Freezing Bank Account Without Proving Account Holder's Involvement In Criminal Case Adversely Affects Fundamental Rights: Gujarat High Court
Directing the de-freezing of a man's bank account, the Gujarat High Court observed that while investigating agency has power to direct freezing, however without specifying the quantum of suspected amount or without establishing involvement of the account holder in any criminal activity, results in adversely affecting his fundamental rights.
The court was hearing a man's plea seeking de-freezing of his bank account over a cyber crime complaint pertaining to alleged suspicious transaction of Rs. 1100; in the interim the petitioner had sought a direction to the bank to permit him to operate the account by keeping only the disputed amount of 1,100/- on hold.
Justice Niral R Mehta said:
"It appears that during the course of investigation in certain cyber crime complaints, it has transpired that certain amounts have been transferred through various bank accounts and the account of the present applicant has been reflected in the transaction trail. The material on record indicates that the alleged suspicious transactions in the present case are limited to 500/- and 600/-, aggregating to 1,100/-. However, on ₹ ₹ ₹ account of such limited transactions, the entire bank account of the applicant has been debit-freezed, thereby restricting access not only to the alleged amount but also to the applicant's legitimate earnings and savings.
The power of the investigating agency to direct freezing of bank accounts during the course of investigation cannot be disputed. However, such power is required to be exercised in a reasonable, proportionate and lawful manner. The freezing of an entire bank account without specifying the quantum of suspected amount or without establishing the involvement of the account holder in any criminal activity results in undue hardship and adversely affects the fundamental rights of the citizen".
The petitioner said that the account was his primary account which he used for salary, household expenses, rent, EMIs and other day-to-day financial transactions. The account came to be debit- frozen by respondent No.3 bank pursuant to communications received from cyber crime authorities in connection with certain complaints. The applicant submits that he has no involvement whatsoever in any alleged cyber crime and is neither named as an accused nor as a suspect in any proceedings.
It was submitted that the account has been freezed merely, on account of two small credit transactions of Rs. 500 and Rs.600, totaling 1,100. Despite repeated representations made by the applicant, no detailed reasons or documents have been supplied to him and the entire bank account has been frozen, thereby preventing him from accessing his lawful earnings.
The court said that the applicant was not shown to be an accused in any criminal proceedings and the alleged suspicious amount is quantified at Rs.1,100 only.
"Freezing of the entire account, including the applicant's salary and lawful deposits, is disproportionate and results in serious prejudice affecting his right to livelihood and dignity guaranteed under Article 21 of the Constitution of India. This Court is therefore of the considered opinion that the ends of justice would be met if the respondent authorities are directed to restrict the freeze only to the extent of the disputed amount and permit the applicant to operate the remaining balance in the account," the court said.
The court directed the bank to de-freeze the bank account and said that the petitioner shall be permitted to operate the account fully, except to the extent of the amount of Rs. 1100 which is subject matter of investigation.
"The respondent bank shall mark a lien to the extent of ₹1,100/- ( ₹500/- + ₹600/-) in the said account, which shall remain subject to the outcome of the investigation in connection with Acknowledgment Nos. 31609250128406 and 32909250054174," the court directed. It clarified that the order shall not be construed as an expression on the merits of the investigation
The plea was allowed.
Case title: ARJUN KURUVEETIL PEETHAMBARAN v/s THE POLICE INSPECTOR & ORS