Kerala High Court

Nishanth M vs Union Of India on 8 November, 2024

Author: V.G.Arun

Bench: V.G.Arun

                                                        2024:KER:85773
WP(C) NO. 29087 OF 2024

                                      1
                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. 29087 OF 2024

PETITIONER:

             NISHANTH M
             AGED 27 YEARS
             S/O VIJAYAKUMARI,
             MUNIYIRUNNA KALAYIL VEEDU,
             KALAYAPURAM, CHITHARA,
             KOLLAM, PIN - 691541


             BY ADVS.
             SAYUJYA
             K.R.RAJEEV KRISHNAN




RESPONDENTS:

     1       UNION OF INDIA
             MINISTRY OF HOME AFFAIRS NORTH BLOCK,
             NEW DELHI, REPRESENTED BY ITS HOME SECRETARY,
             PIN - 110001

     2       NATIONAL CYBER CRIME REPORTING PORTAL
             NATIONAL HIGHWAY - 8 MAHIPALPUR,
             NEW DELHI, REPRESENTED BY ITS NODAL OFFICER,
             PIN - 110037

     3       DIRECTOR GENERAL OF POLICE
             POLICE HEADQUARTES, OLD COUNCIL HALL,
             SHAEED BHAGAT SINGH MARG, CITY-MUMBAI,
             MAHARASHTRA, PIN - 400001
                                                             2024:KER:85773
WP(C) NO. 29087 OF 2024

                                     2
     4       ICICI BANK
             ADONAI TOWERS, SAHODARAN AYYAPPAN ROAD, KADAVANTHRA,
             ERNAKULAM , REPRESENTED BY ITS BRANCH MANAGER, PIN -
             682016


             BY T.C. KRISHNA, DSGI IN CHARGE


      THIS   WRIT   PETITION   (CIVIL)   HAVING   BEEN   FINALLY   HEARD   ON
08.11.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
                                                              2024:KER:85773
WP(C) NO. 29087 OF 2024

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                               JUDGMENT

Dated this the 08th 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 disposal of his 2024:KER:85773 WP(C) NO. 29087 OF 2024

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, 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 2024:KER:85773 WP(C) NO. 29087 OF 2024

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 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 2024:KER:85773 WP(C) NO. 29087 OF 2024

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

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 2024:KER:85773 WP(C) NO. 29087 OF 2024

"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 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 2024:KER:85773 WP(C) NO. 29087 OF 2024

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 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 2024:KER:85773 WP(C) NO. 29087 OF 2024

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

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 2024:KER:85773 WP(C) NO. 29087 OF 2024

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

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 2024:KER:85773 WP(C) NO. 29087 OF 2024

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

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