Sunday 15 September 2024

Madras HC: Police cannot freeze an entire bank account; only quantum of money involved in financial fraud can be frozen, since it would amount to depriving the account holder of his/her right to livelihood

As far as the present case in hand, though the intimation fromthe Cyber Crime Bureau, Telangana, indicates that suspected money in the account of the petitioner is only a tune of Rs. 2,48,835/-, due to the blanket order to freeze the account, the fifth respondent Bank has freezed the account in its entirety. Therefore, the petitioner herein is unable to operate his account and deal with the money lying in his account. {Para 7}

8. Under the guise of investigation, order freezing the entire

account without quantifying the amount and period cannot be passed. Such order will be construed as violation of the fundamental rights of trade and business as well as violation of livelihood. Therefore, it is appropriate to direct the fifth respondent to de-freeze the account and kept a lien over a sum of Rs.2,50,000/-. The petitioner herein is permitted to operate his account, subject to the condition that he shall ensure, the account shall always have a minimum of Rs. 2,50,000/-.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

W.P.No.25631 of 2024

Mohammed Saifullah Vs  Reserve Bank of India,

CORAM: DR.JUSTICE G.JAYACHANDRAN

DATED :10.09.2024


The issue by 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. 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 lifeline of the business gets severed by such unilateral orders of account

freezing passed by the Police.

2. 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. Even then, day in and day out, this Court

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.

3. This is a case where the petitioner who is suspected to be dealing

with cryptocurrency, the case is under investigation by the Cyber Crime

Bureau of Cyberabad, Telangana, registered on 16.05.2023. The fifth

respondent Bank has been instructed to freeze the account of the

petitioner herein. The communication received by the Bank indicates that

around Rs.2,48,835/- is the suspected money involved in the subject

matter of the crime under investigation. Meticulously, in reference to the

instructions received from National Cyber Crime Reporting Portal and

the notice from the Telugana Cyber Crime Bureau, the fifth respondent

has freezed the account.

4. In the said account of the petitioner a sum of Rs.9,69,580/-

stands as balance. Even after lapse of more than a year neither the

Investigating Agency nor the Bank had informed the petitioner as to why

the account is freezed and how long the account will be kept under

freeze. In the said circumstances, the petitioner is before this Court

seeking for Mandamus to release the entire amount in his account by

ordering de-freezing of the account.


5. When similar issues came up for consideration in Crl. OP

No.10569 of 2021 vide order dated 18.06.2021, the learned Judge of his

Court, directed the Commissioner of Police, Vepery, Greater Chennai, to

give necessary instructions and directions to his personnel in conducting

investigation in cases were freezing of account is required and ensure that

there is no colourable exercise of power. Accordingly, the Commissioner

of Police, Greater Chennai, Vepery, vide Circular Memorandum dated

24.06.2021, has issued a directional instructions to all the Deputy

Commissioners of Police in District and CCB, CWC to ensure that there

is no deviation of the instructions. It is appropriate to reproduce the

circular.


6. Unfortunately, in most of the cases the guidelines issued in this

Circular not observed. Later when an identical issue came up for

consideration before this Court in WP No.13509 of 2024 considering the dictum laid down by the Hon’ble Supreme Court in M.T.Enrica Lexie and another –vs- Doramma and others reported in

MANU/SC/0409/2012, Teesta Atul Setalvad and others –vs- The State of Gujarat and others, reported in (2018) 2 SCC 372 and Shento Varghese –vs- Julfikar Husen and others, reported in 2024 SCC Online SC 895, directed the petitioner/account holder to execute a bond undertaking to deposit the amount in case the money found in his account is a tainted money and liable to be forfeited.

7. As far as the present case in hand, though the intimation fromthe Cyber Crime Bureau, Telangana, indicates that suspected money in the account of the petitioner is only a tune of Rs. 2,48,835/-, due to the blanket order to freeze the account, the fifth respondent Bank has freezed the account in its entirety. Therefore, the petitioner herein is unable to operate his account and deal with the money lying in his account.

8. Under the guise of investigation, order freezing the entire

account without quantifying the amount and period cannot be passed.

Such order will be construed as violation of the fundamental rights of

trade and business as well as violation of livelihood. Therefore, it is

appropriate to direct the fifth respondent to de-freeze the account and

kept a lien over a sum of Rs.2,50,000/-. The petitioner herein is

permitted to operate his account, subject to the condition that he shall

ensure, the account shall always have a minimum of Rs. 2,50,000/-.

9. With the above directions, this Writ Petition is disposed of.

There shall be no order as to costs.

10.09.2024


Print Page

No comments:

Post a Comment