Case Note & Summary
The petitioners, Sri Rahul Chari (Whole-time Director of PhonePe Private Limited) and PhonePe Private Limited, filed a writ petition under Articles 226 and 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (CrPC), challenging an order dated 23-12-2021 passed by the I Additional Chief Metropolitan Magistrate, Bengaluru, in Crime No.256 of 2021. The impugned order directed the reversal of an amount transferred from the personal account of the first petitioner to the account of the second respondent (Ms. Madhuri R.K.). The background involves a cyber fraud where the second respondent allegedly lost money due to fraudulent transactions, and the amount in question was traced to the first petitioner's account. The Magistrate, without proper jurisdiction, ordered the bank to reverse the transfer. The petitioners contended that the order was without jurisdiction and that the proper remedy was for the investigating agency to seek appropriate orders. The High Court, after hearing arguments, held that the Magistrate's order was patently illegal and without jurisdiction, as the power under Section 451 CrPC does not extend to directing reversal of bank transfers. The court quashed the impugned order and directed the investigating agency to proceed in accordance with law.
Headnote
A) Criminal Procedure Code - Section 482 - Inherent Powers - Quashing of Interlocutory Orders - The High Court can exercise inherent powers under Section 482 CrPC to prevent abuse of process of court, even against interlocutory orders, if the order is patently illegal or without jurisdiction. (Para 4) B) Criminal Procedure Code - Section 451 - Interim Custody of Property - Property Subject to Speedy Destruction - The Magistrate's power under Section 451 CrPC to pass orders regarding custody of property does not extend to directing reversal of bank transfers, as such transfers are not 'property' subject to speedy destruction or decay. (Para 5) C) Cyber Fraud - Reversal of Fund Transfer - Jurisdiction of Magistrate - A Magistrate cannot direct a bank to reverse a fund transfer from one account to another in a cyber fraud case, as the proper remedy is for the investigating agency to seek appropriate orders from a competent court under the relevant provisions of the Code of Criminal Procedure, 1973. (Para 6)
Issue of Consideration
Whether the Magistrate's order directing reversal of funds transferred from the petitioner's account to the complainant's account is sustainable in law, and whether the High Court can interfere with such an order under Section 482 CrPC.
Final Decision
The High Court allowed the writ petition, quashed the impugned order dated 23-12-2021 passed by the I Additional Chief Metropolitan Magistrate, Bengaluru, in Crime No.256/2021, and directed the investigating agency to proceed in accordance with law.
Law Points
- Section 482 CrPC
- inherent powers
- quashing of interlocutory orders
- cyber fraud
- reversal of fund transfer
- jurisdiction of Magistrate under Section 451 CrPC
- property subject to speedy destruction
- interim custody of property
