Kerala High Court
Mohamed Musthafa P.P vs Federal Bank on 8 November, 2024
Author: V.G.Arun
Bench: V.G.Arun
2024:KER:85884
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
FRIDAY, THE 8TH DAY OF NOVEMBER 2024 / 17TH KARTHIKA, 1946
WP(C) NO. 28520 OF 2024
PETITIONER:
MOHAMED MUSTHAFA P.P
AGED 37 YEARS, S/O MOIDEENKUTTY PP,
PARAPPURATHETHIL HOUSE, THOZUVANUR P.O.,
MALAPUARAM, KERALA, PIN - 676552
BY ADVS.
FAHAD HUSSAIN
MUHAMMED AMEEN
RESPONDENTS:
1 FEDERAL BANK
REPRESENTED BY THE GENERAL MANAGER,
HEAD OFFICE, MARKET ROAD, PERIYAR NAGAR,
ALUVA, PIN - 683101
2 BRANCH MANAGER
FEDERAL BANK, VALANCHERY BRANCH,
KONNAKKATIL TOWERS, KOZHIKODE ROAD,
VALANCHERY, MALAPPURAM DISTRICT,
PIN - 676552
3 NATIONAL CYBER CRIME REPORTING PORTAL (MHA PORTAL),
32ND FLOOR, WORLD TRADE CENTRE-I, CUFF PARADE,
MUMBAI, MAHARASHTRA, INDIA, PIN - 400005
4 POLICE INSPECTOR
CYBER CRIME POLICE STATION,
CHHATRAPATI SHIVAJI MAHARAJ MARG, COLABA,
MUMBAI, MAHARASHTRA, PIN - 400001
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5 STATE OF KERALA
REPRESENTED BY PRINCIPAL SECRETARY, HOME DEPARTMENT,
GOVERNMENT SECRETARIAT, THIRUVANATHAPURAM POST,
THIRUVANANTHAPURAM DISTRICT, PIN - 695001
SRI. AJITH VISWANATHAN, GP.
DSGI IN CHARGE, T.C. KRISHNA.
SRI. MOHAN JACOB GEORGE, SC FOR FEDERAL BANK.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
08.11.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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JUDGMENT
Dated this the 8th day of November, 2024
The petitioner is aggrieved by the sudden
freezing of his account by the bank based on
requisitions/intimation received from the police. The
police in turn has acted on the basis of Cyber Crime
Incident Reports filed by persons subjected to online
financial fraud/UPI fraud.
2. Learned counsel for the petitioner
submitted that this Court in Dr.Sajeer v. Reserve
Bank of India [2024 (1) KLT 826] has addressed the
plight of similarly situated persons, and after elaborately
dealing with the revolutionary change in money
transactions with the advent of Unified Payment
Interface (UPI for short), as also the positives and
negatives of UPI transactions in the context of Cyber
crimes and Online fraud, the writ petitions were disposed
of with certain directions. The petitioner is also seeking
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disposal of his case in similar manner.
3. Heard.
4. For convenience, the directions in
Dr.Sajeer's case (supra) is extracted hereunder:-
" a. The respondent Banks arrayed in these cases, are
directed to confine the order of freeze against the
accounts of the respective petitioners, only to the extent
of the amounts mentioned in the order/requisition
issued to them by the Police Authorities. This shall be
done forthwith, so as to enable the petitioners to deal
with their accounts, and transact therein, beyond that
limit.
b. The respondent - Police Authorities concerned are
hereby directed to inform the respective Banks as to
whether freezing of accounts of the petitioners in these
Writ Petitions will require to be continued even in the
afore manner; and if so, for what further time, within a
period of eight months from the date of receipt of a
copy of this judgment.
c. On the Banks receiving the afore
information/intimation from the Police Authorities, they
will adhere with it and complete necessary action -
either continuing the freeze for such period as
mentioned therein; or withdrawing it, as the case may
be.
d. If, however, no information or intimation is
received by their Banks in terms of directions (b) above,
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the petitioners or such among them, will be at full
liberty to approach this Court again; for which purpose,
all their contentions in these Writ Petitions are left open
and reserved to them, to impel in future."
5. While I am in respectful agreement with
the above directions, I also consider it apposite to
scrutinise the issue in the context of the applicable
provision and the precedents on the point. The
intimation from the police, in most of the cases, refers to
Section 102 of Cr.P.C., which, no doubt, is the applicable
provision. Hence, Section 102 is extracted hereunder for
easy reference. Here, it is essential to note that Section
106 of the Bharatiya Nagarik Suraksha Sanhita, 2023,
which is the corresponding provision, is also identically
worded.
"Section 102:- Power of police officer to seize
certain property- (1) Any police officer may seize any
property which may be alleged or suspected to have
been stolen, or which may be found under
circumstances which create suspicion of the commission
of any offence.
(2) Such police officer, if subordinate to the officer
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in charge of a police station, shall forthwith report the
seizure to that officer.
(3) Every police officer acting under Sub-Section (1)
shall forthwith report the seizure to the Magistrate
having jurisdiction and where the property seized is
such that it cannot be, conveniently transported to the
Court or where there is difficulty in securing proper
accommodation for the custody of such property, or
where the continued retention of the property in police
custody may not be considered necessary for the
purpose of investigation, he may give custody thereof to
any person on his executing a bond undertaking to
produce the property before the Court as and when
required and to give effect to the further orders of the
Court as to the disposal of the same.
Provided that where the property seized under Sub-
Section (1) is subject to speedy and natural decay and if
the person entitled to the possession of such property is
unknown or absent and the value of such property is
less than five hundred rupees, it may forthwith be sold
by auction under the orders of the Superintendent of
Police and the provisions of sections 457 and 458 shall,
as nearly as may be practicable, apply to the net
proceeds of such sale."
6. A reading of Section 102, makes it clear
that the police has the power to seize any property which
may be alleged or suspected to have been stolen, or
which may be found under circumstances which create
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suspicion of the commission of any offence. The Apex
Court in State of Maharashtra v. Tapas D Neogy
[(1999) 7 SCC 685] has held that the bank account of
the accused or any of his relatives can be treated as
"property" for the purpose of Section 102 of the Code.
Later, in Teesta Atul Setalvad v. State of Gujarat
[(2018) (2) SCC 372], the Supreme Court also held that
the Investigating Officer can issue instruction to seize the
suspected bank accounts, subject to his submitting a
report to the Magistrate concerned, as mandated in sub-
section (3) of Section 102. Thereafter, another issue
arose with respect to cases in which there was delay in
reporting the seizure to the Magistrate. This led to
divergent views being expressed by different High
Courts. Some High Courts held that delayed reporting to
the Magistrate would, ipso facto, vitiate the seizure
order; certain other High Courts held that the delay in
reporting would constitute a mere irregularity and would
not vitiate the seizure order. The issue was set at rest
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by the Supreme Court in Shento Varghese v. Julfikar
Husen and others [2024 SCC OnLine SC 895]. For that
purpose, a comparative analysis of the legislative history
of Section 102 Cr.PC was undertaken. After elaborate
discussion, the Apex Court held in Shento Varghese's
case (supra) as under:-
"22.From the discussion made above, it would emerge
that the expression 'forthwith' means 'as soon as may
be', 'with reasonable speed and expedition', 'with a
sense of urgency', and 'without any unnecessary delay'.
In other words, it would mean as soon as possible,
judged in the context of the object sought to be achieved
or accomplished.
23. We are of the considered view that the said
expression must receive a reasonable construction and
in giving such construction, regard must be had to the
nature of the act or thing to be performed and the
prevailing circumstances of the case. When it is not the
mandate of the law that the act should be done within a
fixed time, it would mean that the act must be done
within a reasonable time. It all depends upon the
circumstances that may unfold in a given case and there
cannot be a straight-jacket formula prescribed in this
regard. In that sense, the interpretation of the word
'forthwith' would depend upon the terrain in which it
travels and would take its colour depending upon the
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prevailing circumstances which can be variable.
24. Therefore, in deciding whether the police officer has
properly discharged his obligation under Section 102(3)
Cr. P.C., the Magistrate would have to, firstly, examine
whether the seizure was reported forthwith. In doing so,
it ought to have regard to the interpretation of the
expression, 'forthwith' as discussed above. If it finds that
the report was not sent forthwith, then it must examine
whether there is any explanation offered in support of
the delay. If the Magistrate finds that the delay has been
properly explained, it would leave the matter at that.
However, if it finds that there is no reasonable
explanation for the delay or that the official has acted
with deliberate disregard/wanton negligence, then it may
direct for appropriate departmental action to be initiated
against such erring official. We once again reiterate that
the act of seizure would not get vitiated by virtue of such
delay, as discussed in detail herein above."
7. Thus it is no longer open for any person
to contend that the delay in complying with Section 102
Cr.P.C would vitiate the seizure as such. This gives rise
to an ancillary question, as to the impact of non-
compliance of Section 102(3), by the failure on the part
of the police officer concerned to report the seizure of
bank account to the jurisdictional Magistrate. In my
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opinion, this question has to be addressed in the light of
Article 300A of the Constitution of India, which stipulates
that no person shall be deprived of his property except
by authority of law. The authority of law in the cases
under consideration is conferred by Section 102 Cr.P.C.
Therefore, abject violation of the procedure prescribed
therein will definitely affect the validity of the seizure.
While on the subject, it will be profitable to refer the well
considered judgment rendered by a learned single Judge
of this Court in Madhu K v. Sub Inspector of Police
and others [2020 (5) KLT 483]. Therein, the practice of
certain police officers of directing freezing of accounts
without reporting to the Magistrate concerned was
deprecated. As rightly observed in the judgment, the
police officer acting under Section 102 Cr.P.C cannot be
permitted to arrogate to himself an unregulated and
unbridled power to freeze the bank account of a person
on mere surmise and conjuncture, since such unguarded
power may bring about drastic consequences affecting
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the right to privacy as well as reputation of the account
holder. The other relevant portion of that judgment reads
as under:-
"If it finds that the report was not sent forthwith, then it
must examine whether there is any explanation offered in
support of the delay. If the Magistrate finds that the delay
has been properly explained, it would leave the matter at
that. However, if it finds that there is no reasonable
explanation for the delay or that the official has acted with
deliberate disregard/wanton negligence, then it may direct
for appropriate departmental action to be initiated against
such erring official. We once again reiterate that the act of
seizure would not get vitiated by virtue of such delay, as
discussed in detail herein above."
The learned single Judge finally held that the breach of
procedure can be considered as irregular and not illegal.
8. The above discussion leads to the
conclusion that, while delay in forthwith reporting the
seizure to the Magistrate may only be an irregularity,
total failure to report the seizure will definitely have a
negative impact on the validity of the seizure. In such
circumstances, account holders like the petitioner, most
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of whom are not even made accused in the crimes
registered, cannot be made to wait indefinitely hoping
that the police may act in tune with Section 102 and
report the seizure as mandated under Sub-section (3) at
some point of time. In that view of the matter, the
following direction is issued, in addition to the directions
in Dr.Sajeer (supra).
(i) The police officer concerned shall inform the
banks whether the seizure of the bank account has been
reported to the jurisdictional Magistrate and if not, the
time limit within which the seizure will be reported. If no
intimation as to the compliance or the proposal to comply
with the Section 102 is received by the bank within one
month of receipt of a copy of this judgment, the bank
shall lift the debit freeze or remove the lien, as the case
may be, from the petitioner's account.
(ii) In order to enable the police to comply with
the above direction the bank, as well as the petitioner,
shall forthwith serve a copy of this judgment to the
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officer concerned and retain proof of such service.
Ordered accordingly.
Sd/-
V.G.ARUN
JUDGE
ARK
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APPENDIX OF WP(C) 28520/2024
PETITIONER EXHIBITS
EXHIBIT P1 THE TRUE COPY OF THE PASSBOOK DATED
10/06/2019
EXHIBIT P2 A TRUE COPY OF NOTICE DATED 17/07/2024
FORWARDED BY THE BRANCH MANAGER, FEDERAK
BANK, VALANCHERY BRANCH TO THE PETITIONER
EXHIBIT P3 A TRUE COPY OF THE LETTER BY E-MAIL DATED
31/07/2024 SUBMITTED BY THE PETITIONER TO THE
2ND RESPONDENT BANK
EXHIBIT P4 A TRUE COPY OF THE JUDGMENT OF THE HON'BLE
HIGH COURT OF KERALA REPORTED AS 2024 (1) KLT
826 (DR.SAJEER -VS- RESERVE BANK OF INDIA)
