The Supreme Court recently, in its ruling passed on October 10 in Central Bureau of Investigation v. Mayanglambam (N) Naorem Manimacha Devi and Anr, was faced with a question on the applicability of the Code of Criminal Procedure, 1973 (CrPC) to offences covered under the Prevention of Corruption Act, 1988 (PC Act). More specifically, the issue involved was whether Section 102 of the CrPC, which deals with powers of the police officer to seize certain property, was inapplicable to offences under the PC Act in light of Section 18A of the PC Act.
Section 18A of the PC Act stipulates that the provisions of Criminal Law Amendment Ordinance, 1944 shall apply in cases relating to attachment, administration of attached property and execution of order of attachment or confiscation of money or property procured by means of an offence under the PC Act.
The ruling of the Supreme Court in Ratan Babulal Nath v. State of Karnataka dated September 6, 2021 becomes important in this regard. On being faced with a situation where bank accounts of the petitioner were attached under Section 102 CrPC for offences under the PC Act, the Court stipulated that recourse to Section 102 CrPC was not possible inasmuch as th PC Act was a complete code in itself. While the order in Ratan Babulal Nath was not very detailed, it certainly paved the way for challenging actions of the government in the event of confiscation or attachment of properties under Section 102 of the CrPC for offences under the PC Act.
In this context, the facts of three connected Special Leave Petitions in Central Bureau of Investigation v. Mayanglambam (N) Naorem Manimacha Devi and Anr were broadly similar. Searches were conducted after registration of complaints under the PC Act and subsequently, incriminating articles (including bank accounts) were seized by officials under Section 102 CrPC. While relying on the ruling of Ratan Babulal Nath, the Manipur High Court at Imphal in all three cases set aside the action of the Central Bureau of Investigation (CBI) on the reasoning that Section 18A prescribes a special procedure for offences under the PC Act. Accordingly, the attachments ought to have been carried out after following the procedure under the Criminal Law Amendment Ordinance, 1944 and not under Section 102 CrPC.
Interestingly, at the initial stage of the proceedings in the connected SLPs, the Supreme Court through the Bench of Justices Hemant Gupta and Vikram Nath, while issuing notice vide order dated August 28, 2022, took a completely contrary view to Ratan Babulal Nath and stated,
"The learned counsel for the petitioner contends that in terms of Section 22 of the Prevention of Corruption Act, 1988, the provisions of the Code of Criminal Procedure, 1973 are applicable in the proceedings under the said Act. Section 18A of the Act will not override the provisions of Section 22 of the Cr.P.C."
The final order in the case delivered on October 10, 2023 by a Bench of Justices AS Bopanna and MM Sundresh, however, did not dive deep into the issue. The Bench instead took the view that since only Section 102 of the CrPC was invoked and an attachment under Section 18A of the PC Act was not carried out, the issue of conflict between the two did not arise in the present case.
"Having heard the learned ASG for the petitioner(s) as also the learned counsel for the respondent(s) and on taking note that the order relates to an interim custody of the seized articles, we see no reason to interfere at this stage. However, question of law, as sought to be put forth, are left open to be considered if it arises in a situation in a particular case. All contentions in that regard are left open."
The order clearly leaves you asking for more in terms of clarity on the issue.
The Supreme Court, most importantly, failed to note the continuing problem that law enforcement agencies are facing in view of the decision in Ratan Babulal Nath. As soon as seizure takes place under Section 102 CrPC, the accused moves court seeking to quash the proceedings on the basis of Section 18A of the PC Act. Accordingly, before the authorities can take any action under Section 18A, the items that have been seized are released.
It is practically not possible for law enforcement agencies to opt for the procedure under Section 18A in cases of emergency and swift action, in cases where property is discovered during searches. Accordingly, the seizure of items can only take place under 102 CrPC. It is pertinent to note that the Court, while premising its reasoning on procedural points that Section 18A of the PC Act does not have to be invoked subsequent to Section 102 CrPC, does not provide any timeline for such invocation or a mechanism by which both the provisions can be put to use while ensuring that the department is not constrained to release seized items.
While the Supreme Court refused to go into the issue of applicability of Section 102 CrPC to offences under the PC Act on the factual ground that Section 18A was never invoked by the authorities in the present case, the High Court in its rulings has set aside seizure orders by considering them illegal from the time Section 102 CrPC was first invoked. The High Court does not discuss an alternative mechanism for the agencies in terms of invocation of 18A subsequent to the seizure of items under Section 102 CrPC.
If one was to see the matter purely on legal grounds, the following points become important:
1. Section 102 of the CrPC and Section 18A of the PC Act operate in completely different domains. Section 102 talks about seizures (which may take place on suspicion of the commission of an offence) and Section 18A talks about attachment. In fact, the Criminal Law Amendment Ordinance, 1944, to which Section 18A refers to, only details the procedure for attachment and administration of property and does not stipulate anything on seizures. Therefore, a harmonious construction of Section 102 of CrPC and Section 18A of the PC Act would necessarily include situations where the concerned department/officers have the liberty to invoke the procedure under Section 18A of the PC Act in the event they have invoked Section 102 of the CrPC initially.
2. The PC Act, by way of Section 22, itself provides for the application of CrPC with certain modifications and accordingly makes it clear that CrPC would apply to offences under the PC Act subject to the modifications provided under Section 22.
3. Additionally, in the event the argument is that Section 102 CrPC and 18A of the PC Act operate in the same field, the settled legal position is that attempts need to be made to read the provisions harmoniously, unless they are completely inconsistent with each other.
The Supreme Court in Deep Chand and Ors v. State of UP and Ors had held that for inconsistency to exist between two provisions, there has to be a direct conflict between the two provisions and there has to be inconsistency in the actual terms of the competing statutes.
Subsequently, the Supreme Court in TS Balliah v. TS Rangachari held that for a provision to be not operative (repealed by implication), there has to be complete inconsistency between the two and no possibility of reconciliation.
The Supreme Court thereafter in M Karunanidhi v. Union of India and Another laid down the following principles on issue of inconsistency and repugnancy between two provisions:
"35. On a careful consideration, therefore, of the authorities referred to above, the following propositions emerge:
1. That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field.
2. That there can be no repeal by implication unless the inconsistency appears on the face of the two statutes.
3. That where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results.
4. That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field."
Recently, the Supreme Court in its decision in Innoventive Industries Limited v. ICICI Bank and Another, while reiterating the above principles, has categorically stipulated that there would only be inconsistency when two enactments are in direct collision with each other.
4. It is also pertinent to note that Section 18A uses the phrase "shall, as far as may be, apply," thereby clearly hinting that the procedure under Section 18A would not apply when it is not practically possible to do so. The Supreme Court decision in Dr. Pratap Singh and Another v. Director of Enforcement, Foreign Exchange Regulation Act and Ors becomes important in this context. While dealing with the phrase "as far as may be," the Court held as follows:
"The expression “so far as may be” has always been construed to mean that those provisions may be generally followed to the extent possible."
With the Supreme Court leaving open these questions of law for a more appropriate case, one can only hope that this aspect is clarified by a ruling sooner than later.
Gibran Naushad is a lawyer based in Delhi and Founder of the Chambers of Gibran Naushad.
Disclosure: He was one of the counsel appearing for CBI in the connected SLPs.