justified. Furthermore, the petitioner claims it to be a loan account and any such seizure for longer would not be proper and justified either. If the sale proceeds of the crime have been or are still being received, it can be earmarked so as to prevent its withdrawal by the petitioner. However, keeping the alleged account frozen might affect other business prospects and connected liabilities vis-à-vis the petitioner. What is the extent and amount of sale transaction or proceeds received and its source can easily be ascertained considering the transaction details maintained by the Bank, so that, it can be segregated without any provision made for the petitioner to withdraw the same leaving the account open and operational. The above approach, if it is feasible, in the humble view of the Court, would be reasonable instead of keeping the account freezed till the end of the trial. The said exercise may be undertaken by the learned court below so that withdrawal to the extent of the illicit sale proceeds may be barred for the present and at the same time, the petitioner would CRLMC No. 3993 of 2022 Page 7 of 8 Chanchal Jalan Vrs. State of Odisha be in a position to operate the alleged account so that rest of her business dealings and matters connected therewith remain active and are not unduly affected. 10. Accordingly, it is ordered. 11. In the result, the CRLMC stands disposed of in the above terms. As a necessary corollary, the impugned order dated 30th November, 2022 passed in Criminal Misc. Case No. 281 of 2022 vide Annexure-2 by the learned S.D.J.M. (Sadar), Cuttack is hereby modified to the extent as above. Consequently, the learned Court below is directed to undertake the aforesaid exercise with the aid and advice of the Bank after due notice and hearing to the concerned IO and thereafter to pass appropriate order according to law with the liberty to impose such terms and conditions which are just and expedient to give effect to its directions and to complete the entire exercise at the earliest preferably within a period of four weeks from the date of receipt of a copy of this order. BALARAM BEHERA Digitally signed by BALARAM BEHERA Date: 2023.05.04 21:50:20 +05'30' (R.K. Pattanaik) Judge Balaram CRLMC No. 3993 of 2022 Page 8 of 8