Private Parties Can't Approach Courts Seeking Attachment Of Properties In Foreign States Under Chapter VIIA CrPC : Kerala High Court

The Kerala High Court has held that the courts in India cannot entertain any request directly from any private parties or institutions to initiate proceedings for attachment of properties in foreign states and added that such requests can only be made by the Centre or appropriate authorities under Section 105 of Code of Criminal Procedure (CrPC).

Upon examining the legislative intent behind incorporating Chapter VIIA of CrPC, Justice Ziyad Rahman A.A took the stand that permitting any individual or establishment to file an application would amount to reading into the provision something which was never intended to be contemplated therein.

"While interpreting the stipulations contained in Chapter VIIA, particularly the provisions in 105C(1) as well as 105D(1), I am of the view that the intention of the legislature is to enable the court to initiate proceedings for attachment and forfeiture of the properties which are proceeds of crime only based on a request or application being made by the Government or any other competent authorities in this regard. This is mainly because, from the objects and reasons of the enactment, it is evident that the provisions in this Chapter have been introduced based on international treaties."

The petitioner herein had availed a loan from the respondent bank for his business in U.A.E. Subsequently, he defaulted on repayment and certain cheques he issued towards repayment of the loan were also dishonoured. Accordingly, a criminal prosecution was launched before the U.A.E. court by the respondent. The petitioner was found guilty and sentenced to undergo imprisonment for three years. 

Thereafter, the respondent submitted an application before the Judicial Magistrate to initiate proceedings for attachment of the properties of the petitioner as per Sections 105C to 105J of CrPC.The Magistrate directed the Station House Officer to identify all the petitioner's properties which were derived as proceeds of crime.

The crucial question was whether the powers of the court under Chapter VII A CrPC can be invoked based on an application submitted by an individual/establishment or is it necessary to submit a request in this regard by the Central Government. 

The Chapter deals with the powers of the court and the procedure to be adopted for the reciprocal arrangement for assistance in matters relating to attachment and forfeiture of property.

Challenging the Magistrate's order, Advocate Nireesh Mathew appearing for the petitioner argued that Section 105 CrPC does not authorise any individual or an institution to approach the court in India directly by submitting an application for invoking the aforesaid power. It was also submitted that the Guidelines on Mutual Legal Assistance in Criminal Matters issued by the Ministry of Home Affairs prescribe certain procedures and the matters to be considered when the Government processes such a request.

Therefore, he argued that any individual, whether a citizen of India or not, cannot directly approach the court for invoking the said powers, as the same would amount to bypassing the procedure contemplated by the Government and the safeguards to be applied while considering such request.

However, Advocates Johnson Gomez, Sanjay Johnson, Sreedevi S and Muhamed Sheharan appearing for the respondent bank contended that the stipulation in 105D(1) that in addition to the power to act on a letter of request from the Centre, the court can act upon a petition of any person by invoking its powers under Section 105C(1).

Senior Public Prosecutor Ranjit George appeared for the State in the matter. 

The Court observed that while Section 105C(1) enables the court to invoke the powers upon satisfaction of the existence of reasonable grounds that the property was obtained from the commission of a crime, and Section 105C(3) empowers the court to act on the receipt of a letter of request from the Centre.

However, it was observed that when the purpose of Chapter VIIA as a whole is considered, the provisions stipulated in Section 105C(1) cannot be read in isolation.

"It is true that while considering 105C(1) along with Section 105D(1), it may create an impression that the court can act upon the application of any person, being satisfied with the existence of reasonable grounds for the same. However, the crucial aspect to be noticed in this regard is that, even in Sub Section (1) Section 105C, it is contemplated that the powers to be invoked are, as provided under Section 105D to 105J. This would indicate that, while considering the scope of the power of the courts, all the stipulations contained in Chapter VIIA as a whole are to be taken into consideration."

Similarly, the guidelines stipulated by the Government were found to be of crucial importance. They prescribe that providing assistance for attachment and forfeiture of property as contemplated under Chapter VIIA is to be exercised only regarding certain matters and upon satisfying certain conditions.

Therefore, entertaining any request by the courts in India directly from any parties without conducting the exercise as contemplated under the guidelines would defeat the object behind the enactment, it was held. 

"This view is fortified because, the guidelines prescribed in this regard also contain the right of the Central Government to refuse the request on the ground of sovereignty, security, public order and essential public interest of India or a foreign country in this regard. In my view, the competent authority to examine the question as to whether the request made has an impact on the matters such as sovereignty, security, public order, and essential public interest of India or a foreign country and such other matters incidental to it, can only be the Central Government or the authorities specifically authorised by the Central Government in this regard."

Therefore, it was found that allowing any individual or any institution to approach the court directly through an application would be against the interest of the State because the court will have to decide if it has an impact on the sovereignty, security, public order, and essential public interest of India or a foreign country, which may not have the relevant inputs necessary for adjudicating the same.

The Court also pointed out that Section 105C(1) does not specifically mention about submission of an application by an individual or an institution for invoking the powers contemplated under the said Chapter. If the legislature intended to empower the court to initiate such proceedings at the instance of any individual or establishment, the same would have been mentioned explicitly in the provision itself, the Single Judge opined. 

In such circumstances, it was held that the petition was not maintainable before the Judicial First Class Magistrate Court since it was filed by an institution without the same being forwarded by the Central Government or any other authorities in this regard. 

Accordingly, the plea was allowed and the impugned order was set aside. However, it was clarified that this will not preclude the respondent from approaching the Centre or any appropriate authority for invoking the provisions in Chapter VIIA.

Case Title: Muhammed Hasheer Poolakkal v. United Arab Bank & Anr. 

Citation: 2022 LiveLaw (Ker) 181

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