HON'BLE SMT. JUSTICE G. ANUPAMA CHAKRAVARTHY
Crl.R.C.No.857 OF 2022
ORDER :
This Criminal Revision Case is filed against the order dated 05.11.2022 in Crl.M.P.No.2318 of 2022 in Cr.No.100 of 2022, on the file of I Additional Junior Civil Judge-Cum-IX Additional Metropolitan Magistrate, Ranga Reddy District at Kukatpally.
2. For the sake of convenience, the parties herein are referred to as they are arrayed before the trial Court.
3. The petitioner filed Crl.M.P.No.2318 of 2022 before the trial Court under Sections 451 & 457 Cr.P.C praying the Court to defreeze the account bearing No.002281300003993 of 'YES' bank for the purpose of operation of account.
4. The contents of the petition in nutshell is that basing on the report filed by one Smt.Vijaya Lakshmi, Police, Cyber Crimes registered a case in Crime No.100 of 2022 under Section 420 of IPC and Section 66-D Information Technology 2 GAC, J Crl.R.C.No.857 of 2022 Act. During the course of investigation, the Police have freezed the account bearing No.002281300003993 of 'YES' bank of the petitioner, who is no way concerned with the crime of the accused. It is the contention of the petitioner that he has been doing business as "online payment gateway" which approves the transaction process between merchant and customer, and as such, the petitioner had no nexus with the accused and furthermore, the petitioner had not received any amount neither from the accused nor from the defacto complainant. Therefore, operation of account of the petitioner which was freezed by the Police is illegal and prayed to allow the petition.
5. Though the prosecution received notice before the trial Court, it did not file any counter. The trial Court after hearing the rival contentions of the learned counsel for the petitioner and the learned Assistant Public Prosecutor dismissed the petition with a specific finding that the petitioner has not filed any document to substantiate that it has been doing business as a gateway for payment to the customers at the instance of 3 GAC, J Crl.R.C.No.857 of 2022 merchant and as the investigation is in progress, it was not inclined to pass any orders, in favour of the petitioner.
6. Being aggrieved by the orders of the trial Court, the present revision is preferred. It is the contention of the revision petitioner that though the documents were filed before the trial Court, the said Court has not seen or verified the said documents and erroneously dismissed the petition mechanically.
7. Heard the learned counsel for the revision petitioner and the learned Assistant Public Prosecutor for respondent. Perused the record.
8. In order to support his contention, learned counsel for the petitioner has relied on documents which were filed along with petition. On perusal of the documents, it is evident that the petitioner's organization is dealing with the process of payment through "Online Gateway" which approves the transaction between the merchant and the customer and the petitioner company plays its role only in the "online transaction process". 4
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9. Admittedly, no complaint was made against the petitioner. The contents of the complaint disclose that one Vijaya Lakshmi Meriga is the complainant and the accused is the management of www.kings567 website. The recitals of FIR disclose that complainant stated that "her younger son by name Rohit Kumar moved to India from USA in September, 2019 and later started working for a software company in Hyderabad. In February, 2021 he received an anonymous call asking him, if he was interested in playing casino games, for which he responded positively. A URL of portal:www.kings567.com was shared to him and he created an account. In the beginning, he never won money and by the end of June, 2021, he was at a loss of Rs.8 lakhs. Thereafter, he started playing with higher stakes and by the end of August, 2021, he was at a loss of Rs.45 lakhs. On September, 2021, he won Rs.8 lakhs and withdrew the cash to his bank account and started depositing and withdrawing the money frequently. By the end of November, 2021, different account numbers were used for withdrawal and deposit of money and a total amount of Rs.14 lakhs was withdrawn. The 5 GAC, J Crl.R.C.No.857 of 2022 names of the accounts to which he credited funds as reflected on the webpages i.e., Unique Traders, King Trading, King 567 Casino, Fonepaisa.com, MR.Enterprise and when checked his bank statements, it was down to loss by Rs.70 lakhs. They put his account on hold for a week and then release it. But this time, when he tried to withdraw, they only approved Rs.2 lakhs for withdrawal and for remaining balance, he was asked to play more." Therefore, he preferred the present complaint.
10. On perusal of the record, it is noticed that at Column No.4 of the bank accounts and intermediaries, the complainant has shown the petitioner's name in the complaint for which the Police have freezed the account of the petitioner. On 13.09.2022, the petitioner has addressed a letter to Rohit Kumar Meriga who is the son of the complainant wherein, it is mentioned that the entire amount has been released and paid to the son of the complainant towards full and final settlement.
11. It is needless to say that the petitioner company is a payment gateway service provider by the banks directly or a 6 GAC, J Crl.R.C.No.857 of 2022 payment service provider authorized by a bank and the petitioner organization is not hosting any kind of online card games nor inviting any customer for playing online card games and they only deal with the transaction process and authorizes transactions between merchants and customers. Moreover, it has no nexus with the offences as alleged by the complainant as the petitioner organization is a mediation between the customer and the merchant such as net banking, credit card, debit card, UPI or many online wallets that are available these days.
12. Learned counsel for the petitioner relied on the judgment of this Court in Crl.R.C.No.2301 of 2018, wherein this Court has directed to defreeze two bank accounts for the persons holding accounts in Kotak Mahindra Bank, Banjara Hills, Hyderabad.
13. It is the specific contention of the learned counsel for the petitioner that though the accounts of the petitioner are freezed, the said fact was not informed to the Magistrate. 7
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14. In support of his contentions, learned counsel for the petitioner relied on the judgment of this Court reported in Meridian Educational Society, Hyderabad v. State of Telangana and others1 wherein it is held as under:-
"It is clear from the facts that the concerned Magistrate was not informed at all. As held in AP Products (supra) the Magistrate has to be informed within reasonable time without any undue delay. The impugned notice was addressed on 11.08.2021, however, till date the Magistrate has not been informed about the freezing of the bank Account in question. Therefore, the freezing of bank Accounts in the instant case is liable to set aside on this ground alone."
15. Learned counsel for the petitioner relied on judgment of the Karnataka High Court reported in Smt.Lathifa Abubakkar v. The State of Karnataka and Ors2 wherein their lordship has held as follows:-
"In the present case, the fourth respondent has not produced any materials till this day to show that the bank account has any nexus with the 1 2021 (6) ALD 474 (TS) 2 2012 CRI.L.J 3487 8 GAC, J Crl.R.C.No.857 of 2022 commission of the alleged offence. It is evident that respondents have not issued a notice of seizure to the petitioner to enable her to executing bond undertaking to produce the amount in the Court as and when required. Admittedly, the third respondent has not reported the seizure of the bank account to the Magistrate having jurisdiction. Thus, it is clear that respondents have not complied with the mandate contained in Section 102 of Cr.P.C. therefore, the direction of the fourth respondent in freezing the bank account of the petitioner is illegal."
16. He also relied on the judgment of Madras High Court reported in Guruprasath, S/o V.S.Rathinam vs. State, represented by Inspector of Police3 wherein their lordships held as follows:-
"The Supreme Court, in the following judgments have indicated that while freezing account, pursuant to any pending investigation, such freezing shall be of very short duration and the period should also be specific and pending investigation, Bank accounts cannot be freezed 3 2017 Lawsuit (Mad) 2079 9 GAC, J Crl.R.C.No.857 of 2022 indefinitely. In this case, the petitioner is not even arrayed as an accused, but his business accounts are being freezed without any intimation and in violation of statute and contrary to the dictum laid in the judgments of the Supreme Court. Under Section 18 of the Prevention of Corruption Act, conditions are imposed to the investigating agent regarding the manner in which the inspection should be conducted regarding bank accounts. Without the authorization of the Superintendent of Police, accounts of a person shall not be inspected by any Police Officer below the rank of Superintendent of Police. The freezing of accounts in this case has been done in violation of Section 18 of the Prevention of Corruption Act."
17. In the present case, the learned Magistrate was not informed about the freezing of the accounts. Further, the petitioner was not arrayed as accused and no FIR was registered against the petitioner so as to freeze his accounts and there is no nexus between the petitioner and the accused.
18. Therefore, the above said citations squarely apply to the facts and circumstances of the case. The record also reveals that 10 GAC, J Crl.R.C.No.857 of 2022 there is no intimation to the Magistrate about freezing of the account. As the investigating is still pending, the trial Court has dismissed the application without considering the documents relied on by the petitioner herein.
19. It is pertinent to note that the trial Court has no authorization on record to prove that the bank accounts of the petitioner has no nexus with the commission of alleged offences. Even as per the propositions laid down by the Apex Court and other courts, there is no notice issued to the petitioner before freezing the bank accounts and no specific time limit was also fixed. The record also reveals that the son of the complainant has already received amount from the petitioner company. Thus, this Court is of the opinion that it is a fit case to interfere with orders of the trial Court and defreeze the bank accounts of the petitioner.
20. Having regard to the facts and circumstances of the case, this Criminal Revision Case is allowed and the order dated 05.11.2022 in Crl.M.P.No.2318 of 2022 in Crime No.100 of 11 GAC, J Crl.R.C.No.857 of 2022 2022, on the file of I Additional Junior Civil Judge-Cum-IX Additional Metropolitan Magistrate, Ranga Reddy District at Kukatpally is hereby set aside and directed to defreeze the bank account of the petitioner i.e., "Fonepaisa Pvt Limited. A/c.No.002281300003993, Yes Bank, Kasturba Road, Bangalore" subject to the revision petitioner furnishing bond equal to the amount in the credit of his accounts as on the date of freezing.
Pending miscellaneous applications, if any, shall stand closed.
________________________________ G.ANUPAMA CHAKRAVARTHY, J Date: 08.02.2023 dv