1. Rule. Rule made returnable forthwith. By consent of rival parties, heard finally at the admission stage alongwith all the criminal applications.
2. The petitioner i.e. Smartpaddle Technology Private Limited under trade name 'Bizongo' has filed Criminal Writ Petition No. 393 of 2026 for challenging notice dated 06.03.2026 issued by respondent Nos.2 and 3 namely Deputy Superintendent of Police and Assistant Police Inspector, Economic Offences Wing, Chhatrapati Sambhajinagar (Rural) under Section 94 of Bharatiya Nagarik Suraksha Sanhita, 2023 (for short "BNSS"), whereby respondent No.4 HDFC Bank, Fort Branch, Mumbai is directed to place a lien of Rupees Fifteen Crore on the petitioner's primary operating current account No.57500000909849 pursuant to F.I.R. No.387/2025 registered with Shillegaon Police Station, Chhatrapati Sambhajinagar (Rural) on the basis of complaint filed by one Charushila Daulatrao Patil being an investor on TradeCred platform. Similarly, in Criminal Writ Petition No.624 of 2026 a similar notice under Section 168 of BNSS is under challenge, issued for placing lien of Rs.11,87,23,145/-on the Account No.041563700002630 of the petitioner.
3. Though the aforesaid notices issued by respondent Nos.2 and 3 are appearing similar in nature, but since the respondents Police Officers admitted in their affidavit-in-reply that under notice dated 06.03.2026 issued under Section 94 of BNSS no lien can be placed, and therefore, notice dated 04.05.2026 under appropriate Section 168 of BNSS has been issued by respondent No.3.
4. The background facts are as under :
The petitioner is a Private Limited Company involved in business of uploading unpaid invoices to the investors at discounted rate through TradeCred platform and as and when the invoices attain majority, the petitioner collects payments from it's corporate customers and transfers it to the accounts controlled by TradeCred. However, one F.I.R. dated 19.09.2025 was registered in Shillegaon Police Station, Chhatrapati Sambhajinagar (Rural) by one Charushila Daulatrao Patil by mentioning that she alongwith her relatives had invested an amount of Rs.48,94,172/- with the petitioner through TradeCred platform, but the aforesaid investment was not refunded to her, as assured. In view of the same, respondent No.3 issued earlier notice dated 06.03.2026 under Section 94 of BNSS and thereby created lien of Rupees Fifteen Crore on the bank account of petitioner, as mentioned above. Thereafter second notice dated 04.05.2026 under Section 168 of BNSS was again issued by respondent No.3, by creating lien on the bank account of the petitioner, as mentioned therein.
5. Learned senior counsel Mr. V.D. Sapkal for the petitioner strongly submits that Section 94 of BNSS does not empower freezing of bank accounts or creation of liens, but it merely relates to production of documents. However, respondent Nos.2 and 3 under their reply have already admitted that they had quoted wrong section by admitting that Section 94 of BNSS does not deal with freezing of accounts or creation of liens, and therefore, they issued subsequent notice under Section 168 of BNSS. Learned senior counsel also demonstrated as to how Section 168 of BNSS is also not proper section for freezing bank accounts or creation of liens. According to him, statutory scheme for seizure/attachment of the property involved in the Crime is under Sections 106 and 107 of BNSS, which also requires compliance with defined safeguards and recourse to a Magistrate. Shortly, according to him, even the said procedure is also by-passed by the respondents for creating lien on the bank accounts of the petitioner. He points out that action of freezing the accounts of petitioner is without taking recourse to the concerned Magistrate and only for the alleged investment of complainant around Rs. 49,00,000/-, an amount of Rupees Fifteen Crore of the petitioner has been immobilized without disclosing any nexus of it to the alleged amount of fraud.
6. Learned senior counsel Mr. Sapkal further demonstrated that the petitioner is not involved in any type of cheating and it had no direct dealing with complainant Charushila Patil or other investors of TradeCred. He pointed out that the investors or the complainant had all transactions exclusively with TradeCred and Bizongo had no privity of contract with any of the investors or the complainant. He further submitted that in fact the petitioner had already overpaid the TradeCred, who had directly collected deposits from the complainant or investors and only to avoid payments to it's creditors, the TradeCred has set up false narrative that the petitioner has in fact defrauded the investors. He points out that even several police agencies namely Economic Offences Wing, Thane, Kalyan Taluka Police, Sonipat City Police had also examined similar complaints against the petitioner and ultimately closed those complaints holding that the dispute was of civil in nature. According to him, the bank statements and reconciliation of transactions clearly indicate that the petitioner received amount of Rs.1309.69 Crore on TradeCred platform, but they paid back amount of Rs.1349.55 Crore, that means Rs. 39.86 Crore more amount. Thus, he ultimately submits that the impugned notices are ultra vires, dis-proportionate and violative of Articles 14 and 19 (1) (g) of the Constitution of India and the action taken thereon is without any notice of hearing to the petitioner. Ultimately the learned senior counsel for the petitioner requested to lift the lien from the bank accounts of the petitioner company. In the alternative he suggested that lien be restricted only to the extent of alleged amount of fraud to the tune of Rs. 48,94,172/-. In support of his submissions, he placed reliance on the following judgments.
(i) Various orders of Hon'ble Apex Court in Suo Moto Writ Petition (Criminal) No.3 of 2025.
(ii) Shashikant Bhurya Kokani vs State of Maharashtra and others; 2015 Al.M.R. (Cri.) 2208
(iii) Rai Udyog Limited vs State of Maharashtra and others; 2022 All. M.R. (Cri.) 2936
(iv) Kamran Ishtiyak Ahmed Khan and others vs State of Maharashtra and others; 2023 DGLS (Bom.) 3855
(v) Dharamsingh Ramsingh Bayas vs State of Maharashtra 2024 DGLS (Bom.) 4593
(vi) Order of Allahabad High Court in case of M/s Ibrahim Trading Company vs The State of U.P.
7. On the contrary, learned A.P.P. by filing reply of respondent No.3, strongly opposed the submissions made on behalf of the petitioner company. According to him, notice dated 06.03.2026 was in fact issued under Sections 94 of and 168 of BNSS, but inadvertently Section 168 was not mentioned due to typing mistake, however, in the subsequent notice it is already mentioned. According to the learned APP, the petitioner's entire activity is illegal and without obtaining any permission from Securities and Exchange Board of India (SEBI) for accepting investment from the investors. He further submits that though F.I.R. No. 387/2025 was registered by Charushila Pail for the amount around Rs. 49,00,000/-, but during investigation it was transpired that huge amounts were received by the petitioner and despite issuance of notice under Section 35(3) of BNSS, the petitioner did not co-operate. Various victims have given statements during the investigation and approximately 20 witnesses have come forward and more than 700 persons are likely to be cheated. Learned A.P.P. points out that the total amount involved in this scam exceeds Rupees Sixty Nine Crores. The TradeCred, who is made co-accused, has given statement that the petitioner company is directly involved in siphoning of the amount of fraud and the said platform is still open, and therefore, there is every possibility that more investors may invest in this lucrative scheme floated by the petitioner company. Therefore, the learned A.P.P. submits that action under Section 168 of BNSS was required for preventing further siphoning of the amount at the hands of petitioner and thus the preventive action by setting up lien on the bank accounts of petitioner company, has been taken. As such,he justified the action of respondent Nos.2 and 3 and prayed for dismissal of the petitions. Learned A.P.P. also relied on the following judgments.
(i) N. Mani vs Sangeetha Theatre and others ; (2004) 2 Supreme Court Cases 278
(ii) Sujit Kumar Roy (Dr.) vs Union of India and others; 2009 DGLS (Cal.) 506
8. On the other hand, the investors have filed various intervention applications namely Criminal Application Nos.2333/2026, 1761/2026, 1732/2026 and 1541/2026. According to them, the petitioner has systematically defrauded the investors and collected huge amounts in crores using TradeCred platform. According to them, one of the depositors i.e. Charushila Patil has filed F.I.R. No.387/2025 wherein the Investigating Officer has recorded statements of various depositors confirming the fraud. They falsified the statement made on behalf of the petitioner that there was no direct debtor-creditor relationship between it and depositors. According to them, the petitioner is equally involved in the said fraud by posing it as an "obligor" in all transactions of investments by the depositors. We would like to quote here the submissions made by learned senior counsel Mr. Rajendraa Deshmukh in Criminal Application No. 1541/2026. According to him, the petitioner not only suppressed the material facts, but also misled this Court by producing fabricated documents. He further submits that Clause-38 of the Master Sale Agreement, which is at page No.58 of the Criminal Writ Petition No.393 of 2026, clearly states that TradeCred is merely an Administrator and not responsible for any liability or payment to the investors. Actually the said liability of refunding amounts to the investors rests only on Bizongo i.e. the trading name of petitioner. Admittedly, Clause-38 of the aforesaid Master Sale Agreement also indicates that all collections by the petitioner are held in trust for the depositors. He further points out that in fact an independent audit report dated 13.10.2025, which confirms fraud of Rs. 209.99 Million, also indicates double discounting i.e. financing the same invoices from multiple institutions. As such, he contends that the petitioner even filed false bills to extract money from the depositors. He further pointed out that for 18 individuals across the India, including States of Maharashtra, Karnataka, Delhi and Gujrat, the fraud committed by the petitioner exceeds Rs. 6.22 Crores. Therefore learned senior Counsel Mr. Deshmukh submits that considering the gravity of the allegations and fraud committed by the petitioner, there is no reason for de-freezing it's bank accounts, otherwise the fraudulent act of the petitioner will be continued. Accordingly, he prayed for dismissal of both the criminal writ petitions.
9. Respective learned counsel for the other applicants / intervenors also argued supporting the arguments advanced by the learned senior counsel Mr. Deshmukh by pointing out certain documents as to how the petitioner filed fabricated documents to show that there was no direct connection between itself and depositors, but it was only the co-accused TradeCred, who is liable for the amounts invested by them. The learned senior counsel and other respective counsel for the intervenors have relied upon the following judgments.
(i) Ashaben Subhashbhai Shinde vs State; AIR Online 2022 KAR 1035
(ii) Silicon Union and another vs State of U.P. and others; 2021 SCC OnLine All 653
(ii) Judgment of Hon'ble Apex Court in the case of Jagjeet Singh and others vs Ashish Mishra @ Monu and another in Criminal Appeal No.632 of 2022
10. Heard rival submissions and also perused the entire material placed on record by the petitioner as well as investors/intervenors.
11. It is the main contention of the learned senior counsel Mr. V.D. Sapkal that the petitioner under his trade name "Bizongo" had no direct connection with the investors, but the petitioner had only used platform of TradeCred, who is also a co-accused, for selling unpaid invoices to get the money earlier. According to him, the TradeCred had in fact lured the investors for putting their money to purchase invoices in anticipation of earning returns at the rate of 11 to 16% thereof. He further submits that the TradeCred had in fact collected all the money from the investors and used to give it to Bizongo. Bizongo had genuine unpaid bills from it's own customers which were displayed on the platform of TradeCred to get early payment. Thus, as and when Bizongo used to get the amount of unpaid bills from it's own customers in due course, they used to transfer the same into the account of TradeCred. Thus, according to the learned senior counsel Mr. Sapkal, the petitioner never involved in direct business with the investors and there was no privity of contract between the petitioner and investors/depositors. For that purpose, he relied on certain documents of Offer for Sale and submitted that there was deal between the TradeCred and investors only and the petitioner was not concerned with the same.
12. However, the said argument advanced by learned senior counsel Mr. Sapkal has been countered by the learned A.P.P. as well as learned senior counsel Mr. Rajendra Deshmukh for the investors/intervenors, by pointing out that those documents of Offer for Sale wherein no signature of the representative of petitioner is apparent, are the fabricated documents. On the contrary, learned senior counsel Mr. Deshmukh placed on record the same documents of Offer for Sale with e-signature of the Authorized Officer of the petitioner. On comparing both the documents, it is clearly evident that the documents are same, but on the documents filed by the petitioner no e-signature of the representative of petitioner is appearing, but on the contrary the same documents placed on record by the investors indicate e-signature of the Authorized Officer of the petitioner. As such, fabrication of the documents by masking e-signature of the Authorized Officer of the petitioner at the hands of petitioner, clearly indicates suppression of material facts.
13. Further, the Resolution dated 12.03.2021 passed by the petitioner clearly indicates that it was passed for availing sale/assignment of receivable facility from the buyers. Moreover, term sheet dated 07.09.2022 placed on record by the investors clearly defines TradeCred as pure intermediary and in fact there was tri-party agreement between the investors, TradeCred and the petitioner about investments The resolution dated 21.02.2024 passed by the petitioner indicates that they had authorized Tarun Soni, Ankur Bhandari and Janhavi Pavaskar to sign the agreements with the investors. Moreover, invoices assigned to the intervenors clearly indicate that the aforesaid Authorized Officer of the petitioner had assigned specific invoices to specific buyers. In addition to that, double discounting of the invoices has also come on record by way of audit report during the investigation of crime. Moreover, four settlement offers sent by the petitioner definitely constitutes its admission of liability towards buyer. Therefore, considering all these documents and suppression of documents at the hands of petitioner, falsity in the submissions of learned senior counsel Mr. Sapkal for the petitioner that the petitioner was not having any direct transaction with the investors, is apparently there on record.
14. Admittedly, under Section 94 of BNSS, Investigating Officer has no power to freeze the bank accounts. However, initially notice under Section 94 of BNSS was issued and thereby Investigating Officer had freezed the bank account of petitioner maintained with HDFC Bank. However, the Investigating Officer through his reply pointed out that it should have been Section 168 instead of Section 94 of BNSS, and therefore, issued notice dated 04.05.2026 and freezed the bank account of the petitioner with YES Bank. However, it is the contention of the learned senior counsel Mr. Sapkal that even under Section 168 of BNSS also, the Investigating Officer cannot freeze the bank accounts of the petitioner. For that purpose he relied on the judgment in the case of Shashikant Bhurya Kokani vs State of Maharashtra as well as Rai Udyog Limited vs State of Maharashtra (supra), wherein this Court has held that, Section 149 of the Code of Criminal Procedure empowers every Police Officer to interpose for purpose of preventing and, to the best of his ability, prevent commission of any cognizable offence. However, Section 149 of Cr.P.C. which is pari materia with Section 168 of BNSS, indicates that, to interpose for the purpose of preventing cognizable offence, he can take appropriate steps in that regard, but the said section does not vest Police Officer the jurisdiction to issue blanket order of injunction prohibiting any party. Learned senior counsel Mr. Sapkal contended that, instead of freezing the accounts, he should have kept lien of defrauded amount of Rs. 48,00,000/- as per the complaint filed by Charushila Patil. He also relied on the judgment in the case of M/s Ibrahim Trading Company vs The State of U.P. (supra), wherein it is observed that, all the Police Officers are expected to understand to have knowledge of Sections 102, 149 and 172 of Cr.P.C. and all the formalities therein has to be carried out before freezing the accounts in question. As such, the learned senior counsel Mr. Sapkal submits that there was no occasion to Investigating Officer to invoke Section 168 of BNSS for freezing the bank accounts of the petitioner.
15. This argument is countered by the learned APP, who relied on the observation of the Hon'ble Apex Court in the case of N.Mani vs Sangeetha Theater (supra), wherein it is observed as follows :
"It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not speciftcally referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law".
Further, the learned A.P.P. also relied on the judgment of Calcultta High Court in the case of Sujit Kumar Roy vs Union of India (supra), wherein it is observed that, mere reference made to the wrong provision in the notice does not make the notice bad. for that purpose the Calcutta High Court had relied on the observation of the Hon'ble Apex Court in the case of M.T. Khan Vs Government of U.P.; (2004) 2 S.C.C. 267, wherein it is held as follows :
"It is now well settled principle of law that non mentioning or wrong mentioning of a provision of law does not invalidate an order in the event it is found that a power therefore exists".
By quoting the aforesaid observation, learned A.P.P. submits that the petitioner himself has argued that instead of issuing notice under Sections 94 and 168 of BNSS, a recourse to Sections 106 and 107 should have been taken by the Investigating Officer. Thus, he submits that indirectly the petitioner has admitted that such power for freezing the accounts by using those sections still exists with the Investigating Officer, and therefore, even though the freezing of accounts of the petitioner is done under notices issued by mentioning wrong provisions of law, but considering the power to freeze the accounts under Sections 106 and 107 of BNSS, such action on the part of Investigating Officer, cannot be condemned.
16. On the other hand, respective learned counsel for the investors/intervenors also relied on the observation of the Hon'ble Apex Court in the case of Silicon Union vs State of U.P. (supra), wherein it is held that, Section 102 of Cr.P.C. empowers the Investigating Officer to freeze the bank account by holding it as a property within the meaning of that section. Therefore, considering all these submissions, we are of the opinion that even though the notices impugned are used for freezing the bank accounts of the petitioner by quoting wrong sections, but considering the nature of offence and modus operandi used for that by the petitioner, the power of freezing the accounts still remains with the Investigating Officer.
17. Thus, on the basis of all these facts mentioned above, it has been revealed that the petitioner is equally involved in the crime of defrauding investors by avoiding to return their investments. Though there are certain offences registered against the petitioner at Thane, Kalyan and Sonipat in Haryana wherein the complaints against the petitioner were closed by the concerned Police Officers, but the learned APP, during the course of argument on instructions from the Investigating Officer, disclosed that so many investors are cheated by the petitioners by refusing to return their investments and offences against the authorised persons of the petitioner namely Tarun Soni, Janhavi Pavaskar, etc. are registered at various places. Learned A.P.P. expressed doubt that the scope of offence committed by the petitioner is definitely more than that as is at present and there may be scam involving thousands of crores at the hands of petitioner. It has also come on record that TradeCred platform is still active and so many investors are likely to invest their hard earned money falling prey to the petitioner and as such to restrict the siphoning of amount of investors at the hands of petitioner, the learned A.P.P. justifies the action of freezing of bank accounts of the petitioner. Therefore, action taken by the Investigating Officer, though by quoting wrong sections under the impugned notices, appears justified in the larger interest. Hence, we are not inclined to grant relief to the petitioner in the given circumstances. Accordingly, Criminal Writ Petition No. 393 of 2026 and Criminal Writ Petition No.624 of 2026 stand dismissed. Since both the main writ petitions are dismissed, the pending Criminal Applications for intervention also stand disposed of.
