Wecash Technology Private Limited And Another. vs. The State Of Telangana And Another

Held

The Court held that the Investigating Officer has the power to seize property, including freezing suspect bank accounts, as per established legal precedents like Mathews Peter Vs. Asst. Police Inspector. Section 91 of the Cr.P.C. empowers the Investigating Officer to summon documents or things for investigation. The Court found no error in the Investigating Officer issuing a notice to freeze the account of the first petitioner, which was considered a suspect account, to gather information. The Court also noted that any defect in intimation to the Magistrate is curable and does not vitiate the seizure per se, referencing T. Subbulakshmi Vs. Commissioner of Police. The Court concluded that the investigation is pending, the first petitioner company is an accused, and it has an agreement with M/s Richa Holdings, which is also implicated in other crimes. The Court found the impugned order of the Magistrate to be a reasoned order and saw no grounds to interfere under Section 482 of the Cr.P.C. However, considering the need to pay employee salaries, the Court directed the Investigating Officer to complete the investigation expeditiously, preferably within six weeks, and to consider the reply submitted by the petitioners. The petitioners were directed to cooperate with the investigation.

Facts

The petitioners, Wggu..h Technology Private Limited and its COO, N.R. Badrinarayana, filed a criminal petition under Section 482 of the Cr.P.C. seeking to quash an order dated 16.03.2021 passed by the XII Additional Metropolitan Magistrate, Hyderabad. This order had dismissed their application (Crl.M.P.No.855 of 2021) seeking to unfreeze the bank account of the first petitioner company. The account was frozen by the Investigating Officer in connection with Crime No.2498 of 2020, registered for offences under the IT Act and IPC, based on a complaint alleging loan app fraud. The petitioners sought directions to remove the debit freeze and allow for withdrawals to meet company expenses and statutory dues.

Key Issues

1. Whether the Investigating Officer has the power to freeze a bank account of a company that is an accused in a criminal case, and if so, under which provisions of law? 2. Whether the order of the Magistrate dismissing the application to unfreeze the bank account was a reasoned order and if there are grounds to interfere with it under Section 482 of the Cr.P.C.? Petitioner's Arguments: The petitioners contended that the first petitioner company is engaged in IT consultancy and software development, and operates an online platform for facilitating loans through NBFC partners. They argued that the freezing of their account was unjustified and hampered their business operations. They sought to set aside the impugned order. Revenue's (State's) Arguments: The Public Prosecutor argued that the FIR is not an encyclopedia and the investigation into the serious allegations of loan app fraud is ongoing. They stated that the Investigating Officer issued a notice under Section 91/160 of Cr.P.C. to collect evidence, analyze bank statements, and that the first petitioner company has been shown as Accused No.1. They asserted that the freezing of the account was for the purpose of investigation and analysis of fund transfers, and that the petitioners were not cooperating. They sought dismissal of the petition.