Allowed

Sri. Shreeram. M. J. v. the Bank Manager

Karnataka HC18 Nov 2023WP/24220/2023

Case brief

AI extract

What is this about?

Petitioner, a mutual fund investor, challenged a debit freeze on his bank account imposed by police via a vague notice. The Court held the freeze was contrary to law due to lack of specificity regarding the money trail and non-compliance with Cr.P.C. procedures, granting a writ of mandamus to defreeze the account.

What did the court decide?

Issuance of writ of mandamus directing the Respondent Bank to defreeze the petitioner's account forthwith.

Sri. Shreeram. M. J. Vs the Bank Manager — Pension and Retirement Benefits | Karnataka HC (2023)

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1 - NC: 2023:KHC:41302 WP No. 24220 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 24220 OF 2023 (GM-RES)

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BETWEEN:

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SRI. SHREERAM. M. J. S/O JAGADISH M.T AGED ABOUT 21 YEARS R/AT MARUTHI NILAYA ANJANEYA STREET VIJAYAPURA CHIKKAMAGALURU - 577101

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…PETITIONER

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(BY SRI. SANDESHA A.S., ADVOCATE)

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AND:

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Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA

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THE BANK MANAGER CANARA BANK BASAVANAHALLI BRANCH RATHNAGIRI ROAD, CHIKMAGALURU TOWN CHIKMAGALURU - 577 101

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…RESPONDENT

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(BY SRI. VIGNESH SHETTY, ADVOCATE)

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THIS WP IS FILED UNDER ARTICELS 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO-DIRECT TO RESPONDENT TO CONSIDER THE REPRESENTATION MADE BY PETITIONER SAME HAS MARKED AS ANNEXURE-B AND DIRECTING TO UNFREEZE BANK ACCOUNT OF PETITIONER.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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NC: 2023:KHC:41302 WP No. 24220 of 2023

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ORDER

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The petitioner is before this Court seeking the following prayer:

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PRAYER

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WHEREFORE, it is prayed that, this Hon'ble

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Court may kindly be pleased to:

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i. Issue a Writ of Mandamus or any other writ or order or direction in the nature of a Writ, directing to Respondent to consider the representation made by petitioner same has marked as ANNEXURE - B and directing to unfreeze bank account of petitioner in the interest of justice and equity.

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ii. Pass such other orders, as the Petitioner is entitled to in the facts and circumstances of the case, including the cost of the proceedings, in the interest of justice and equity."

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Heard the learned counsel Sri.Sandesha A.S., appearing for the petitioner and the learned counsel Sri.Vignesh Shetty, appearing for the respondent.

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The petitioner claims to be a Social Media Creator

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has invested in a mutual fund, which he does frequently

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3 - NC: 2023:KHC:41302 WP No. 24220 of 2023

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through online trading and is a small investor for a savings account. The petitioner in that light invested in a Mutual Fund of Sai Venkateswara Poultries for the last six months for which

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the petitioner gets a profit of Rs.5,700/- and towards the said profit, Rs.3,186.45/- is credited to the petitioner's Canara Bank, Savings account through NEFT.

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It transpires that the cyber Police in the State of Gujarat are tracing and tracking down certain transactions of Mutual Fund operators. This leads to direction to all the Banks to a debit freeze the account of all those persons, who had any transaction with the Mutual Fund operators. A communication sent to the Banks is placed for a perusal by the learned counsel appearing for the Bank. The communication reads as follows:

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" Date:-09/05/2023

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TO,

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The Nodal officer All Bank

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Sub : Mark debit freeze on account when we raised complain on MHA Portal

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Ref . our e-mail dated 27-08-2022 from h [email protected]

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4 - NC: 2023:KHC:41302 WP No. 24220 of 2023

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I am Deputy Superintendent of Police, State Cyber Crime Cell, CID Crime, Gandhinagar. For giving immediate response to victims of cybercrime fraud, MHA has launched 1930 helpline and NCCR portal which is doing good with not only reporting financial cybercrimes but also saving hard earned money of victims. Complaints reported on this portal are dealt by police based on the information available in the complains and the counterpart, banks, on freezing accounts and giving details of money which is transferred to another bank. We find from our experienced that it could be better if support and proactive action taken from all financial institutions.

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Every request on MHA portal form our side or any bank on the behalf of us is to be considered as a notice under sections 91 & 102 of Cr.P.C. 1973. I wanted to bring to your notice that to stop use of fraudulent accounts again and again, we have instructed your bank to debit freeze bank accounts with 27-08-2022 dated email, in which fraudulent money has been transferred but we have come to notice that, after 3-4 stages of money trail, there are so many accounts belonging to bonafide businessman or common citizen, which have been freezed. To solve the issue and protect bonafide people, we have requested to MHA to mark every account with the number of involvement layer in trail of a particular case. Now, this service has been started on the portal. I would like to request you to mandatorily mark debit freeze on account involved up to the 3rd layers after the account of victim in the trail and fraudulent amount to be lien marked in accounts involved in remaining layers in particular case. Also provide beneficiary details on MHA Portal, if amount transferred to the another bank/e-wallet/merchant.

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If your customer approaches to your bank for unfreezing his account, inform them to contact

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NC: 2023:KHC:41302 WP No. 24220 of 2023

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us on phone number 079-2325078 and email ID [email protected] with below mentioned list of documents and details will be provided by freezed account holder for his verification of genuineness.

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customer Full name and Address,

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Business/Job details with documents,

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Reason behind transaction and fraudulent money,

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Bank Statement which shows fraudulent transaction,

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Please send your Acknowledgment Number

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Bank account details which is Freeze.

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Aadhar Card, PAN Card,

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If account belong to corporate/nodal account then provide company details like End Beneficiary Details, company MOA, AOF, GST, MCA, director details ETC.

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If your bank gets court order to unfreez the account from any court, let us know details of order and do as per order. If you receive mail to unfreez the account from any Police Station, other than us then suggest them to send unfreeze request through State Cyber Cell, CID Crime, Gandhinagar, please do not unfreeze the account except you receive mail from our e-mail ID [email protected].

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There are many users from single bank on the Portal with their different email IDs so it is very difficult to decide to whom we should contact to unfreeze account, we request you to provide specific email ID to unfreeze the account.

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Sd/(B.M Tank) Deputy Superintendent of Police State Cyber Crime Cell CID Crime, Gandhinagar, Gujarat, State"

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NC: 2023:KHC:41302 WP No. 24220 of 2023

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The communication is as vague, as vagueness could be, as there is nothing indicated about what is the investigation going on, and for which the account is sought to be debit frozen. The Bank has only followed the directions. The direction does not indicate any semblance of reasons.

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In the light of the direction not indicating money trail towards the petitioner, who is admittedly a small time investor and has received funds to the tune of Rs.3,186.45/- as profit from the Mutual Fund that he has invested, the debit freeze directed, is contrary to law apart from the fact that no procedure as required under the Cr.P.C., to direct debit freezement is even followed by the Police, who are directed to do so.

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In the aforesaid light, the petitioner becomes entitled to issuance of a writ in the nature of mandamus directing defreezment of the account of the petitioner.

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For the aforesaid reasons, the following:

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7 - NC: 2023:KHC:41302 WP No. 24220 of 2023

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ORDER

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i) The writ petition is allowed.

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ii) A mandamus issues to the respondent - Bank to defreeze the account of the petitioner, forthwith.

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Sd/JUDGE

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KG List No.: 1 Sl No.: 28

Sri. Shreeram. M. J. v. the Bank Manager

Case brief

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Sri. Shreeram. M. J. v. the Bank Manager

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