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2024 Supreme(Online)(KER) 35343
HIGH COURT OF KERALA
V. G. Arun, J
MUHAMMED SABITH P.A – Appellant
Versus
AXIS BANK – Respondent
WP(C) 33915/2024
NAJAH EBRAHIM V.P., PREMCHAND M
The court established that while delay in reporting a seizure under Section 102 Cr.P.C. does not invalidate it, total failure to report affects its validity, protecting account holders' rights.
Headnote:(A) Criminal Procedure Code, 1973 - Section 102 - Cyber Crime - Freezing of bank accounts based on police requisition - Directions issued to banks to limit freezing to amounts specified by police - Police must report seizure to Magistrate as per Section 102(3) - Delay in reporting does not vitiate seizure but total failure to report affects validity. (Paras 4, 6, 7, 8)
(B) Precedents - The court agrees with directions in Dr. Sajeer's case regarding freezing of accounts and emphasizes the need for police compliance with reporting requirements. (Paras 2, 5)
Facts of the case:
The petitioner challenges the freezing of his bank account by the bank based on police requisition related to online financial fraud. The petitioner seeks similar relief as granted in Dr. Sajeer's case.
Findings of Court:
The court reiterates the importance of police compliance with Section 102 Cr.P.C. and issues directions to ensure timely reporting of seizures to the Magistrate.
Issues: The main issues include the validity of freezing bank accounts without timely reporting to the Magistrate and the rights of account holders not accused in the crimes.
Ratio Decidendi: The court ruled that while delay in reporting does not invalidate the seizure, failure to report affects its validity, emphasizing the need for proper procedure to protect account holders' rights.
Result: Directions issued to police and banks regarding the handling of account freezes.
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 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. 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 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 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 ofÏcer to seize certain property - (1) Any police ofÏcer 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 ofÏcer, if subordinate to the ofÏcer in charge of a police station, shall forthwith report the seizure to that ofÏcer.
(3) Every police ofÏcer 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 difÏculty in securing proper accommodation for the custody of such property, or where the continued retention of the 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
