Introduction:
In a noteworthy ruling reinforcing the importance of statutory safeguards in criminal investigations, a Special NDPS Court in Mumbai ordered the defreezing of bank accounts belonging to Bollywood actor Rhea Chakraborty and her mother Sandhya Chakraborty in Sandhya Chakraborty & Anr v. Union of India (Through Narcotic Control Bureau). The order was passed by Additional Sessions Judge U.C. Deshmukh in Special (NDPS) Case No. 344 of 2021, arising out of the high-profile investigation conducted by the Narcotics Control Bureau in connection with alleged drug-related activities linked to the death of actor Sushant Singh Rajput.
The controversy traces its origins to the events following the untimely death of Rajput on June 14, 2020, in Mumbai. During the course of investigations, various central agencies, including the NCB, initiated parallel probes into allegations of drug consumption and trafficking involving individuals associated with the late actor. Rhea Chakraborty emerged as one of the central figures in the investigation, leading to her arrest and subsequent bail granted by the Bombay High Court in October 2020.
As part of its investigation under the Narcotic Drugs and Psychotropic Substances Act, 1985, the NCB froze certain bank accounts belonging to Rhea Chakraborty and her mother, suspecting them to be linked with proceeds of alleged drug-related activities. The freezing of accounts is a coercive measure permitted under the NDPS Act to prevent the dissipation of suspected illicit funds. However, such power is not absolute and is subject to procedural safeguards laid down in the statute.
Central to the dispute in this case was Section 68F of the NDPS Act, which governs the seizure and freezing of property. The provision mandates that any order of freezing passed by an investigating officer must be confirmed by a competent authority within 30 days; failing which, the order loses its legal effect. The applicants approached the Special Court seeking defreezing of their accounts on the ground that this mandatory requirement had not been complied with by the NCB.
The case thus presented a critical question: whether an investigative agency can continue to retain control over an individual’s financial assets in the absence of compliance with statutory procedural requirements. The Court’s ruling ultimately underscores the principle that even in serious criminal investigations, adherence to due process is indispensable.
Arguments of the Parties:
The applicants, Rhea Chakraborty and her mother, challenged the continued freezing of their bank accounts primarily on the ground of non-compliance with the mandatory provisions of the NDPS Act. Their counsel argued that while the NCB may have had the authority to initially freeze the accounts during the course of investigation, such an order could not remain in force indefinitely without confirmation by the competent authority as required under Section 68F(2).
It was submitted that the statute clearly stipulates that a freezing order “shall have no effect” unless it is confirmed within 30 days. In the present case, the NCB had admittedly failed to obtain such confirmation. Therefore, the applicants contended that the continued freezing of their accounts was illegal and without any legal basis.
The applicants further argued that the freezing of bank accounts has serious implications on an individual’s financial autonomy and ability to carry out day-to-day transactions. Such a measure, if not backed by strict adherence to statutory requirements, amounts to an unjustified infringement of rights. They emphasized that procedural safeguards are not mere formalities but essential checks on the exercise of coercive powers by investigative agencies.
On the other hand, the NCB strongly opposed the application for defreezing. Represented by the Additional Public Prosecutor, the agency argued that the freezing of the accounts was justified in light of the allegations against the applicants. It relied on statements attributed to Rhea Chakraborty during the investigation, suggesting her involvement in a drug syndicate and her alleged interactions with drug peddlers.
The NCB contended that the financial transactions reflected in the bank accounts were relevant to the ongoing investigation and that defreezing them could potentially hamper efforts to trace the flow of funds. It maintained that the gravity of the allegations warranted continued restriction on the operation of the accounts.
The agency further argued that the power to freeze accounts is an important investigative tool under the NDPS Act, particularly in cases involving financial transactions linked to drug trafficking. It urged the Court to adopt a pragmatic approach and not allow procedural lapses to undermine the larger objective of combating narcotics-related offences.
However, the NCB did not dispute the fact that it had not obtained the necessary confirmation from the competent authority within the stipulated period. Instead, it sought to justify the freezing on substantive grounds, emphasizing the seriousness of the allegations rather than addressing the procedural deficiency.
Court’s Judgment:
The Special NDPS Court, after considering the submissions of both sides and examining the statutory framework, ruled in favor of the applicants and ordered the defreezing of the bank accounts. The judgment is a clear affirmation of the principle that statutory mandates must be strictly followed, particularly when they involve restrictions on individual rights.
At the heart of the Court’s reasoning was the interpretation of Section 68F of the NDPS Act. The Court noted that the provision explicitly states that an order of freezing “shall have no effect” unless it is confirmed by the competent authority within 30 days. This language, the Court observed, leaves no room for ambiguity and makes the requirement of confirmation mandatory rather than directory.
The Court emphasized that the purpose of this provision is to ensure that the extraordinary power to freeze property is subject to oversight and cannot be exercised arbitrarily. By requiring confirmation from a higher authority, the statute introduces a layer of accountability and prevents misuse of power.
In the present case, it was undisputed that the NCB had failed to comply with this requirement. The Court noted that no order of confirmation had been placed on record, nor was there any explanation for the omission. In such circumstances, the Court held that the freezing order had lost its legal validity by operation of law.
Rejecting the NCB’s argument that the seriousness of the allegations justified the continued freezing, the Court observed that procedural compliance cannot be sacrificed at the altar of investigative convenience. It reiterated that the rule of law demands strict adherence to statutory provisions, irrespective of the nature of the case.
The Court also underscored that administrative or investigative actions must conform to the legal framework within which they operate. Even if the agency had reasons to suspect the involvement of the applicants in illegal activities, it was bound to follow the procedure prescribed by law. Failure to do so rendered its actions unsustainable.
In allowing the application, the Court directed that the applicants be permitted to operate their bank accounts in accordance with the rules and regulations of the Reserve Bank of India. This effectively restored their financial autonomy, subject to any other legal restrictions that may be applicable.
The judgment serves as a reminder that procedural safeguards are integral to the criminal justice system and cannot be overlooked. It reinforces the idea that the legitimacy of investigative actions depends not only on their उद्देश्य but also on their adherence to the rule of law.
In conclusion, the Court’s decision highlights the delicate balance between empowering investigative agencies to combat serious offences and protecting individuals from arbitrary exercise of power. By insisting on strict compliance with statutory requirements, the NDPS Court has upheld the fundamental principle that justice must not only be done but must also be seen to be done within the bounds of the law.