Inspection of Bankers' Books: Section 18

An illicit enrichment case is built from bank records, and Section 18 is the provision that makes them available. It permits a police officer of stated rank, investigating an offence under the Act, to inspect any bankers' books so far as they relate to the accounts of the person suspected, or of any other person suspected on reasonable grounds of holding money on his behalf. The power is administrative rather than judicial: no order of a court is required, which distinguishes it from the ordinary route under the bankers' books legislation.

1. The Power

1. Who may exercise it. A police officer not below the rank prescribed by the section, investigating an offence under the Act with the previous approval where the Act requires it. The seniority requirement mirrors that in Section 17 and exists for the same reason.
2. What may be inspected. Any bankers' books, so far as they relate to the accounts of the persons named, and the officer may take or cause to be taken certified copies of the relevant entries.
3. Whose accounts. Those of the person suspected of having committed the offence, and those of any other person suspected on reasonable grounds of holding money on his behalf. The second limb is the important one, because assets in a corruption case are commonly held in the names of relatives and associates.
4. The effect of a certified copy. A copy so taken is admissible as evidence in the manner the bankers' books legislation provides, so the entries may be proved without producing the original books or calling the bank's officers to prove each entry.
5. Notwithstanding other law. The section operates notwithstanding anything in the bankers' books legislation, which otherwise requires an order of a court before inspection.

2. The Bank's Position

• A duty to permit inspection. The section confers the right of inspection, and a bank that obstructs it exposes its officers to the consequences of obstructing an investigation.
• Confidentiality is displaced. The duty of secrecy a banker owes his customer yields to a statutory power of this kind, and the bank incurs no liability to the customer for complying.
• Certified copies. The practical mechanism is that the bank supplies certified copies of the relevant entries together with the certificate the bankers' books legislation requires, and the officer proves them at trial through the bank's officer.
• Electronic records. Where the entries exist only in electronic form, the certificate required for electronic records must also be obtained, now under the Bharatiya Sakshya Adhiniyam, 2023, and the omission of that certificate is a common defect at trial.

3. Financial Investigation in Practice

1. Identify the check period, since every figure in a disproportionate assets case is referable to it.
2. Obtain the accounts of the public servant, his spouse, children and dependants, and of persons suspected of holding property for him, which is where the second limb of Section 18 operates.
3. Trace the credits. Salary and other lawful income are identified and separated from unexplained credits, cash deposits and transfers from persons with no apparent connection.
4. Trace the acquisitions. Payments for property, vehicles, investments, education and ceremonies are matched to the credits that funded them.
5. Follow the proceeds. Money moved to relatives, to firms, to benami holdings or into cash is the material on which proceedings under the money laundering and benami legislation are built, offences under this Act being scheduled offences for the purposes of the money laundering statute.
6. Preserve the property. Attachment under Section 18A and under the money laundering legislation prevents dissipation while the trial proceeds.

4. Related Topics and Provisions