A special court for Narcotic Drugs and Psychotropic Substances (NDPS) in Mumbai on Saturday ordered the defreezing of several bank accounts belonging to actor Rhea Chakraborty, her brother Showik, and mother Sandhya. The court ruled that the Narcotics Control Bureau (NCB) failed to comply with mandatory procedural safeguards under the NDPS Act.
Court's Ruling on Procedural Compliance
Special Judge U C Deshmukh, while delivering the orders, stated: "Sub-section (2) of Section 68F of the (NDPS) Act provides that an order of freezing or seizing the property shall have no effect unless such order is confirmed by an order of the competent authority within a period of 30 days of its being made. There is no dispute that the subject matter of the bank account has been frozen by the officer of the respondent. The respondent does not deny that there is no compliance of sub-section (2) of Section 68F of the Act. There is no order as contemplated to be passed under such provisions of the Act."
Background of the Case
The siblings are booked in a drugs case that was probed following the death of actor Sushant Singh Rajput in 2020. The section under which the accounts were frozen deals with the seizure or freezing of illegally acquired property derived from illicit drug trafficking. The judge said that the holders of the bank accounts are permitted to operate them as per RBI rules and regulations.
Details of the Pleas
In four separate orders, the judge addressed multiple pleas moved by advocates Ayaz Khan and Zehra Charania involving personal savings accounts and a corporate account linked to a private company. The Chakrabortys moved the court contending that their accounts, including joint holdings at ICICI Bank, a savings account at Axis Bank, and a current account at Kotak Mahindra Bank, were frozen following their arrests in September 2020. The pleas argued that under the NDPS Act, any seizure of property is subject to specific statutory timelines. The pleas stated that "the prosecution has not followed the procedure and law mandated" and that no order of confirmation was ever served upon them as required by the statute.
Specific Plea Regarding Vividrage Rhealityx Pvt Ltd
In one specific plea concerning a current account held by Vividrage Rhealityx Pvt Ltd, Showik and Rhea informed the court that they had decided to shut down the company and sought to remove its name from the Register of Companies. They stated that the bank was "not entertaining any application" to close the account because of the freeze directed by the NCB. They noted that there had been no transactions in the account since its initial deposit in 2019, arguing there was "no requirement for freezing the account."
Prosecution's Opposition and Court's Finding
While the prosecution opposed the pleas by labelling Rhea an "active member of a drug syndicate connected with drug peddlers", the judge found the lack of procedural compliance to be a fatal flaw. Relying on Bombay High Court precedent, the judge emphasised that the power to freeze assets cannot be "unregulated or uncanalized". Quoting the High Court, the judge noted: "Sub-Section (2) of Section 68F envisages further control over the exercise of such power, by vesting in competent authority the power to confirm such order and upon non-confirmation thereof, within a period of 30 days, render such order nugatory."
