Anupama Sahoo vs. State Of Punjab And Others

Facts

The petitioner, Anupama Sahoo, is a director of Bluepen Laboratories Pvt. Limited. Her husband, Manoj Kumar Sahoo, is accused in FIR No.305 dated 21.12.2022, registered under the NDPS Act and IPC sections, for allegedly purchasing and selling narcotic drugs in violation of license terms, including to firms with fake licenses. During the investigation, communications dated 21.02.2023 were sent to HDFC Bank and ICICI Bank directing them to stop operations of bank accounts belonging to Manoj Kumar Sahoo, through which drug proceeds were allegedly received. These accounts were consequently frozen. The petitioner challenges these communications, arguing they violate Sections 68-E and 68-F of the NDPS Act.

Held

The Court held that the communications dated 21.02.2023, directing the freezing of bank accounts, cannot be sustained in law. The reasoning was based on the non-compliance with the procedure laid down in Section 68F read with Section 68E of the NDPS Act. The Court referred to the Supreme Court's decision in Aslam Mohd. Merchant, which emphasizes the necessity of identifying illegally acquired property, arriving at a satisfaction by the authority, and issuing a show cause notice before forfeiture or freezing. The Court noted that the respondents conceded that an appropriate freezing order under Section 68F had not been issued and that the communications were sent without following the due procedure. Consequently, the communications were set aside. However, the Court clarified that the respondents are at liberty to seize or forfeit the accounts after following the due procedure as laid down in Section 68F read with Section 68E of the NDPS Act, as explained in the Aslam Mohd. Merchant case.

Key Issues

1. Whether the communications dated 21.02.2023, directing the freezing of bank accounts, are invalid for non-compliance with the procedure laid down in Sections 68-E and 68-F of the NDPS Act, and for violation of principles of natural justice, as argued by the petitioner. Petitioner's arguments: The petitioner contends that the procedure for freezing illegally acquired property under the NDPS Act was not followed, and no opportunity of hearing was provided, rendering the proceedings void. She relies on Sections 68E and 68F of the NDPS Act, emphasizing the requirement for a reasoned belief of illegal acquisition and service of orders. The petitioner also argues that the freezing of accounts hinders the company's ability to meet salary, loan EMI, and tax liabilities, including GST. The Supreme Court's decision in Aslam Mohd. Merchant vs Competent Authority & Ors (2008) 14 SCC 186 is cited. Revenue's arguments: The State/respondents justify the action, stating that the petitioner's husband was involved in illegal drug trade and received drug money in the specified bank accounts, which are under financial investigation. They express apprehension that the money might be withdrawn. However, they concede that a formal freezing order under Section 68F of the NDPS Act had not yet been issued by the SHO. The accounts were seized pending investigation to ascertain the source of drug money.