M/S. JERMYN CAPITAL LLC DUBAI versus CENTRAL BUREAU OF INVESTIGATION & ORS.

Citation: [2023] 6 S.C.R. 565 · Decided: 09-05-2023 · Supreme Court of India · Bench: KRISHNA MURARI · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
565
M/S. JERMYN CAPITAL LLC DUBAI
v.
CENTRAL BUREAU OF INVESTIGATION & ORS.
(Criminal Appeal No. 1434 of 2023)
MAY 09, 2023
[KRISHNA MURARI AND SANJAY KUMAR, JJ.]
Code of Criminal Procedure, 1973 – s.102 – Freeze orders
and bank guarantee in furtherance there of were imposed against
the appellant company on grounds of necessity of investigation of
an alleged crime initiated against one ‘D’ allegedly connected to
the appellant company – Held: Accused-‘D’ was never an employee/
share holder/director or a key managerial person in the appellant
company – Since ‘D’ was in no way connected to the appellant
company, the trial faced by him, was in his individual capacity, and
not vicariously on behalf of the appellant company – No criminal
proceedings whatsoever are pending against the appellant company
pertaining to the dispute at hand – Furthermore, ‘D’ has been
discharged of the alleged offences by the Trial Court – Even
assuming that his discharge is subsequently reversed, and he is
convicted, such a conviction would still have no bearing on the
properties of the appellant company, since it is not alleged to be a
part of the crime – The purpose of the freeze order and the bank
guarantee in extension of the freeze order, can only be in operation
to aid in the investigation against the alleged crime – Since the
appellant company is in no way connected to the alleged crime, the
freeze order against its properties is redundant qua the investigation
– As the investigation against the appellant company is redundant,
hence, the freeze of the appellant company’s assets and the bank
guarantee imposed in furtherance thereof also becomes redundant
– Therefore, the condition imposed upon the appellant to furnish a
bank guarantee by the Courts below is not sustainable and is set
aside – Orders impugned modified – Appellant permitted to withdraw
the amount along with 4% simple interest.
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No.1434 of 2023.
From the Judgment and Order dated 16.08.2018 of the High Court
of Gujarat at Ahmedabad in CRLMA No.602 of 2013.
   [2023] 6 S.C.R. 565
565
A
B
C
D
E
F
G
H
566
SUPREME COURT REPORTS
[2023] 6 S.C.R.
Mukul Rohatgi, Sr. Adv., Sunil Fernandes, Ms. Nupur Kumar,
Divyansh Tiwari, M. Thangathurai, Ms. Priyansha Sharma, Ms. Diksha
Dadu, Advs. for the Appellant.
Shailesh Madiyal, Rajesh Ranjan, Mukul Singh, Pratyush
Shrivastava, Arvind Kumar Sharma, Rajat Nair, Ms. Swati Ghildiyal,
Ms. Devyani Bhat, M/s K J John and Co., Advs. for the Respondents.
The Judgment of the Court was delivered by
KRISHNA MURARI, J.
Leave Granted.
2. The present Appeal is directed against the judgment and final
order dated 16.08.2018 passed by the High Court of Gujarat at
Ahmedabad, (hereinafter referred to as “High Court”) in Criminal
Application No. 602 of 2013.
FACTS
3. The brief facts relevant for the purpose of the present appeal
are that the appellant company is a Foreign Institutional Investor and
was permitted by Securities and Exchange Board of India (for short
‘SEBI’) to buy and sell shares and securities in the Indian Stock Market.
However, due to certain litigations, the appellant company had quit trading
in the Indian markets in 2006. It is important to note that at this point, the
appellant company had shares and money in its bank account with ICICI
bank.
4. Subsequently, the appellant company was subject to two freeze
orders under Section 102 of the Code of Criminal Procedure, 1973. The
first freeze order was imposed against the appellant company on
20.10.2006, and the second freeze order was imposed on 17.08.2010.
These abovementioned freeze orders, as has been discussed in detail
below, were levied against the appellant company on grounds of necessity
of investigation of an alleged crime. At this point, It must be noted that
the said investigation of the alleged crime was initiated against one
Dharmesh Doshi, who is in no way related to the appellant company,
and he was never an employee/share holder/director or a key managerial
person in the appellant company.
5. In so far as the first freeze order is concerned, vide orders
dated 05.12.2008,14.05.2009,16.11.2009 and 17.08.2010, this Court
A
B
C
D
E
F
G
H
567
allowed the appellant company to sell the shares in its account, convert
it into cash, and repatriate the funds so received with interest and without
a bank guarantee, while the first freeze order was still operational. In
terms of the abovementioned orders, the appellant company repa

Excerpt shown. Read the full judgment & AI analysis in Lexace.