Order Freezing Entire Bank Account Without Quantifying Amount & Period Cannot Be Passed: Madras HC

The Court said that such order will be construed as violation of the fundamental rights of trade and business as well as violation of livelihood.

The Court was hearing a Writ Petition seeking a Writ of Mandamus, directing respondent Bank to release the entire amount by de-freezing the account of the Petitioner.

The bench of Justice G. Jayachandran observed, “Under the guise of investigation, order freezing the entire account without quantifying the amount and period cannot be passed.”

Advocate Kably Taiyab Khan appeared for the Appellant and Government Advocate S. Udayakumar appeared for the Respondent.

Brief Facts-

The Petitioner is under investigation by the Cyber Crime Bureau of Cyberabad for suspected involvement in cryptocurrency dealings. Following instructions from the National Cyber Crime Reporting Portal and the Cyber Crime Bureau, the fifth respondent Bank froze the Petitioner's account, suspecting Rs. 2.48L as crime-related funds. The account holds a balance of Rs. 9.69L but over a year has passed without any communication from the Investigating Agency or the Bank regarding the freeze or its duration. Hence, the present Writ Petition.

While noting that the issue many of the citizens currently face is the freezing of the account on instruction from the local Police or from the National Cyber Crime Reporting Portal the Court observed, “Many a times, the account holders have been taken into surprise that by such order of freezing, before they could realize as to why and for what purpose the accounts are freezed, enough damages are caused to their day to day financial life, since the very life- line of the business gets severed by such unilateral orders of account freezing passed by the Police.”

The Court observed, “No doubt, the statutes empower the investigation agency to request the Bank to freeze the account pending investigation and intimate it forthwith to the jurisdiction Court, but whether the power is properly exercised or not is the moot question now looming large and in the several judgments of the Courts across the India, it had been categorically held that there cannot be freezing of account perpectually without intimating the account holders what for their account is freezed and what extent it has to be freezed.”

The Court however, said that day in and day out, it receives applications to defreeze the account pointing out the failure of the investigating agency not only to the account holders, even to the jurisdictional Court not intimating about the freezing of the account as per Section 102 of Cr.P.C. equivalent to 106 of BNSS Act.

Accordingly, the Court directed the fifth respondent to de-freeze the account and keep a lien over a sum of Rs. 2.5L. The Court also permitted the petitioner to operate his account, subject to the condition that he shall ensure, the account shall always have a minimum of Rs. 2.5L.

Finally, the Court disposed of the Writ Petition.

Cause Title: Mohammed Saifullah v. Reserve Bank of India 

Appearance:

Appellant: Adv. Kably Taiyab Khan

Respondent: Government Advocate S. Udayakumar and Adv. C. Mohan 

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