Transfer Only After Hearing 3rd Party A/c Holder, Legal News, ET LegalWorld – Legal Firms

Bengaluru: The high court has issued guidelines for magistrates to follow while dealing with applications filed under sections 451 and 457 of Criminal Procedure Code for amount transfer from frozen and de-frozen accounts.

Justice M Nagaprasanna ordered a refund of Rs 69,143 to Rahul Chari, whole-time director of PhonePe Private Limited. As per the guidelines, magistrates are required to ascertain whether the accused and his/her account have been identified by the investigating officer. If the rival claimant is not an accused, magistrates should see if intimation is given to the account holder about money being transferred from his/her account. Order for transfer of amount from the particular account shall be made only after hearing the person from whose account the money is sought to be transferred to the complainant’s account.

“Magistrates are required to note that they are dealing with properties of third parties. Decision on an application under sections 451 and 457 cannot become a frolicsome act on the part of magistrates merely because it is subject to indemnity,” the judge observed. “This court is coming across scores of cases where the account is frozen and de-frozen and the amount due to the complainant from a suspect/accused is transferred to the former’s account from the accounts of third parties, which is contrary to all canons of law,” the judge noted.

The judge said the amount, however small it is, is the property of an individual in whose account it is held and it cannot be taken away without bringing it to his knowledge.

“There has been a debit from the account of the first petitioner (Rahul Chari) for satisfying the complainant (RK Madhuri from Yeshwantpur). While the right of a complainant is to be looked into, since the complainant is the victim of a fraud, the investigation cannot be cut short without unearthing the fraud and closing the issue, by transfer of amount from a third party, in the case on hand, from the personal account of the first petitioner,” the judge said, while quashing the December 23, 2021 order passed by the 1st additional chief metropolitan magistrate, Bengaluru, directing the transfer of amount from Chari’s account to the complainant’s.

On April 2, 2021, the complainant Madhuri ordered some items online. An unidentified miscreant tricked her into transferring Rs 69,143 to his account in 15 PhonePe transactions. She then registered a cybercrime complaint. Cybercrime police directed Yes Bank (the nodal bank) to freeze the account of PhonePe. The information regarding linked bank accounts also included Chari’s account number.

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