Kerala High Court

Favas Mon M vs Union Of India on 30 September, 2024

Author: V.G.Arun

Bench: V.G.Arun

                                                       2024:KER:73052

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

                  THE HONOURABLE MR.JUSTICE V.G.ARUN

     MONDAY, THE 30TH DAY OF SEPTEMBER 2024 / 8TH ASWINA, 1946

                       WP(C) NO. 28557 OF 2024

PETITIONER:

          FAVAS MON M.
          AGED 26 YEARS
          S/O MAJEED M, MANGODAN (H), NEELANCHERI P.O, KALIKAVU,
          MALAPPURAM., PIN - 676525


          BY ADVS.
          SIDHARTH O.
          SUSANTH SHAJI
          ALBIN A. JOSEPH




RESPONDENTS:

    1     UNION OF INDIA
          REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE,
          NORTH BLOCK, NEW DELHI., PIN - 110001

    2     RESERVE BANK OF INDIA
          REPRESENTED BY ITS, GENERAL MANAGER BRANCH OFFICE
          BANERJI ROAD ERNAKULAM NORTH, KOCHI., PIN - 691310

    3     HDFC BANK LIMITED
          HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL
          (WEST), MUMBAI. REPRESENTED BY ITS MANAGING DIRECTOR,
          PIN - 400013

    4     BRANCH MANAGER, HDFC BANK LIMITED, MANJERI BRANCH,
          1ST FLOOR, THARIF BUILDING, CALICUT RD, KARUVAMBRAM,
          MANJERI, KERALA, PIN - 676121
                                                     2024:KER:73052


WP(C)No.28557 of 2024

                                  2


      5       STATION HOUSE OFFICER, NAVI MUMBAI POLICE STATION
              ROADPALI, NAVI MUMBAI, MAHARASHTRA, PIN - 410218

      6       STATE POLICE CHIEF, TELANGANA STATE POLICE
              TELANGANA STATE POLICE HEADQUARTERS, SAIFABAD,
              HYDERABAD, TELANGANA, PIN - 500004




              DSGI IN CHARGE T.C. KRISHNA.
              SRI. M. PREMCHAND FOR HDFC BANK.


      THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
30.09.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
                                                                 2024:KER:73052


WP(C)No.28557 of 2024

                                        3




                               JUDGMENT

Dated this the 30TH day of September, 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 2024:KER:73052

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, learned Counsel for the petitioner,

learned Central Government Counsel and the Standing

Counsel for the bank.

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 2024:KER:73052

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 from the police, in most of the cases, refers 2024:KER:73052

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 2024:KER:73052

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 2024:KER:73052

[(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 2024:KER:73052

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 2024:KER:73052

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 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 2024:KER:73052

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 2024:KER:73052

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 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 2024:KER:73052

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 2024:KER:73052

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

bank 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 informed to the bank

within one month of receipt of a copy of this judgment,

the bank shall lift the debit freeze imposed on the

petitioner's account.

2024:KER:73052

(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 SSK/30/09 2024:KER:73052

APPENDIX OF WP(C) 28557/2024

PETITIONER EXHIBITS

Exhibit P1 TRUE PHOTOSTAT COPY OF THE EMAIL DATED 21.06.2024 ISSUED BY THE 4TH RESPONDENT.