IMPORTANT POINT
The court established that a bank account can be frozen under suspicion of criminal activity, and failure to report the freeze to the Magistrate does not invalidate the action.

ORDER :

(M. Nagaprasanna, J.) :

The petitioner is before this Court seeking a direction to the respondent to de-freeze his bank account held at Karnataka Bank in the name and style of Saif Oil Traders. As an interim prayer, he seeks stay of further proceedings in Crime No.124 of 2024 registered for offences punishable under Section 420 of the IPC and Sections 66C and 66D of the Information Technology Act, 2000 pending before the 45th Additional Chief Metropolitan Magistrate, Bengaluru.

2. Facts, in brief, germane are as follows:-

The petitioner claims to be a businessman engaged in oil trading. A crime comes to be registered in Crime No.124 of 2024 for offences punishable as afore-quoted against unknown persons. The complainant is one D.S. Rupa, a resident of Bengaluru City. It is the case of the complainant that she has been lured into transfer of money to the tune of Rs.2,28,72,343/- through whatsapp to various accounts and she has been defrauded by those account holders who have received the amount. Pursuant to registration of the crime, which is an online fraud, a debit freeze order is issued by the Investigating Officer to all the accounts which had received the amount from the complainant, either direct or indirect. One such account is that of the petitioner held in Karnataka Bank. On the account being frozen, the petitioner files an application before the learned Magistrate under Sections 451 and 457 of the Cr.P.C., seeking de-freezement of the account. When the said application did not find any favour at the hand of the learned Magistrate, the petitioner is before this Court seeking de-freezement of the account.

3. Heard Sri Sharan L. Jain, learned counsel appearing for the petitioner and Sri B.N. Jagadeesh, learned Additional State Public prosecutor appearing for the respondent/State.

4. The learned counsel appearing for the petitioner would vehemently contend that debit freeze order issued by the Investigating Officer has led to freezement of the account of the petitioner alleging that it is a crypto currency. It is the case of the petitioner that he being an innocent oil trader has nothing to do with the business of crypto currency. Therefore, the account that is frozen should be immediately de-frozen. He would also submit that as necessary in law, no intimation is sent to the Magistrate about the freezement of the account immediately after direction of such debit freeze. He would submit that, this is in violation of law i.e., Section 102 of the Cr.P.C., and, therefore, the account should be directed to be de-frozen immediately. He would seek to place reliance upon several judgments rendered by the Apex Court, this Court and several other High Courts to buttress his submission that freezing order of the Investigating Officer, if not communicated to the learned Magistrate, would vitiate the very order of freezing.

5. Per contra, the learned Additional State Public Prosecutor would refute the submissions to contend that the account of the petitioner is frozen on specific suspicion of part of crypto currency fraud or online fraud. The petitioner has admittedly received Rs.40,00,000/- into his account from the complainant directly. He is the direct beneficiary of the receipt of amount like all others. It is not that petitioner’s account only is frozen, but all the accounts to which money has been transferred by the complainant have been frozen. Insofar as the submission with regard to compliance with Section 102 of the Cr.P.C. is concerned, he would contend that debit freeze of the amount is marked as PF before the learned Magistrate. If it is marked as PF, it would undoubtedly be returned. Even otherwise, he would submit that non-reporting would definitely entail proceedings of the Investigating Officer, but it would not vitiate the act of freezement of the account of the petitioner. He would seek dismissal of the petition.

6. I have given my anxious consideration to the submissions made by the respective learned counsel and