Point of Law : Court is coming across scores and scores of cases where account is frozen, defrozen and amount that complainant is due from a suspect or an accused is transferred to account of complainant from the account of third parties which action is contrary to all cannons of law. [Para 18]

ORDER :

The petitioners are before this Court calling in question order dated 23-12-2021 passed by the I Additional Chief Metropolitan Magistrate, Bengaluru in Crime No.256 of 2021 whereby the amount from the personal account of the 1st petitioner is transferred to the account of the 2nd respondent.

2. Brief facts that lead the petitioners to this Court, as borne out from the pleadings, are as follows:-

The 1st petitioner is the whole time Director of “PhonePe Private Limited”/2nd petitioner. The 2nd petitioner is a pioneer in digital payments and financial services and is also engaged in the business of providing digital payment platform services enabling end users and customers to make payment and merchant/business entities to accept payment by card which is popularly known as “Unified Payment Interface” (‘UPI’). The 2nd petitioner is the Company and as observed hereinabove claimed to be a leading player in the digital payment ecosystem.

3. The 2nd petitioner maintains a bank account with respondent No.3/Yes Bank Limited (‘Nodal Account Bank’ for short), a Banking Company established under the Companies Act, 1956. The Nodal Account Bank is expected to carry out business for the nodal account holder i.e., PhonePe which is for a special purpose created for receiving monies from the participating Banks and remitting to specific merchants, in terms of the Reserve Bank of India mandate. The 2nd petitioner is thus an intermediary receiving on line payments and those payments getting into nodal account and payments to the seller moving out from the nodal account instantaneously.

4. The 2nd respondent one Ms. Madhuri R.K. attempts to order some items online through her bank account on 02.04.2021 and in order to enquire about the order, contacts customer care of e-commerce app on the number obtained on Google website. On doing so, an unknown person appears to have fraudulently gathered the bank account details of the 2nd respondent and falling prey to such fraud, the 2nd respondent transfers a sum of Rs.69,143/-to the said unknown person not by one but through fifteen transactions. All the transactions were collect requests which were approved by the 2nd respondent. A complaint then comes to be registered on 03-04-2021 and a Cyber Crime Incident Report (CCIR) comes to be filed by the 2nd respondent reporting such online financial fraud/UPI fraud with suspect name as Amith Mishra and suspect’s phone number was also provided by the 2nd respondent.

5. Upon receipt of the complaint from the 2nd respondent, the 1st respondent North CEN Police sent an e-mail to the cyber cell of the Nodal Account Bank i.e., Yes Bank to freeze the account belonging to the 2nd petitioner i.e., PhonePe and sought certain information which included the statement of account; closing balance statement and Linked ID card/KYC details. Upon receipt of the request from the Police, the Yes Bank followed the instructions and provided the information that was sought for. At this point in time, while furnishing information, the linked bank account leads to the account number of petitioner No.1. Later, the 2nd respondent/complainant files an application on 27-05-2021 with the 1st respondent informing them about the transaction that took place on 02-04-2021 and on receipt of the said information an FIR comes to be registered for offences punishable under Sections 66C and 66D of the Information Technology Act, 2000 against unknown person.

6. Respondent No.2 who had her account in ICICI Bank files an application before the concerned Court invoking Sections 451 and 457 of the CrPC praying to defreeze the personal account of the 1st petitioner and transfer the amount to the account of the 2nd respondent. The Investigating Officer submits his no objection and by an order dated 23-12-2021 the learned magistrate disposed of the application by issuing a direction to defreeze the account of the 1st petitioner and transfer the amount of Rs.69,143/-from his personal account to the account