M/S. Fone Paisa Payment Solutions ... vs The State Of Telangana
2023 Latest Caselaw 633 Tel

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

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

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".

GAC, J Crl.R.C.No.857 of 2022

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

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

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.

GAC, J Crl.R.C.No.857 of 2022

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

2021 (6) ALD 474 (TS)

2012 CRI.L.J 3487

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

2017 Lawsuit (Mad) 2079

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

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

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