Telangana High Court
Anand Property Finance Limited vs The State Of Telangana And 4 Others on 27 April, 2022
Author: Lalitha Kanneganti
Bench: Lalitha Kanneganti
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT
HYDERABAD
WRIT PETITION No. 17080 of 2022
Between:
Anand Property Finance Limited,
Rep. by its Authorised Signatory Prashant Rambhau Tandle
... Petitioner
AND
The State of Telangana
Represented by its Principal Secretary,
Department of Home, Hyderabad & others.
... Respondents
DATE OF JUDGMENT PRONOUNCED: 27.04.2022
SUBMITTED FOR APPROVAL:
HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
1. Whether Reporters of Local Newspapers
may be allowed to see the judgment? No
2. Whether the copies of judgment may be
marked to Law Reporters / Journals? Yes
3. Whether His Lordship wish to
see the fair copy of the Judgment? Yes
___________________________
LALITHA KANNEGANTI, J
2
* HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
+ WRIT PETITION No. 17080 of 2022
% 27.04.2022
Between:
Anand Property Finance Limited,
Rep. by its Authorised Signatory Prashant Rambhau Tandle
... Petitioner
AND
The State of Telangana
Represented by its Principal Secretary,
Department of Home, Hyderabad & others.
... Respondents
! Counsel for Petitioner : Sri T. Pradyumna Kumar
Reddy on behalf of Sri
Vishal Porandla
^ Counsel for Respondents : GP for Home
< Gist:
> Head Note:
? Cases referred:
1) 2005(3) ALD 233(LB)
(1998) 8 SCC 1
3
THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
WRIT PETITION No. 17080 OF 2022
O R D E R:
This Writ Petition is filed questioning the action of the 3rd respondent in directing the 4th respondent, without any information to the petitioner, to freeze the petitioner's bank account bearing No. 400280674777 with RBI, Andheri Marol Branch, IFSC Code RATN0000192 as illegal and arbitrary.
2. Sri T. Pradyumna Kumar Reddy, learned Senior Counsel appearing on behalf of Sri Vishal Porandla, learned counsel for the petitioner submits that the petitioner is a non- banking financial company registered under the Companies Act with an aim to provide financial services. It performs the functions of delivering credit to the underprivileged, underserved segments of the society through small loans for serving their various needs. It is submitted that the petitioner is a lending facility designed to empower various poor and underprivileged people and operates through its fintech partners who own and operate platforms through which the loans are procured by the underprivileged sections of the society. It is submitted that on 05.03.2022, while trying to make transaction from its RBL Bank Account No. 400280674777 with Andheri 4 Marol Branch, all of a sudden, the transaction was declined. It is submitted that on enquiry with the 4th respondent bank, the petitioner was orally informed that upon instructions of the 3rd respondent to freeze the bank account, the same was frozen on 15.03.2022 and the account continues to be frozen even as on the date of filing of the Writ Petition. Learned Senior Counsel submits that the respondent bank has not given any further information and it is also informed to the 3rd respondent that their actions are causing severe business loss and damage to the petitioner. It is submitted that the 3rd respondent simply stated that FIR No. 325 of 2022 was registered on the basis of the complaint given by one R. Jhansirani and they are conducting investigation and the procedure will go on and he cut the call abruptly. He submits that the case of the complainant is that due to some family emergency, she needed a loan and she searched on Google Play Store where she saw the cash pocket App and she has submitted all her details along with her Aadhar card, pan card and selfie photo and that she has taken a loan of Rs.5,500/- and within five days, she had paid Rs.10,000/- and in the same way, she had taken multiple loans from few Apps. She also alleges that in time, she is unable to pay and the petitioner has suggested her to take a loan from 5 other Apps for which they sent links. A total amount of Rs. 75,000/- has been transferred to her account from 35 Apps. She stated that she has repaid Rs.1,73,046/- and the petitioner company is blackmailing to pay the amount again and sending morphed photos, videos, Aadhar card, pan card copies to all her contact lists. It is submitted by the learned Senior Counsel that all these allegations are made with an intention to cause disrepute to the petitioner's company and nothing has been established by the complainant. It is submitted that the de facto complainant is not a customer to the petitioner company and the company is no way connected with the said crime. Learned Senior Counsel submits that the bank has adopted a very arbitrary approach while freezing the accounts of the petitioner company without bothering to scrutinize the entries and nature of transactions. He submits that before exercising the power under Section 102 Cr.P.C., the police officer has to assess the need to freeze the bank account and after formation of an opinion, supported by reasons he can freeze. According to him, in the instant case, no reasons are stated and with an ulterior motive, he has bypassed the law and seized the accounts of the petitioner company. He submits that the action of the 3rd respondent in not informing the magistrate forthwith is also in 6 gross violation of Section 102(3) Cr.P.C. and the entire action of the 3rd respondent is liable to be set aside. It is submitted that before freezing the account, no notice is given to the petitioner. Hence, the petitioner having no other alternative has come up before this Court.
Learned Senior Counsel submits that Section 102(1) Cr.P.C. gives power to police authorities to freeze / seize if suspicion arises and the 3rd respondent has seized the account of the petitioner, however, he has failed to provide any written reasonable justification for freezing the account. He submits that the 3rd respondent has failed to comply with the procedure of seizure / freezing enumerated in Section 102(3) Cr.P.C. wherein the report needs to be forthwith forwarded to the Magistrate. He relied on the judgment of this Court in A.P. Products v. State of Telangana (W.P.No. 13363 and 10565 of 2020) and submits that the Magistrate has to be informed within reasonable time without any undue delay. He submits that so far, the report is not submitted. The learned Senior Counsel also relied on the order passed by this Court in Meridian Educational Society v. The State of Telangana (W.P.No. 21106 of 2021) and submits that if there is any violation in following the procedure under Section 102 Cr.P.C., 7 freezing of account cannot be legally-sustained. He has also relied on the judgment of the High Court of Karnataka at Bengaluru in Writ Petition Nos. 13516-13518 (GM-Police) wherein the Court has opined that unless and until there is a strong suspicion against the petitioners therein, the police would not be justified in freezing the account belonging to the petitioners. For, such freezing of account adversely affects the right to life under Article 21 of the Constitution of India but in order to balance the conflicting interests of the petitioners, with the interest of the Investigating Agency and the interest of the complainant, in the interest of justice, Respondents 1 and 2 are directed to de-freeze the account belonging to the petitioners, provided the petitioner submits a bond of Rs.20,00,000/- before the Sessions Judge before whom the present case is pending.
3. Learned Government Pleader for Home Sri Srikanth Reddy basing on the written instructions, submits that during the course of investigation into the complaint of the complainant and other cases, the 3rd respondent has sent notices to Razor Pay Payment Gateway with a request to furnish the details of all the loan Apps and also obtained the details of beneficiary account holders involved in the money transactions in the said cases. It is submitted that during the investigation, the 8 respondent police came to know that one of the beneficiary with A/c No. 400280674777 of RBL Bank has been involved in the said case, as such, notice was sent to the RBL bank and got freezed the said account. It is submitted that notice was issued to the petitioner to submit certain information pertaining to the petitioner company and its activities for the purpose of investigation and intimation was given to the Hon'ble XII ACMM Court, Nampally, Hyderabad regarding freezing of the said account. It is submitted that regularly huge numbers of victims are approaching the Cyber Crime Police Station, Hyderabad and so far, more than 50 cases regarding harassment by loan Apps were registered at Cyber Crime P.S., CCS., DD, Hyderabad and petitions were also being received and enquired into by them.
4. The grievance of the petitioner is that the respondent police have freezed the account of the petitioner. According to the petitioner, there is no substance in the complaint and in view of the law laid down by the Karnataka High Court, the petitioner is entitled for defreezing the account. Further, the procedure was not followed by police and intimation was not given to Magistrate as contemplated under the provisions of the Cr.P.C.
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5. The first and foremost issue that has to be decided is about the maintainability of the Writ Petition. The account has been freezed in connection with a crime and the police under Section 102(3) Cr.P.C. have to file a report before the Magistrate. In this case, the police have filed the report before the Magistrate and there is no irregularity in complying with the said provision. For seeking interim custody of any of the properties, the only provision under the Cr.P.C. is Section 451. The petitioner has relied on the judgment rendered by the Karnataka High Court wherein it was held that freezing of account also affects right to life of the petitioner, as such, he can maintain a Writ Petition.
6. Though there are no fetters in entertaining a writ petition under Article 226 of the Constitution of India, whenever a person complains of violation of his fundamental right or statutory right, one of the self imposed restraint is when there is statutorily engrafted adequate and efficacious alternative remedy available to such person to redress his grievance the court do not entertain the writ petition but relegate the party to avail such remedy before invoking extraordinary jurisdiction of this Court.
107. The writ remedy is no doubt an extraordinary remedy and in every case just because a case is made out on action / inaction of an authority vested with power, the Writ Court will not entertain the writ petition and the affected party has to avail the remedy available under law. In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai2, the Hon'ble Apex Court has observed that under Article 226 of the Constitution, the High Court having regard to the facts and circumstances has discretion to entertain or not to entertain a Writ Petition but the High Court has imposed certain restrictions one of which is that if an effective alternative remedy is available, the High court would not normally exercise the jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies; namely where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. 1 2005(3) ALD 233(LB) 2 (1998) 8 SCC 1 11
8. In the light of the law laid down by this Court and the Apex Court referred to supra, when there is a statutorily- engrafted adequate and efficacious alternative remedy available to the person, who complains, to redress his grievance, the Court do not entertain the writ petition but relegate the party to avail such remedy before invoking extraordinary jurisdiction of this Court. In this case, the effective alternative remedy available to the petitioner is to file an Application under Section 451 Cr.P.C. which is an effective alternative remedy, but not a Writ Petition invoking Article 226 of the Constitution of India. In the judgments that are relied on by the petitioner, the maintainability of the writ petition was neither questioned nor answered. Hence, those judgments are not applicable to the facts of this case.
9. Learned Senior Counsel submits that the petitioner is not arrayed as an accused in the crime and further, without issuing any notice to the petitioner, the account has been freezed. At this stage, it is appropriate to look at Section 102 Cr.P.C. which reads as under:
" 102. Power of police officer to seize certain property-
(1) Any police officer 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.12
(2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer 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 difficulty 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].
The investigating officer basing on the material and investigation done so far emerging from the transactions done from the bank account which created suspicion of commission of offence has exercised the discretion. Further, such discretion exercised by the officer cannot be found fault with nor this Court can interfere with the investigation process. Issuance of prior notice is not contemplated under Section 102 Cr.P.C. and this issue is no more res integra. Section 451 Cr.P.C. or Section 102 Cr.P.C. do not make any distinction between an accused or any other person. When the account of a person who is not an accused is seized, still he has to go before the Court below and file an Application under Section 451 Cr.PC.
10. In this case, it is alleged that the innocent people are trapped in the form of software loans and other loans. Police 13 after seizing the account as contemplated under Section 102 Cr.P.C. has intimated the same to the Court as such there is no procedural illegality. Writ Petition filed under Article 226 of the Constitution of India is not maintainable as there is an effective alternative remedy available under Section 451 Cr.P.C.
11. Hence, the Writ Petition is disposed of directing the petitioner to avail the appropriate alternative remedy available to him under law. There shall be no order as to costs.
12. The Miscellaneous Applications, if any shall stand automatically closed.
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LALITHA KANNEGANTI, J 27th April 2022 ksld 14 15