Case Note & Summary
The petitioner, Jatinder Kaur Chilotra, filed a writ petition under Article 227 of the Constitution of India challenging an order dated 3 December 2021 passed by the Additional Sessions Judge, Thane, which rejected her application for defreezing a bank account. The account, number 001905004912, was in the name of M/s. Allied Air Express, a proprietary firm of the petitioner, maintained with ICICI Bank, Mira Road Branch. The account was frozen by the Directorate of Revenue Intelligence (DRI) in connection with F.No.DRI/MZU/C/INT-117/2016 registered against the petitioner's husband, Manjit Singh, and others for offences under Sections 22(c), 23(c), 27-A, and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act). The background facts reveal that Manjit Singh was involved in illegal export of psychotropic substances like Alprazolam, Zolpidem, and Diazepam. The DRI conducted search and seizure operations, recovered contraband, and arrested Manjit Singh. The authorized officer froze several bank accounts, including the subject account, believing they contained proceeds of drug trafficking. The petitioner applied for defreezing on the ground that the freezing order was not confirmed by the Competent Authority within 30 days as required under Section 68-F(2) of the NDPS Act, and thus the order ceased to operate. The DRI opposed, arguing that the account was operated by Manjit Singh and contained illegally acquired property. The Special Judge rejected the application, holding that the amount represented proceeds of illicit supply and the petitioner was a mere proxy. The petitioner then approached the High Court. The court heard arguments from both sides. The petitioner's counsel contended that the freezing order lapsed due to non-confirmation within 30 days. The DRI's counsel argued that the petitioner had disclaimed knowledge of the account in her voluntary statement under Section 67 of the NDPS Act. The court analyzed Section 68-F of the NDPS Act, which provides for freezing of property. Sub-section (2) mandates that the Competent Authority shall confirm the order within 30 days, failing which the order ceases to operate. The court found that the DRI did not obtain confirmation within the stipulated period. Therefore, the freezing order became inoperative. The court allowed the petition, set aside the impugned order, and directed the defreezing of the bank account. The court did not address the merits of whether the amount was proceeds of crime, as the procedural lapse was decisive.
Headnote
A) Narcotic Drugs and Psychotropic Substances Act, 1985 - Freezing of Property - Section 68-F(2) - Mandatory Confirmation Period - The freezing of property under Section 68-F(1) must be confirmed by the Competent Authority within 30 days, failing which the order ceases to operate. In this case, the bank account of the petitioner's proprietary firm was frozen by DRI but not confirmed within 30 days. The court held that the freezing order lapsed and directed defreezing of the account. (Paras 3-6) B) Narcotic Drugs and Psychotropic Substances Act, 1985 - Proceeds of Crime - Illegally Acquired Property - Section 68-F - The court noted that the subject account was in the name of the petitioner's proprietary firm and operated by her husband, the prime accused. However, the failure to confirm the freezing order within 30 days was fatal. The court did not delve into the merits of whether the amount was proceeds of crime. (Paras 4-5)
Issue of Consideration
Whether the freezing of a bank account under Section 68-F of the NDPS Act, 1985 ceases to operate if not confirmed by the Competent Authority within 30 days as mandated under sub-Section (2) of Section 68-F.
Final Decision
The petition is allowed. The impugned order dated 3 December 2021 passed by the learned Additional Sessions Judge, Thane, is set aside. The respondent No.1 is directed to defreeze the bank account No.001905004912 of M/s. Allied Air Express maintained with ICICI Bank, Mira Road Branch, forthwith.
Law Points
- Freezing of property under NDPS Act
- 1985
- Section 68-F(2) requires confirmation within 30 days
- failure renders order inoperative
- defreezing application allowed
