B.KUSUMA RANI vs STATE OF ODISHA(VIG.)

IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.2258 of 2025

An application under Section 528 of the BNSS, 2023.

Smt. B. Kusuma Rani . Petitioner
Mr. Gautam Misra, Senior Advocate
-versus-
State of Odisha (Vigilance) . Opposite Party
Mr. Niranjan Maharana, Addl.
Standing Counsel for Vigilance

CORAM:
THE HON’BLE MR. JUSTICE A.K. MOHAPATRA
Date of hearing : 20.03.2026 | Date of Judgment : 25.06.2026

A.K. Mohapatra, J. :
1. The present CRLMC application has been filed by the Petitioner
with a prayer to quash the impugned order dated 10.03.2025 passed by
the learned Special Judge, Vigilance, Berhampur in M.C. No.19/2023
arising out of G.R. Case No.10/2018(V), at Annexure-4, along with a
further prayer to de-freeze the bank accounts of the Petitioner, as
specified in the schedule attached to the CRLMC petition, which have
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been frozen in connection with Berhampur Vigilance P.S. Case
No.12/2018.
FACTUAL MATRIX OF THE CASE
2. The brief facts of the case leading to the filing of the present
CRLMC application are as follows; the husband of the present Petitioner,
one Dr. B. Gopal Chandra Rao, was serving as a Medical Officer (In-
Charge) at the Community Health Centre (CHC), Buguda, District
Ganjam, Odisha. On 18.11.2017, the Vigilance Department set up a
successful trap in connection with Berhampur Vigilance P.S. Case No.
52/2017 following allegations of demanding and accepting bribe. In the
wake of the said trap case, on 19.11.2017, the Vigilance Department
conducted simultaneous searches at different places to ascertain the
extent of the disproportionate assets allegedly possessed by him and his
family members. Consequently, Berhampur Vigilance P.S. Case No. 12
of 2018 was registered against Dr. B. Gopal Chandra Rao and the present
Petitioner, Smt. B. Kusuma Rani, for commission of offences punishable
under Section 13(2) read with Section 13(1)(e) of the Prevention of
Corruption Act, 1988 (hereinafter "P.C. Act") and Section 109 of the
Indian Penal Code (hereinafter "IPC"). The check period for the alleged
acquisition of disproportionate assets has been fixed as the period from
01.01.2004 to 19.11.2017.
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3. The investigation further revealed that the husband of the petitioner
had allegedly acquired movable and immovable assets worth
Rs.1,37,47,570/- (rupees one crore thirty-seven lakhs thirty one thousand
and sixty one), representing assets disproportionate to the tune of
approximately 179% of his known sources of income during the check
period, thereby constituting disproportionate assets to the tune of
Rs.1,37,47,570/-. With respect to the present Petitioner specifically, the
investigating agency found that she, being a housewife, owned a flat at
Dwarkanagar, Visakhapatnam, a plot at Mogalipuram Village, Andhra
Pradesh (valued at approximately Rs.6,39,000/-), bank balances in
various accounts, and a Hero Pleasure vehicle totaling to Rs.32,64,722/-.
The investigating agency held that the petitioner had no legal or known
sources of income of her own and had purportedly abetted her husband in
the illegal acquisition of assets in her name to shield him from legal
prosecution. Accordingly, the petitioner was arrayed as an accused in the
present case under Section 109 of the IPC read with the aforesaid
provisions of the P.C. Act, 1988.
4. Later on, during the pendency of the investigation, the S.P.,
Vigilance, Berhampur directed the sub-registrar, Vishakhapatnam to not
to effect any transaction of the properties of the Petitioner and the
concerned banks to freeze the bank accounts of the Petitioner, pursuant to
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which all her bank accounts came to be frozen. As a response, the
Petitioner filed an application under section 457 of the Cr.P.C. on
02.05.2023, at Annexure-2, before the learned Special Judge, Vigilance,
Berhampur, bearing M.C. No. 19 of 2023 in G.R. Case No. 10/2018(V),
praying for a direction to lift the attachment order in respect of her
properties and bank accounts. The Prosecution objected to such
application of the Petitioner on 08.07.2024, a copy of which is at
Annexure-3, on the ground that investigation was still ongoing and the
final report had not yet been submitted. Finally, the learned Special Judge
has rejected the section 457 Cr.P.C. application of the Petitioner vide the
impugned order dated 10.03.2025, at Annexure-4. Aggrieved, the
Petitioner has filed the present CRLMC petition with the aforesaid
prayer.
5. It may also be noted that the petitioner had separately filed Misc.
Case No. 20/2025 before the trial court seeking release of the seized cash,
which was allowed on 05.02.2025, an order which stands stayed by this
Court in Criminal Revision preferred by the Vigilance Department. It is
pertinent to note that from the date of registration of the case
(19.03.2018) to the date of the present hearing, more than seven years
have elapsed. As of the date of filing of the present application, no
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charge-sheet had been submitted by the Vigilance Department and
sanction for prosecution was yet to be obtained.
CONTENTIONS OF THE PETITIONER
6. Heard Mr. Gautam Misra, Senior Advocate appearing for the
Petitioner. At the very outset, the learned senior counsel for the Petitioner
asserted that the investigation in the present case, i.e. the Berhampur
Vigilance P.S. Case No. 12/2018, has been pending for more than seven
years without any charge-sheet being filed, even though all the relevant
materials are well within the reach of the investigating agency. Despite
such failure to file the charge-sheet for such a long period of time, the
Petitioner‟s bank accounts have remained frozen throughout. It is the
learned senior counsel‟s contention that the prolonged deprivation of the
Petitioner's rightfully owned funds, without the filing of a charge-sheet,
amounts to a pre-trial punitive measure and constitutes an abuse of the
process of Court.
7. Relying on the judgment of the Hon'ble Supreme Court in
Sunderbhai Ambalal Desai v. State of Gujarat , reported in (2002) 10
SCC 283 , the learned senior counsel for the Petitioner argued before this
Court that considering the long pendency of the investigation, there is no
justification in continuing with the freezing of the bank accounts of the
Petitioner till date. He further submitted that once the Petitioner, who has
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been named as a co-accused in the FIR, acknowledges that the monies in
the frozen bank accounts belong to her, there is no further purpose served
by continued freezing of such bank accounts for the sake of identification
or investigation. Learned senior counsel for the Petitioner contended that
the monies lying in the frozen bank accounts would amount to wastage if
not released, and would inevitably cause irreparable loss to the Petitioner.
As such, the learned senior counsel stated that the conduct of the
Vigilance Department effectively amounts to attachment before judgment
by wrongfully invoking the powers under Section 102 of the Cr.P.C.

8. Arraying the conduct of the Vigilance Department in freezing the
bank accounts belonging to the Petitioner, the learned senior counsel for
the Petitioner contended that the objection filed by the Vigilance
Department on 08.07.2024 in the M.C. Case No.19 of 2023 does not
disclose any cogent material showing that the mandatory procedure in
relation to the freezing of the bank accounts was followed at any point of
time. Since the mandatory procedure has not been complied with, an
order for de-freezing of the accounts mentioned in the schedule to the
petition is well warranted at this stage.
9. Furthermore, the learned senior counsel for the Petitioner
contended that the money in the bank accounts is not liable to become
unavailable merely by reason of withdrawal, since the Court has ample
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jurisdiction to impose adequate safeguards in the form of undertakings,
securities, and/or indemnity bonds. The learned senior counsel also
submitted that it is not open to the Court to freeze a citizen's financial
resources merely out of fear of hypothetical future contingencies.
Moreover, freezing of a bank account is not to be resorted to as the
default rule since it would inevitably lead to indefinite freezing of the
bank accounts and gravely hamper the right to livelihood of the affected
party.
10. The learned senior counsel further contended that the Petitioner has
already provided a comprehensive and adequate explanation of all the
sources of incomes that stand in her name. It was stated that the Petitioner
is engaged in imparting private tuitions and earns income therefrom. In
addition, referring to the Willnama and Gift Settlement Deed at
Annexure-5 series, the learned senior counsel stated that the Petitioner
has also inherited a property at Dondaparthy Village, Visakhapatnam
from her father, from which she has been regularly receiving rental
income. Apart from the aforesaid property, the Petitioner has also
purchased another property at Murali Nagar, Visakhapatnam in 2004
from accumulated savings and rental income, and receives regular rental
income from that property as well. It was further contended that the
Petitioner's husband was in government service and bore the household
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expenses, thereby enabling the Petitioner to invest her rental income in
fixed deposits over the years.
11. Likewise, drawing the attention of this Court to the copies of her
Income Tax Returns for the years 2015-16 to 2019-20 that have been
placed on record as Annexure-6 series, the learned senior counsel for the
Petitioner submitted that the Petitioner has diligently filed income tax
returns showing her legitimate income from house properties and tuitions
conducted by her. It was also contended that the bank accounts in
question were opened by the Petitioner from her stridhan and self-
acquired income, and that the said monies have no nexus with the alleged
disproportionate assets of her husband. The learned senior counsel further
alluded to the contributions made by the Petitioner‟s working daughters
to further strengthen the Petitioner‟s claim to ownership of the monies
stuck in the frozen accounts and contended that the Vigilance authorities
have illegally frozen the Petitioner‟s bank accounts with the sole intent to
harass and cause undue hardship despite there being ample materials to
establish that the proceeds in the frozen accounts are derived solely from
her legitimate earnings.
12. It is also the contention of the learned senior counsel for the
Petitioner that the investigating authority lacks the authority to issue
orders freezing the bank accounts of the Petitioner. However, the learned
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special judge has completely ignored such aspect and rejected the
application of the Petitioner to de-freeze her accounts. It was additionally
submitted by the learned counsel for the Petitioner that the freezing of her
accounts for more than seven years has resulted in severe financial
hardships, deprivation of basic needs, and inability to meet medical and
household obligations. Such a measure, if continued further, becomes
punitive in character. It was stated before this Court that at present the
Petitioner is in urgent need of her savings to meet pressing medical
expenses.

13. As such, the learned senior counsel for the Petitioner submitted that
the impugned order dated 10.03.2025, at Annexure-4, be set aside and the
Petitioner‟s bank accounts, as mentioned in the schedule attached to the
CRLMC petition, be de-freezed. It was stated by the learned senior
counsel that since the Petitioner is a permanent resident of Berhampur,
Ganjam, there is no likelihood of her absconding upon de-freezing of the
accounts. Moreover, the Petitioner also undertakes to comply with any
conditions this Court may hereby impose.
CONTENTIONS OF THE OPPOSITE PARTY-VIGILANCE
DEPARTMENT

14. Heard Mr. N. Maharana, learned Additional Standing Counsel for
the Vigilance Department. At the very outset, the learned ASC
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(Vigilance) submitted before this Court that following the trap set up by
the Vigilance Department, the husband of the present Petitioner was
apprehended as the principal accused in Berhampur Vigilance P.S case
no.52/2017 on the allegations of demanding and accepting bribe.
Consequently, Berhampur Vigilance P.S Case No.12/2018 was registered
for possession of disproportionate assets to the tune of Rs.1,37,47,570/-
against the known sources of income during the check period 01.01.2004
to 11.01.2017. So far as the present Petitioner is concerned, the learned
ASC (Vigilance) contended that despite being a housewife, it was
ascertained that the Petitioner has assets in excess of Rs.32,64,700/-
standing in her name against a verifiable house rent income of only
Rs.92,954/-. He further contended that the Petitioner‟s plea of earning
income from private tuitions and the Income Tax Returns filed by her are
without any legal or known source of income and, are therefore false. As
such, the learned ASC (Vigilance) stated that the Petitioner has
intentionally abetted her husband in possession of disproportionate assets,
and has accordingly been arrayed as an accused under Section 109 IPC.
15. The learned ASC further submitted that the Petitioner‟s accounts
have not actually been attached or confiscated in any manner. Rather, the
concerned banks were only instructed to seize and prohibit withdrawal of
the amounts lying in the said accounts as on the date of search (i.e.,
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19.11.2017) in exercise of the power conferred by Section 102 of the
Cr.P.C., for the purpose of investigation and consequential action as per
law. It was further clarified by the learned ASC (Vigilance) that the
Petitioner is free to operate the said accounts so long as the balance as on
the date of the search is kept intact.
16. Regarding the applicability of the decision in Ratan Babulal Lath
v. State of Karnataka , reported in (2022) 16 SCC 287 , which was
initially relied upon by the Petitioner, the learned standing counsel for the
Vigilance Department strongly contested its relevance to the present case.
It was submitted that the said judgment was pronounced in the context of
the Prevention of Corruption (Amendment) Act, 2018, wherein the
accounts of the accused therein were frozen and attached under the
amended provisions without following the procedure prescribed under
Section 18-A of the amended Act. However, the present case is registered
under the P.C. Act, 1988, i.e., the act as it existed prior to the 2018
Amendment, and no proceedings under Section 18-A have been initiated.
Therefore, the question of compliance with Section 18-A does not arise in
the present case, and the ratio of Ratan Babulal Lath ( supra ) has no
application to the facts of the present case.

17. Learned ASC (Vigilance) further contended that the observations
made in Ratan Babulal Lath ( supra ) have been called into question by
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the Hon'ble Supreme Court in the recent judgment in State of West
Bengal v. Anil Kumar Dey , reported in 2025 SCC OnLine SC 2753 ,
decided on 10.12.2025. The Hon‟ble Apex Court has observed in
paragraph 14 of the said judgment that in the absence of a detailed
discussion of the scheme of the Act, its provisions and its interplay with
other procedural laws, the conclusion arrived at in Ratan Babulal Lath
( supra ) cannot be said to constitute a ratio decidendi and would not be
binding on all courts under Article 141 of the Constitution. Furthermore,
it has again been clarified by the Hon‟ble Apex Court in paragraph 15
that Ratan Babulal Lath ( supra ) does not discuss the facts of the matter
in light of which the observations were made therein and, therefore, does
not constitute a binding precedent.
18. Next, the learned ASC (Vigilance), referring to the judgment of the
Hon‟ble Supreme Court in Court in State of Maharashtra v. Tapas D.
Neogy , reported in (2000) 18 OCR (SC) 711 , stated before this Court that
the bank account(s) of the accused or any of his/her relations can be
considered as “property” within the meaning of Section 102 of the
Cr.P.C. and, a police officer, in the course of investigation, can seize or
prohibit the operation of the said account if such assets have direct links
with the commission of the offence under investigation. He further stated
that the object of Section 102 Cr.P.C., which is to preserve assets which
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have a direct nexus with the offence, would be entirely defeated if the
money could be withdrawn by the co-accused-Petitioner prior to the
conclusion of the trial. To further corroborate his arguments, learned ASC
referred to the decision of this Court in Pradeep Kumar Satapathy v.
State of Orissa (Vigilance Department) , reported in (2017) 66 OCR 157 ,
which followed and applied Tapas D. Neogy ( supra ) in the context of the
P.C. Act, 1988, and contended that the very purpose for which the
Investigating Officer is vested with power under Section 102 Cr.P.C.. to
seize bank accounts would be defeated if the monies deposited therein
were allowed to be withdrawn by the accused before the conclusion of the
trial.
19. In a similar vein, relying on the dictum in Teesta Atul Setalvad v.
State of Gujarat , reported in (2018) 2 SCC 372 , the learned ASC
(Vigilance) submitted that the Hon'ble Supreme Court has confirmed that
an investigating officer, in the course of investigation, can seize or
prohibit operation of the bank account(s) of any person in the event there
exist circumstances which give rise to a suspicion of commission of any
offence, and that the bank account(s) need not be solely that of the
accused. The Hon'ble Supreme Court in the aforesaid case also held that
while an application for de-freezing may be considered after the
investigation is complete and the police report is submitted, it would not
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be appropriate to analyse and decide de-freezing applications when the
investigation is still in progress. Rather, the Petitioner is required to
explain her position to the investigating agency, and it is only after
investigation is complete that the matter can proceed further.
20. With regard to the contention of the Petitioner that the
investigation has already been delayed for long, the learned ASC
(Vigilance) submitted that the delay in completion of the investigation is
attributable to the Petitioner and her husband on account of non-
submission of original documents and deliberate concealment. He further
stated that the investigation involves gathering documents from various
departments, and institutions which takes considerable time. It was
contended that as of now, the investigation is stated to be at its fag end
and the charge-sheet is to be submitted shortly after obtaining sanction
for prosecution.
21. At this stage, the learned ASC (Vigilance) referred to the IT returns
filed by the Petitioner and stated that mere filing of IT Returns, without
any known legal source of income, will not legalise the ill-gotten monies
in a disproportionate assets case. Reliance was placed on State of
Karnataka v. J. Jaya Lalita , reported in (2017) 6 SCC 515 , and Punit
Sabharwal v. CBI bearing 2024 INSC 221 and decided on 19.03.2024, to
contend that that Income Tax assessment proceedings relate to the
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assessment of income and not to the sources of income, and that
exoneration in Income Tax proceedings cannot form the basis to abort a
criminal proceeding in a disproportionate assets case under the PC Act.
Lcop, further contended that the judgement in Sunderbhai Ambalal
Desai v. State of Gujarat , reported in (2002) 10 SCC 283 relied by the
Petitioner, is also not applicable to the facts of the present case since the
aforesaid judgement deals with the release of goods/property which is
subject to natural decay or damage. Whereas, the present case involves
monies kept in bank accounts.

22. Lastly, referring to a judgement of this Court in Lakshman
Srinivasan v. Republic of India (CBI) in CRLREV No. 660/2024 ,
decided on 10.04.2025, learned ASC (Vigilance) submitted that so far as
the release of bank deposits is concerned, distinct principles have been
culled out by this Court in para 12 of the aforesaid judgement.
Accordingly, the learned ASC (Vigilance) submitted that the monies in
the frozen bank account of the Petitioner cannot be released without
sufficient bank guarantee or proportionate tangible security. In such view
of the matter, the learned ASC submitted that the present CRLMC
application, being devoid of merit, is liable to be dismissed forthwith.
ANALYSIS OF THE COURT
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23. Heard the learned senior counsel for the Petitioner and the learned
ASC for the Vigilance Department. Perused the CRLMC petition, the
documents attached thereto, the notes of submission by the parties and the
objection by the Vigilance Department. In order to fairly adjudicate the
prayer of the Petitioner, this Court is required to determine whether the
Petitioner has made out a case for de-freezing of her bank accounts,
having regard to the several grounds pleaded by the Petitioner. Since the
present case involves offences under the P.C Act, 1988 and the accounts
of the Petitioner have been frozen under section 102 of the Cr.P.C., it
would be apt to first establish the applicability of section 102 Cr.P.C. to
the P.C Act, 1988.
24. A perusal of Section 102 of Cr.P.C. reveals that the provision
empowers the police authorities to seize certain properties. Section 102(1)
Cr.P.C. empowers any police officer irrespective of his rank to seize any
property which gives rise to any suspicion of commission of an offence.
Similarly, Section 102(2) obligates the investigating officer to report the
seizure of property to the officer-in-charge of the police station, if the
investigating officer is subordinate to the officer-in-charge. The use of the
word “may” instead of “shall” denotes that such power of seizure is
discretionary in nature. Additionally, the use of the terms “any offence”
and “any property” in Section 102(1) of the Cr.P.C. open the wide gates
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for the police officer to seize any property under the suspicious
circumstances under any statute. In State of Maharashtra v. Tapas D.
Neogy , reported in (1999) 7 SCC 685 , the Hon‟ble Apex Court laid down
two mandatory conditions, i.e. there must be a property and in respect of
that specific property there must be a suspicion of commission of any
offence, which must be satisfied for Section 102 Cr.P.C. to apply.
25. So far as the question regarding the various kinds of properties
which can be seized by the police under Section 102 Cr.P.C is concerned,
the Hon‟ble Supreme Court in M.T. Enrica Lexie v. Doramma , reported
in (2012) 6 SCC 760 clarified that a property shall fall within the ambit of
“any property” under section 102(1) Cr.P.C. if it was stolen or suspected
to be stolen and the property is directly linked to the crime. Any property
which is not under the suspicion of commission of offence and is not
being investigated by the police authorities cannot be seized by police
under the ambit of Section 102 Cr.P.C. Similarly, the question of whether
a bank account constitutes “property” for the purpose of section 102
Cr.P.C. was conclusively resolved by the Hon'ble Supreme Court in State
of Maharashtra v. Tapas D. Neogy , reported in (2000) 18 OCR (SC)
711 . The Hon‟ble Apex Court, after considering divergent views taken by
various High Courts, emphatically held that a bank account of the
accused or any of his relations is “property” within the meaning of
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Section 102 Cr.P.C., and that a police officer can seize or prohibit the
operation of such account if the assets therein have direct links with the
commission of the offence under investigation. The Hon‟ble Court
reasoned that a narrow interpretation would allow the accused to
withdraw the entire ill-gotten money from the bank, thereby rendering the
court powerless to recover it upon conviction.
26. The observation in Tapas D. Neogy ( supra ) was continued in
Teesta Atul Setalvad v. State of Gujarat , reported in (2018) 2 SCC 372 ,
wherein the Hon‟ble Supreme Court confirmed that the investigating
officer can seize or prohibit the operation of a bank account of any person
if there are circumstances creating suspicion of commission of an
offence, and that the account need not be only that of the accused, instead
it can be any account that creates such suspicion. Additionally, recently in
State of West Bengal v. Anil Kumar Dey , bearing Criminal Appeal
No.5373 of 2025 (arising out of SLP(Crl.) No.1003 of 2025 ), decided on
10.12.2025, the Hon‟ble Apex Court, after a detailed analysis of the P.C
Act, 1988, the Cr.P.C, and prior judicial pronouncements on the topic,
answered in affirmative the question of whether it would be open for the
investigating authorities (police) to freeze the accounts of persons
accused under the provisions of the P.C. Act, 1988, under Section 102
Cr.P.C. the Hon‟ble Court further clarified that the general seizure power
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under the Cr.P.C. operates independently of, and alongside, the special
attachment mechanism incorporated through Section 18A of the amended
PC Act, 2018. Therefore, it is clear that investigating agency was legally
empowered to freeze the Petitioner‟s bank accounts under Section 102
Cr.P.C. in a case registered under the P.C. Act, 1988. The freezing of a
bank account under Section 102 Cr.P.C. is a well-recognised exercise of
investigative power and is not, by itself, illegal or without authority of
law.
27. Furthermore, in the original round of submissions the Petitioner
had originally relied on the dictum of the Hon‟ble Supreme Court in
Ratan Babulal Lath v. State of Karnataka , reported in (2022) 16 SCC
287 to contend that the freezing of her bank accounts cannot be sustained
taking recourse of Section 102 Cr.P.C. since the PC Act is considered a
complete code in itself and any freezing of properties has to be done as
per the procedure under the said Act. The aforesaid contention of the
Petitioner no more holds ground in light of the latest pronouncement of
the Hon‟ble Apex Court in State of West Bengal v. Anil Kumar Dey ,
reported in 2025 SCC OnLine SC 2753. Significantly, in her „Revised
Notes of Submissions‟, the Petitioner has herself placed on record the
subsequent judgment of the Hon'ble Supreme Court in Anil Kumar Dey
( supra ) and so has the Opposite Party-Vigilance Department. Therefore,
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as it appears, the aforesaid judgment is now common ground between the
parties, albeit framed somewhat differently by both.
28. A careful reading of paragraphs 12 to 15 of Anil Kumar Dey
( supra ) shows that the Hon'ble Supreme Court did not, in terms,
“overrule” Ratan Babulal Lath ( supra ) on merits, nor did it pronounce
definitively on whether the P.C. Act, 1988 is a self-contained code or not.
What the Hon‟ble Court instead observed, after applying the doctrine of
sub silentio explained in MCD v. Gurnam Kaur , reported in (1989) 1
SCC 101 and the three-fold test of ratio decidendi referred to in Jayant
Verma v. Union of India , reported in (2018) 4 SCC 743 [drawing upon
the dissenting opinion of Justice A.P. Sen in Dalbir Singh v. State of
Punjab , reported in (1979) 3 SCC 745 ] is narrower. It was held that the
brief order in Ratan Babulal Lath ( supra ), having been passed without a
discussion of the facts of that case or of the scheme of the P.C. Act and its
interplay with the Cr.P.C., does not constitute a binding ratio decidendi
under Article 141 of the Constitution. The Court expressly clarified in
paragraph 15 that its observations “do not hold, either way, as to its status
as a code” and are “only confined to the precedential value of Ratan
Babulal Lath.”

29. The consequence of the aforesaid observations is that this Court is
not bound by the bare conclusion in Ratan Babulal Lath ( supra ) that
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freezing of a bank account under Section 102 Cr.P.C. is impermissible
merely because the case arises under the P.C. Act, 1988. Since both
parties, on the material now before this Court, appear to be ad idem that
Ratan Babulal Lath ( supra ) does not, by itself, settle the question one
way or the other, this Court must therefore examine the question of the
validity of the freeze on its own footing, untrammelled by any supposed
binding effect of Ratan Babulal Lath ( supra ).
30. The Petitioner has further contended that the investigating
authorities, in their objection, have failed to demonstrate that the
procedure prescribed for freezing bank accounts was duly followed prior
to freezing the accounts of the Petitioner. On that basis, the Petitioner has
put forth the argument that the entire exercise stands vitiated for non-
compliance with the prescribed procedure. This Court is unable to locate
any merit in the aforesaid contention. The Petitioner has neither identified
any specific procedural irregularity nor pointed out any particular
omission on the part of the Vigilance Department that would indicate a
departure from the procedure contemplated by law. In the absence of any
such material, this Court is unable to conclude that the freezing of the
Petitioner‟s bank accounts suffers from any procedural infirmity.
Independently of the aforesaid submission, the Petitioner has prayed for
de-freezing of her bank accounts on two principal grounds; firstly , that
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the investigation has remained pending for over seven years without
culmination and secondly , that the Petitioner has satisfactorily explained
the sources of all funds credited to the frozen accounts and that such
explanation establishes that the monies in question were derived from
lawful and legitimate sources.
31. Regarding the Petitioner's contention that she has independent,
legitimate sources of income, namely income from private tuitions and
rental income from inherited and self-acquired properties at
Visakhapatnam, and that her bank accounts are entirely the product of her
own earnings, this Court is of the view that such a contention cannot be
evaluated at this stage with the degree of finality that would warrant an
outright de-freezing of her bank accounts. Instead, It is for the
investigating agency and, ultimately, the trial court, to assess the truth or
otherwise of these claims upon completion of investigation and
submission of the charge-sheet. The investigating agency, on the other
hand, has asserted that the Petitioner's explanations of her sources of
income were investigated and found to be unsatisfactory, and that her
claim of tuition income was a false plea.
32. It is a settled position of law, as has been expressed in Vishwanath
Chaturvedi v. Union of India , reported in (2007) 4 SCC 380 ; State of
Karnataka v. Selvi J. Jayalalitha , reported in (2017) 6 SCC 263; and
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Puneet Sabharwal v. CBI , reported in 2024 INSC 221 , that proceedings
under the Income Tax Act and prosecutions under the PC Act operate in
distinct arenas. An assessment made by the Income Tax authorities is
primarily for determining tax liability and does not constitute a
conclusive adjudication regarding the legality or legitimacy of the source
from which the income or assets were derived. Consequently, acceptance
of income in tax proceedings, or the mere filing of Income Tax Returns,
cannot by itself furnish a basis for terminating, quashing, or otherwise
stalling a disproportionate-assets prosecution. The fact that an income or
asset has been disclosed for taxation purposes does not, without more,
establish that it originated from lawful or satisfactorily explained sources.
33. However, having said that, this Court cannot be unmindful of the
substantial period of time that has elapsed since the accounts were frozen
and the investigation began. The Vigilance P.S. Case No.12 of 2018 was
registered on 19.03.2018 and the accounts have been frozen since
19.11.2017, i.e. since the date of the search . As of the date of the
present petition, a period of over seven years has elapsed without a
charge-sheet being filed in the case, which amounts to an inordinately
long period. The investigating agency has attributed the delay to non-
submission of documents by the accused persons and to the time required
for collecting material from multiple sources. However, this Court deems
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it appropriate to note that the prolonged continuation of freezing of the
accounts without any progress in the investigation, and without the filing
of a charge-sheet, begins to take the character of a de facto penalty rather
than a legitimate investigative measure.
34. Moreover, it is necessary to consider the consequences of the
continued freezing of the Petitioner's bank accounts from the standpoint
of irreparable prejudice. At this stage, the Petitioner is merely an accused
who has neither been tried nor convicted. If, upon the eventual conclusion
of the proceedings, which, having regard to the present pace of the
investigation may not occur for several years, the Petitioner is ultimately
acquitted, no subsequent order of restitution would be capable of fully
compensating her for the deprivation suffered during the intervening
period. The prolonged freezing of a person's financial resources carries
consequences that are often incapable of precise quantification. Such
consequences may include the loss of legitimate investment and business
opportunities, the erosion of the value of money over time, the inability to
meet personal, familial, or medical obligations, and other forms of
economic disadvantage that cannot readily be undone by a subsequent
order in the person's favour. Therefore, this Court must remain conscious
of the fact that, in a scenario where such restraints continue for an unduly
prolonged period without culmination of the investigation, there exists a
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real possibility that a person who is ultimately found not guilty, may
nevertheless, have suffered substantial and irretrievable prejudice solely
by reason of the pendency of the proceedings.
35. As has already been established above, Section 102 Cr.P.C. is
clearly an investigative tool, which unambiguously leads to the inference
that the seizure orders under Section 102 Cr.P.C. are only in effect to aid
investigation. Once the purpose of aiding investigation is exhausted or the
investigation is inordinately prolonged, the justification of continuing to
freeze the property, i.e. bank accounts in the present case, tends to
crumble away. Especially since the right to property, although no longer a
fundamental right, remains a constitutional right under Article 300-A.
Equally, Articles 21 and 19(1)(g) of our Constitution protect the right to
livelihood and the right to carry on a profession, both of which are
affected when a person's bank accounts are frozen for an extended
duration without any formal legal action being initiated.
36. As has already been observed hereinabove, Section 102 Cr.P.C. is
fundamentally an investigative measure. The power of seizure
contemplated thereunder is intended to facilitate and aid the process of
investigation. Consequently, once the purpose of aiding investigation is
exhausted, or where the investigation remains pending for an inordinately
prolonged period without meaningful progress, the justification for the
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continued freezing of the property concerned, i.e. the Petitioner‟s bank
accounts in the present case, necessarily becomes attenuated. This
assumes greater significance when viewed in light of the constitutional
protections available to a citizen. Although the right to property is no
longer a fundamental right, it nevertheless continues to garner
constitutional protection against deprivation of such property right under
Article 300-A of the Constitution. Further, prolonged freezing of bank
accounts may directly invade upon an individual‟s right to life and
livelihood under Article 21 and, where applicable, the freedom to carry
on any profession, occupation, trade or business guaranteed under Article
19(1)(g). Such restrictions, therefore, cannot be permitted to continue
indefinitely in the absence of compelling justification and diligent
progress in the investigation.
37. Furthermore, Section 102 Cr.P.C. does not confer upon the
investigating agency a power of indefinite or open-ended seizure. The
provision is housed in Chapter VII of the Cr.P.C., which relates to
“Processes to Compel the Production of Things” and its object, as has
been discussed hereinabove, is purely facilitative, i.e. to preserve property
during the investigation so that it is not disposed of or destroyed before
the investigating agency can examine its evidentiary value. This implies
that the power to freeze the Petitioner‟s accounts is parasitic on the
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investigation. Such power has no independent life once the investigation
either concludes or is shown to have made no meaningful progress for an
inordinate length of time. In State of West Bengal v. Anil Kumar Dey ,
reported in 2025 SCC OnLine SC 2753 , the Hon‟ble Supreme Court after
analysing a catena of judgements relating to Section 102 of the Cr.P.C.,
summarised the aspects of the provision in para 9 thereof. In para 9.2, the
Hon‟ble Apex Court observed that the section is not an enabling
provision to be used by the investigating authorities to seize the property.
Likewise, in para 8 of the aforesaid judgement, the Hon‟ble Court has
drawn a sharp distinction between temporary seizure under Section 102 to
aid in investigation, and long-term confiscation of property under section
18A of the 2018 PC Act. For clarity, additional relevant portions of the
judgement is quoted hereinbelow:
“ 11. A detailed analysis of the provisions concerning
attachment given in the Ordinance as also the other Acts, the
steps of which have been detailed above, is an effort to
juxtapose the procedure laid down in different statutes,
showing that attachment is a consequence which is given
effect to after due application of mind and compliance with
procedure. It is not a decision that can be taken on the spur
of the moment. It is not a decision that can be taken by a
single person. The situation prevalent on the ground and in
response to the situation as it may be developing, has to be
considered. Instead, the law provides detailed steps and
procedures to be complied with before someone's property
can be attached. Now, contrasting this with the power
contained under Section 102 Cr. P.C., it is clear from the text
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reproduced supra that it allows ‘any police officer’ to ‘seize
any property’, and in order to balance the scales, requires
that once such a seizure is done, information thereof has
been sent forthwith to the concerned Magistrate…
…
While it is undoubted that in ordinary circumstances,
information is to be sent to the Magistrate, in certain
circumstances, if that is not done, even then the seizure will
not be vitiated. This indicates the width of the power granted
to the police with the sole aim of smooth facilitation of the
investigation. As evidenced by the procedure given in the
Ordinance, it is sequential and has to be compliant with
principles of natural justice, for it to survive scrutiny. It is
necessarily time consuming and deliberative. The difference
between the two processes is, therefore, clearly exhibited. In
essence, we hold that the power of seizure and attachment are
separate and distinct, even if, to the naked eye it may so
appear, that the effect is same/similar which is, that the
property is taken into custody of, by the authority, either
investigative or judicial. Consequentially, the conclusion to be
drawn is that the powers under Section 18A of the PC Act and
Section 102, CrP.C. are not mutually exclusive… ”
A careful reading of the aforesaid distinction delineated by the
Hon'ble Apex Court makes it clear that the expediency and flexibility
inherent in a seizure under Section 102 of the Cr.P.C. cannot be stretched
to supplant, pre-empt, or bypass the statutory framework governing
attachment of property. It follows, a fortiori, that once an investigation
has remained inconclusive for seven years without even a charge-sheet
being filed, the freezing order can no longer be said to be “aiding” an
investigation in any real sense. It has, instead, transformed into a de facto
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permanent confiscation, achieved without the crucial safeguards built into
Section 18A of the P.C Act for exactly that purpose.
38. In a similar vein, while the Hon‟ble Supreme Court was once again
examining the scope and scheme of Section 102 of the Cr.P.C. in Shento
Varghese v. Julfikar Husen , bearing 2024 INSC 407 specifically the
word “forthwith” as used in Section 102(3), it was concluded that the use
of the word “forthwith” signifies “ as soon as may be ”, “ with reasonable
speed and expedition ”, “ with a sense of urgency ”, and “ without any
unnecessary delay ”. In other words, it would mean “ as soon as possible,
judged in the context of the object sought to be achieved or
accomplished. ” (see para 22 to 25 of the judgment). Such interpretation
once again represents the legislative intent that the entire Section 102
mechanism, from seizure to reporting to its eventual release or escalation
into formal proceedings, is meant to operate with reasonable expedition.
A provision whose very triggering obligation is calibrated to promptness
cannot, in the same breath, be read as authorising the underlying seizure
to persist indefinitely while the formal investigation drags on for years.
The internal logic of the section points toward proportional, time-bound
restraint and not indefinite retention as a default state.

39. Reverting to the facts of the case at hand, after more than seven
years of the registration of the FIR, the investigation in the matter shows
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no signs of nearing a conclusion and as a result, no charge sheet has been
filed as of yet. However, throughout this entire duration the Petitioner‟s
bank accounts, as described in the schedule to the present CRLMC
petition, continue to remain frozen even after the lapse of a substantial
period. The Opposite Party-Vigilance Department has attempted to
explain the delay by attributing it to the alleged non-cooperation of the
accused persons, their failure to produce relevant original documents, and
the difficulties faced in securing and verifying records from official
sources. Be that as it may, such reasons cannot satisfactorily account for
the extraordinary delay in completion of the investigation. This Court is,
therefore, unable to accept the aforesaid justification. The freezing of the
Petitioner's, i.e. the co-accused and wife of the principal accused, bank
account for seven years, without a charge-sheet being filed against her
and without any demonstrated investigative step pending qua that specific
account, has outlived the statutory purpose of Section 102 as
authoritatively explained in Anil Kumar Dey ( supra ).
40. The continuation of an absolute freeze for an indefinite and open-
ended period, without any charge-sheet having been filed, no longer
serves an evidentiary or preservative function and is not in the interest of
justice and imposes a disproportionate burden on the petitioner. Instead, it
operates as a punitive deprivation of property without trial which is
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contrary to the preventive character of Section 102 Cr.P.C. and contrary
to Articles 21 and 300-A of the Constitution. However, at the same time,
an absolute and unconditional de-freezing of all accounts at this stage,
while the investigation is stated to be at its “fag end”, would be premature
and contrary to the legislative intent behind the P.C. Act. Allowing the
monies to be withdrawn freely at this stage, would risk defeating the
ultimate purpose of recovery of disproportionate assets if the Petitioner is
eventually convicted. In the case at hand, the Opposite Party has itself
stated in its objection affidavit that the Petitioner may be allowed to
operate her frozen accounts subject to her furnishing bank guarantee of a
similar amount. Likewise, the Petitioner has also expressed her
willingness to abide by any conditions/security imposed by this Court in
the event of de-freezing of her account.
41. Therefore, given that both parties are now agreeable to a de-
freezing of the account in exchange for proportional security (rather than
continued restraint of the account itself), this Court is of the view that a
middle course is warranted and the Petitioner should be given limited
relief by permitting her to operate the frozen accounts to the extent of any
amounts that have accrued in those accounts after 19.11.2017 (i.e.,
interest, if any, accrued on fixed deposits beyond the principal amounts
frozen as on the date of search), while the principal amounts frozen as on
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19.11.2017 shall remain protected. Additionally, in the event the
petitioner furnishes a Collateral Security/Property Security in favour of
the State of Odisha for the total frozen amount, the accounts shall stand
de-freezed.
42. In view of the foregoing analysis, and specifically having regard to
the inordinate delay of more than seven years in completing the
investigation and filing a charge-sheet, which has had the effect of
imposing disproportionate hardship on the petitioner, this Court is of the
view that the Petitioner is entitled to limited, conditional relief.
Accordingly, the impugned order dated 10.03.2025 passed by the learned
Special Judge, Vigilance, Berhampur in M.C. No. 19/2023 arising out of
G.R. Case No. 10/2018(V), at Annexure-4, is hereby modified to the
following extent; firstly , the ten bank accounts of the Petitioner
mentioned in the schedule to the petition shall continue to remain frozen
to the extent of the principal amounts/balances standing in the said
accounts as on 19.11.2017 (i.e. the date of the search). The Petitioner
shall be entitled to receive and withdraw only the interest or dividend, if
any, that has accrued on the frozen amounts after 19.11.2017, subject to
the said amounts being verified and confirmed by the respective banks.
Secondly , in the alternative, if the Petitioner furnishes equivalent property
security of the same amount in favour of the Presiding Officer of the Trial
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Court, for an amount equivalent to the total of the principal amounts
frozen as on 19.11.2017, within a period of eight weeks from the date of
this order, all ten accounts mentioned in the schedule shall stand
unconditionally de-frozen.
43. Furthermore, the Vigilance Department is directed to complete the
investigation and submit the charge-sheet before the competent court
within outer limit of six (6) months from the date of this order, after
obtaining the necessary sanction for prosecution. In the event the charge-
sheet is not filed within the aforesaid period, the petitioner shall be at
liberty to move the concerned Court for de-freezing of the accounts
unconditionally, and the said court shall consider such an application on
its merits in accordance with law
44. Accordingly, the CRLMC petition is disposed of.

(Aditya Kumar Mohapatra)
Judge
Orissa High Court, Cuttack
th
The 25 June, 2026/ S.K. Rout, Jr. Stenographer

Signature Not Verified
Digitally Signed
Signed by: SANTANU KUMAR ROUT
Reason: Authentication
Location: High Court of Orissa, Cuttack
Date: 29-Jun-2026 11:52:13
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