Alibaba.com moves Bombay High Court against account freezing in cheating case

Alibaba.com has approached the Bombay High Court against the freezing of its bank accounts with the Hongkong Shanghai Banking Corporation (HSBC) by Maharashtra Police allegedly under the pretext of investigation into a cheating case [Alibaba.com eCommerce India Pvt. Ltd. v. State of Maharashtra]..The plea filed through law firm Cyril Amarchand Mangaldas stated that through a notice under Section 91 of the Code of Criminal Procedure, the company's bank proceeded to freeze the petitioner's bank account under the pretext of investigation into the first information report (FIR) lodged for cheating case. It claimed that the police acted without application of mind as Alibaba had no business relationship with the offending entity, Alibaba Cloud India LLP.In the FIR, the police has alleged that one of the business entities of Alibaba.com namely Alibaba Cloud India LLP, was hosting a download link for a mobile application which was purportedly being used for cheating persons.The FIR, which was being investigated, was filed based on allegations by an individual who claimed that after being allured by attractive returns, a payment of ₹65,000 was made to the application.However, the app shut down mid-way and the person with whom the complainant was coordinating, could not be reached.Three months after the FIR, the police sent a notice under Section 91 to HSBC for freezing of accounts, which was challenged by the company.As per the freezing notice, HSBC was directed to debit freeze the current accounts of Alibaba.com.Alibaba.com also apprehended issuance of a letter to freeze another of its accounts in another bank - Citibank India. In the interim, Alibaba.com has requested restoration of the operation of the frozen account..The plea stated that the police did not have powers to take such action of freezing bank account. The company allegedly did not received any summons or notice requiring them to co-operate or remain present a part of any investigation or inquiry. Further, no response or rationale was explained behind freezing of the bank account. Alibaba claimed that it was not an accused nor in any manner party to the allegations being investigated under the FIR, hence the action was ex-facie unlawful. Alibaba stated that despite Alibaba.com not being connected to the offence under FIR, in any manner whatsoever, the police has proceeded merely on the suspicion that one of the Alibaba related entities hosted its mobile application.Alibaba.com did not have any business relationship with Alibaba Cloud India and the police issued notices to entities of Alibaba Group without any application of mind.