Dismissed

Unocoin Technologies Private Limited v. The State of Telangana

Telangana HC20 Aug 2025CRLP/16115/2024

Case brief

AI extract

What is this about?

The High Court dismissed a criminal petition seeking to quash charges against Unocoin Technologies Private Limited. The court held that since the disputed amount had already been transferred pursuant to a non-noticed lower court order, there was no remedy to remand the matter for hearing to determine the company's role. Pending investigation precluded quashing.

What did the court decide?

Petition under Section 528 BNSS to quash FIR and set aside lower court order dismissing application for quashal is dismissed.

Unocoin Technologies Private Limited Vs The State of… — Money Laundering | Telangana HC (2025)

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[³³⁸⁵ ]

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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WEDNESDAY, THE TWENTIETH DAY OF AUGUST TWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HONOURABLE SMT JUSTICE K. SUJANA

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CRIMINAL PETITION NO: 161't5 OF 2024

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Between:

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Unocoin Technologies Private Limited , 2nd Floor, S S Puram Extension, S S Puram Main Road, Tumkur, Karnataka, lndia - 572102. Represented by Mr. Qagepalli^{Vijayakumar Harish S/o B.N.Vijayakumar,aged about 43 years,Occ.} Director, Unocoin Technologies Pvt Ltd

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..Petitioner/Accused No.1 4

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AND

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1 The State of Telangana, Rep. by its Public Prosecutor, High Court for the State of Telangana

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...Petitioner/Accused No.1 4

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2 Dr.Jangala Suresh Babu, Aged Not Known, Occ. Not Known, R/o Flat No. 601, Zeenath Rests ency, Near HDFC Bank, Srinagar Colony Main Road, Hyderabad, Telangana, 500073.

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...Respondent No.2/De-facto Complainant

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2 Bandhan Bank, Silver Land Mark, The Hut Complex F2, F3p 1st Floor, MG Road, Tumakuru, Karnataka, 572102. IFSC Code. BDBL0001865 AIso, at. Ground Floor, 3-5-920, AP State Housing Board, Himayat Nagar, Hyderabad, Telangana, 500029. Also At. Head Office. DN-32, SectorV, Salt Lake, Sector V, Kolkata, 700091

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...Respondent No.3

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4 9tate^{Bank of lndia, HACA Bhavan, oppositeto Assembly Road, Saifabad,} Hyderabad, Telangana, 500004. IFSC Code. S81N0017745 Also At. Head Office. State Bank Bhavan, Madame Cama Road, Nariman Point, Mumbai - 400021, Maharashtra, lndia.

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...Respondent No.4

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Petition under section 528 of BNSS praying that in the circumstances stated in the l\ilernorandum of Grounds of criminal petition, the High court may be pleased to call lor records and euash the FIR bearing crrme N-o. 1zg of 2023, registered on^(16.04.2023 at central crime Station, Detective Department, Hyderabad, in furtherance to the proceedings as far as it pertains to the petitioner, Accused No. 14 (unocoin Technologies private Limited) in the interest of justice and consequently pass an order setting aside the order dated 2g.1 1.2024 jassed by the Honble sessions Judge, Hyderabad, in criminal Miscellaneous petition No. 231 oI 2024, in crime No. 129 of 2023, which directed the transfer of funds amounting to Rs. 36,58,350.27 from the petitioners bank account to the account of Respondent No.2 (de facto complainant), as the said order was passed without notice to the Petitioner and suffers from procedural and jurisdictional infirmities_

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l.A. NO: 2OF 20ir-4

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Petition urrder section 528 of BNSS praying that rn the circumstances stated in the Merrorandum of Grounds of criminal petition, the High court may be pleased to stay all further proceedings in crime No. 129 of 2or3 registerei at central crime slation, Detective Department, Hyderabad, including ariest of the Petitioner.

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l.A. NO: 3 OF 201t4

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Petition urrder section 528 of BNSS praying that in the circumstances stated in the Menrorandum of Grounds of criminal petition, the High court may be pleased to direct Respondent No. 3 and Respondent No. 4 to seiure the amount of Rs. 36,58,350.27 as transferred in pursuance to the order dated 28.11.2024 passed by the l- on'ble sessions Judge, Hyderabad, in criminal Miscellaneous Petition No. 231 ct 2024, in Crime No. 129 oiZOZt. I

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This Petiti.n coming on for hearing, upon perusing the Memorandum of Grounds of criminal Petition and upon hearing the arguments of sri Rubaina s Khatoon, Advocate'for the^petitioner and sri M vivekananda Reddy, Assistant Public Prosecutor on behalf of the Respondent No.'l and of Mrs. K Kishanmayee, Advocate for the Respondent No.2 and Sri sujit sasidharan, Advocate for the Respondent No.3

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The Court made l:he following: ORDER

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THE HONOURABLE SMT. JUSTICE K. SUJANA

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CRIMINAL PETITION No.16115 OF 2024

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ORDER:

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This crimina-l petition is filed under Section 528 of Bharatiya Nyaya Suraksha Sanhita, 2023 by the petitioner/A. 14 seeking the Court to quash the proceedings against him in Cr.No.129 of 2023 of Central Crime Station, Detective Department, Hyderabad and to set aside the order dated 28. ll.2024 passed in Crl.M.P.No.237 of 2024 in Cr.No. 129 of 2023 by the Sessions Judge, Hyderabad. The offences alleged against the petitioner are under Sections 406,419 and, 42O r/w.Section 34 of Indian Penal Code and under Section 66-D of the Information and Technologr Act, 2000.

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The brief facts of the case are that on 06.04.2023 the defacto complainant lodged a complaint before the police qstating that he was defrauded of Rs. 1,86,93,500/ - through online trading platform named Lexatrade. The FIR claims that the transactions were facilitated by multiple payment gateways including the petitioner herein Unocoin Technologies Private Limited and the accused manipulated the complainant in making repeated payments on various pretexts including stabilizing trade, bank commissions and

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rolling⁽ ommissions eventually locking him ou t of his trading account. Hence, requested the police to take necessary action against the accused. Basing on the saicl r:omplaint, police registere l the case against the accused for the above offences.

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Hearcl Ms. Rubaina S Katoon, learned Counsel appearing for the petitoner, Mrs K. Kishanmayee, learned counsel zrppearing for respondent No.2, Sri Sujit Sasidharan, learned r;ounsel appearing for resprndent No.3 and Sri M.Vivekananda Reddy, learned Assrstant Public Prosecutor appearing for the respondent-State.

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Th: contention of learned counsel for the petitioner is that Unocoin Technologies Private Limited i.e., petitioner herein was a technolol5r-based company incorporated under t h(: Companies Act, 1956, with Corporate Identification Nrgmber (CIN): U722OOI<A2O15P[C08O 145. The Petitioner operatecl Inclia's leading crypto-asset and virtual digital asset (VDA) trading platform (www.unocoin.com), which had over 2.8 million users across the country. Its primary business involved providing an online platform that enabled customers to buy, sell, store, and transfer virtual di;$tal assets such as Bitcoin, Ethereum, and USDT, among

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-3-

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others. She further contended that^petitioner functioned^{purely as} an intermediary under Sectioo V9 of tlne I.T.Act. The^{company only} facilitated transactions between buyers and seliers on its^platform and charged a nominal service fee for these services. It neither controlled, directed, nor influenced the trades initiated by^its customers, and it did not benefit from the^profrts or^{lossesincurred} by them. The petitioner was included in the crime by the^Detective department attributing negligence of the^{petitioner herein,but it is} no way connected with the said offences. Petitioner had no control over external valet addresses or their legality and this^{has been} explicitly stated in its terms of use. The complainant has alleged that petitioner was involved in some transactions with^other accused individuals and companies. However,^{petitioner herein is} merely a service provider and intermediary faciiita{ing transactions on its platform. Further, petitioner has never dtettly^interacted with the complainant.

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Learned counsel further contended that the defacto complainant filed Crl.M.P.No.23l of 2024 beforc^the trial^{Court to} defreeze^-the account of accused and to transfer an amount^of Rs. 1,86,93,5O0 / - into his account bearing No.7O329749259 ard

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that amount was in various gateway companies. The trial Court without giving notice to this petitioner allowed the said petition and this petitioner is no way connected with any of the offences alleged against the petitioner. Hence, as an intermediary platform they use it for their business purpose. As such, requested the Court to refund the said amount and also to quash the proceedings against this petitioner.

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On the other hand learned Assistant Public Prosecutor opposed ,he same stating that there are serious allegations against this petitioner also. At this stage, it cannot be decided whether the petitioner herein is only an intermediary platform or it has any role in the said offence, which can be known only after investigation. Further, investigation is not yet completed, as such, prayed this Court to rlismiss this petition. t

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The respondent No.2 filed counler stating that there are specific e.llegations in the complaint that all the accused have dishonestly intended to deceive the defacto complainant and all of them conspired together and fraudulently induced him to deliver a sum of F.s.1,86,93,500 /- for getting wrongful gain to them and there is r:o special law governing c4rpto excharges in India. The

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existing norms should not^govern the^{petitioner to do such illegal} activities. The present fraud is done using the^platform of petitioner. As such, petitioner is also liable for prosecution and requested the Court to dismiss this^petition.

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Respondent No.3 hled counter opposing the petition stating that they have transferred an amount of Rs.36,58,35O/- to respondent No.2 account basing on the directions of the crimina-l Court and a-lso direction given by the ACP, CCS Police. As such, requested this Court to dismiss this^petition.

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Considering the submissions made by the respective counsel and the material placed on record, the first contention of petitioner herein is that without giving any notice, the tnal Court disposed of Crl.M.P.No.23 | of 2024 and de-freezed the account of petitioner herein and transferred the amount from the "..orrl" of petitioner company to the defacto complainant. The trial Court passed the order in Crl.M.P., on 28.1 7.2024 and this criminal petition is liled on 24.12.2024, wherein by that time, the amount was already transferred to the account of defacto complainant. Therefore, now there is no remedy to remand back the same for hearing the petitioner herein.

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Thc second contention of petitioner herein is lhat it is an intermed ary platform which is a gateway for business transacti,rns. Therefore, there is no dishonest intention on the part of petitioner whereas the transactions arlr done on the platform rvhich is only an intermediary and gatewav company. Accordinll to the petitioner it is doing the ttrsrness of crypto currency in Bitcoin and transferring virtual digital assets such as EthereunL and USDT and others. Whether pelitioner is having dishonesl intention or it is only a gateway compan-v has to be decided during the course of investigation, now it is only at the FIR stage and investigation is still pending accorrling to Iearned assistant Public Prosecutor. Therefore, at this st:Lge, the petitioner is not entitled for quashing of the proceedings and the same is liable to te clismissed.

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1 1. Accorrlingly, the Criminal Petition is dismissed.

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Miscellaneous petitions, if any, pending shall stand closed

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Sd/. N. SRIHARI

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DEPUTY REGISTRAR //TRUE COPYII (/ SECTION OFFICER

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To,

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The Xll Aclditional Chief Metropolitan magistrate at Nampally, Hyderabad 2. The statio r House Officer, lNSp ADMIN(DD) potice Station, Hyderabad 3. Two CCs o the Public Prosecutor, High Court for the State of ielangana at HyderabarJ (OUT)

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One CC tc, Sri Khatoon, Rubaina S, Advocate [OPUC]

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One CC tc, Mrs. K Kishanmayee, Advocate tOpUCl Q^{One CC tc Sri Sujit Sasidharan, Advocate} tOpUCl

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Two CD Cc,pies OIV

<sup>I ' ADK,/PSI,

HIGH COURT

DATED:2010812025

ORDER

CRLP.No.16115 of 2024

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DISMISSING THE CRLP
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Unocoin Technologies Private Limited v. The State of Telangana

Case brief

What is this about?

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Unocoin Technologies Private Limited v. The State of Telangana

Case brief

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