Kerala High Court
Muhammed Sinan V.P vs Induslnd Bank on 21 November, 2024
Author: V.G.Arun
Bench: V.G.Arun
2024:KER:87885
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
THURSDAY, THE 21ST DAY OF NOVEMBER 2024 / 30TH KARTHIKA, 1946
WP(C) NO. 35932 OF 2024
PETITIONER/S:
MUHAMMED SINAN V.P,
AGED 18 YEARS
S/O ABBAS, VELUTHAPARAMBATH HOUSE, CHANGOROTH,
KOZHIKODE, KERALA, PIN - 673525.
BY ADVS.
LATHEEF P.K.
SIDDIQUE C.
FAHAD HUSSAIN
RESPONDENT/S:
1 INDUSLND BANK
REPRESENTED BY THE GENERAL MANAGER, HEAD OFFICE,
M.G ROAD, ERNAKULAM, PIN - 682035.
2 BRANCH MNGER
INDUSLND BANK, KOCHI BRANCH, GOWRINARAYANAN, OPP TO
JAYALAKSHMI SILKS,M.G ROAD, ERNAKULAM DISTRICT,
PIN - 682035.
3 THE NATIONAL CYBER REPORTING CRIME PORTAL
REP. BY ITS SECRETARY, MINISTRY OF HOME AFFAIRS,
NEW DELHI, PIN - 110001.
4 STATE POLICE CHIEF, KERALA
POLICE HEAD QUARTERS, VAZHUTHAKKAD, THIRUVANANTHAPURAM,
PIN - 695014.
SRI. AJITH VISWANATHAN, GP
SRI.T.C KRISHNA, DSGI IN CHARGE
SRI.G.HARIHARAN
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WP(C) NO. 35932 OF 2024 2
THIS WRIT PETITION (CIVIL) HAVING BEEN HEARD FINALLY ON
21.11.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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WP(C) NO. 35932 OF 2024 3
JUDGMENT
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 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
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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
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
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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
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-
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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 "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
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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 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
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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
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
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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 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
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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 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
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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 officer
concerned and retain proof of such service.
Ordered accordingly.
Sd/-
V.G.ARUN
JUDGE
Sru
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APPENDIX OF WP(C) 35932/2024
PETITIONER'S EXHIBITS
Exhibit P1 THE TRUE COPY OF THE BANK ACCOUNT STATEMENT
ISSUED DATED 28-08-2024
Exhibit P2 A TRUE COPY OF THE REPRESENTATION FILED BY
THE PETITIONER BEFORE THE 2ND RESPONDENT BANK
DATED 31-08-2024 ALONG WITH TRACK CONSIGNMENT
Exhibit P3 A TRUE COPY OF THE EMAIL COMMUNICATION ISSUED
BY THE HEAD SERVICE DEPARTMENT OF THE 2ND
RESPONDENT BANK DATED 25-09-2024
RESPONDENTS EXHIBITS
Exhibit R1(a) A true copy of the field verification report
viz. M/s. JRSCA Consulting and Advisory
Private Ltd. on 17.10.2024 addressed to the
1st respondent Bank
Exhibit R1(b) A true copy of the statement of account
maintained by the petitioner with the 2nd
respondent Bank from 23.07.2024 to 05.11.2024
Exhibit R1(c) A true copy of the communication dated
18.08.2024 sent through email by the 2nd
respondent
Exhibit R1(d) A true copy of the communication dated
18.08.2024 sent through email by the 2nd
respondent
