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, No.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 her 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 pursuant to intelligence about Manjit Singh's involvement in illegal export of psychotropic substances, search and seizure operations were conducted, and contraband was recovered. The authorized officer froze several bank accounts, including the subject account, which was allegedly operated by Manjit Singh. 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 the application, arguing that the account was used for drug trafficking proceeds and that the petitioner had claimed ignorance in her voluntary statement under Section 67. 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 analyzed the provisions of Section 68-F, which mandates that a freezing order under sub-section (1) shall cease to have effect after 30 days unless confirmed by the competent authority under sub-section (2). The court found that the DRI did not place any material to show that the freezing order was confirmed within 30 days. The court also noted that the petitioner, as the proprietor of the firm, had a legitimate claim over the account, and her earlier statement under Section 67 did not bar her from seeking defreezing. The court held that the freezing order had ceased to operate due to non-confirmation, and the petitioner was entitled to defreezing. The court allowed the petition, set aside the impugned order, and directed the DRI to defreeze the account within two weeks.
Headnote
A) Narcotic Drugs and Psychotropic Substances Act, 1985 - Freezing of Property - Section 68-F(1) and (2) - Mandatory Confirmation Period - The freezing order under Section 68-F(1) ceases to have effect after 30 days unless confirmed by the competent authority under Section 68-F(2). In this case, the freezing order was not confirmed within 30 days, and thus the order ceased to operate. The court held that the petitioner is entitled to defreezing of the bank account. (Paras 7-10) B) Narcotic Drugs and Psychotropic Substances Act, 1985 - Proceeds of Crime - Section 68-B - Burden of Proof - The respondent failed to establish that the amount in the account was proceeds of crime. The petitioner's statement under Section 67 did not bar her claim as proprietor. The court held that the account should be defrozen. (Paras 7-10)
Issue of Consideration
Whether the freezing of a bank account under Section 68-F(1) of the Narcotic Drugs and Psychotropic Substances Act, 1985 ceases to operate if not confirmed by the competent authority within 30 days as mandated under Section 68-F(2), and whether the petitioner is entitled to defreezing of the account.
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, within two weeks from the date of this order.
Law Points
- Freezing order under Section 68-F(1) of NDPS Act ceases to operate if not confirmed by competent authority within 30 days under Section 68-F(2)
- Petitioner's claim over account as proprietor not barred by earlier statement under Section 67
- Proceeds of crime must be established for continued freezing
