The court emphasized the need for a thorough investigation before freezing accounts and considered the seriousness of the allegations and the prevalence of loan app fraud cases.

ORDER :

This Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) by the petitioner/accused to quash the order dated 12.04.2021 passed in Crl.M.P.No.186 of 2021 in Cr.No.698 of 2020 on the file of VII Additional Junior Civil Judge-cum-VII Additional Metropolitan Magistrate, L.B.Nagar, at Hyderabad. The petitioner is accused in the above said crime.

2. Heard Sri S.Niranjan Reddy, learned Senior Counsel representing Sri N.Naveen Kumar, learned counsel for the petitioner and learned Public Prosecutor and perused the record. Despite service, none appears for the 2nd respondent/defacto-complainant.

3. FACTS OF THE CASE

i) On the complaint dated 23.12.2020 lodged by 2nd respondent the Police, Cyber Crime Police, Station, has registered a crime vide Cr.No.698 of 2020 for the offences under Sections 417,419, 420 IPC and Sections 66-C and D of the Information Technology Act, 2008 (for short, ‘the Act’).

ii) The account of the petitioner company was frozen by the Investigating Officer in the present crime.

iii) The petitioner company has filed a petition under Sections 451 and 457 of Cr.P.C. vide Crl.M.P.No.186 of 2021 in Cr.No.698 of 2020 before the Court below seeking to defreeze the petitioner’s account bearing No.57500000335009 with HDFC bank, Stephen House Branch, Kolkata Branch and to permit the petitioner company to operate the said account for the purpose of business.

iv) The Court below vide impugned order dated 12.04.2021, dismissed the said application.

v) The allegations in the complaint lodged by the 2nd respondent are that he took a loan of Rs.10,000/- from M.Pocket Loan App and while sanctioning loan, they have taken his phone data including contact details. Due to his personal problems, he was unable to repay the loan. Now, he is receiving several calls with regard to the loan harassing him mentally to transfer Rs.33,000/- with high rate of interest. Some unknown persons also contacting his family members and friends and talking in abusive language about him. They are also sending multiple e-mails through mail id:noreply@mpocket@gmail.com, causing mental trauma. Due to which he is unable to lead his personal life peacefully.

vi) The 2nd respondent specifically mentioned about the details of mail Id., through which he received calls using abusive language and thereby causing mental trauma to him. The above said allegations would reveal that it is a case of Loan App fraud.

4. CONTENTIONS OF THE PETITIONER

i) The petitioner company is a private limited company incorporated under the provisions of the Companies Act, 1956 dealing the business of extending loans to individuals including college students and young professionals for their daily needs.

ii) The petitioner company is registered as a Non-Banking Financial Company (for short,’ NBFC’) and obtained requisite license from the Reserve Bank of India and since then, the petitioner is conducting its business duly and diligently complying with the guidelines prescribed by the Reserve Bank of India from time to time.

iii) The petitioner company has entered into a service agreement with M/s Maybright Ventures Private Limited (the MVPL) for providing technical and analytical services in the conduct of business and in pursuance of the agreement, an App was developed by the MVPL called ‘mPokket’ to extend loans and execute necessary KYC documents and other requisite paperwork in the form of loan agreements through electronic mode.

iv) The petitioner company through ‘mPokket’ App provide loans ranging Rs.500/- to Rs.2,000/- to be repaid within 2 to 3 months.

v) The 2nd respondent, being a student and one of the users of the ‘mPokket’ App, availed loan from the petitioner company totaling to an amount of Rs.10,000/- by way of 9 different loans agreeing terms and conditions and executed online loan agreements. Later he failed to repay the same in the prescribed time in spite of providing waiver.

vi) Since the petitioner company made requests for