Facts of the Case

This is a criminal-procedure matter concerning seizure of a bank account during investigation of a matrimonial cheating and misappropriation complaint, not a GST dispute. The petitioner, Ummar Farook, proprietor of M/s Buildin Developers, had his bank account (with Bank of Baroda, Karnataka) seized by the Deputy Superintendent of Police, Crime Branch, Ernakulam Rural, during investigation of a crime registered on the complaint of the father-in-law of Sri Muhammed Hafeez, alleging that Hafeez had ill-treated his wife and misappropriated her assets. The petitioner explained that he had merely acted as a conduit: amounts (including Rs. 10 lakh from the complainant) were transferred to his account at Hafeez's request, citing 'technical issues', and the petitioner then transferred those amounts onward to Hafeez, without retaining them.

Issues Involved

  1. Whether the seizure of the petitioner's bank account under Section 102 CrPC was justified, given that the petitioner claimed to be merely a pass-through conduit for funds ultimately meant for the principal accused.

Petitioner's Arguments

  • He had no connection with the alleged offences; he ran genuine private and government contract work, and had a pre-existing relationship with Hafeez, to whom he sub-contracted work.
  • Amounts transferred to his account (including Rs. 10 lakh from the defacto complainant) were, per Hafeez's representations, meant for Hafeez, and the petitioner transferred all such amounts onward, retaining nothing beyond what was independently due to him.
  • The seizure order was unsustainable under Section 102 CrPC in the absence of material showing the funds in his account were themselves proceeds of any offence.

Respondent's Arguments

  • The Investigating Agency reported that Rs. 1.4 crore had been transferred by the complainant directly into the petitioner's account, and that more time was needed to verify all transactions.

Court Order / Findings

  • The Court found no case that the petitioner had himself committed any offence; his account was seized only because certain amounts passed through it before being forwarded to the principal accused.
  • It held that the Investigating Agency had not established the requirements of Section 102 CrPC to justify seizure of the petitioner's account.
  • The seizure order was lifted, and the petitioner was permitted to operate his account, with the Bank directed to allow this absent any other independent reason for restriction.

Important Clarification

The petitioner's GST registration certificate appears in this case only as one of several documents (Exhibit P5) produced to establish his identity as a genuine contractor — the ruling turns entirely on Section 102 CrPC principles for bank account seizure during a criminal investigation, and has no bearing on GST compliance or law.

Sections Involved

  • Code of Criminal Procedure, 1973 — Section 102 (power of police to seize property).
  • Indian Penal Code, 1860 — Sections 406, 420, 468, 471, 120-B, 419, 498A read with 34.

Decision – In Favour of

Decided in favour of the petitioner, Ummar Farook; the writ petition was allowed and the seizure of his bank account was lifted, without any finding on the guilt or innocence of the principal accused, Muhammed Hafeez.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(Crl.) No. 135 of 2023
  • Coram: Hon'ble Mr. Justice K. Babu
  • Date of Judgment: 13 October 2023

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