Freezing Bank Account Without Prima Facie Link To Offence Violates Right To Life, Trade: Rajasthan High Court
Rajasthan High Court held that freezing of a citizen's account without any cogent reason or establishing even a prima facie nexus of such account with the offence, amounted to grave and unwarranted intrusion that violated fundamental rights under Article 21 and 19 (1) (g). The bench of observed that the statutory power of investigating agencies to request the bank to freeze the account, could...
Rajasthan High Court held that freezing of a citizen's account without any cogent reason or establishing even a prima facie nexus of such account with the offence, amounted to grave and unwarranted intrusion that violated fundamental rights under Article 21 and 19 (1) (g).
The bench of observed that the statutory power of investigating agencies to request the bank to freeze the account, could not be exercised perpetually without intimating the account holder about the reason for such freezing as well as the extent for which it has been frozen.
“The power to interdict the operation of a bank account is an exceptional one, to be exercised sparingly, with circumspection and strictly in accordance with law, and only upon recording reasons demonstrating a live and proximate link between the account and the alleged criminal activity. Any freezing order passed dehors such safeguards betrays a colourable exercise of power, is manifestly arbitrary, and cannot be sustained in the eyes of law.”
The Court was hearing a petition by a person whose bank account was frozen owing to some alleged fraudulent transactions, seeking its de-freezing.
After hearing the contentions and making the above-mentioned observations, the Court held that under the guise of investigation, order of freezing the entire account, without qualifying the amount and period, was violative of the fundamental rights, as it caused great hardship to day to day financial life after severing the very life-line of business.
The Court stated that in the present matter, only the disputed amount could be kept on hold, while the blanket freeze on the account had to be lifted.
The bank was directed to ensure that only the debit operations to the extent of disputed amount shall remain interdicted, and the superintendent of police was directed to ensure that the account was de-freezed to the remaining extent.
Accordingly, the petition was disposed of.
Title: Vinit Kumar Adiwal v State of Rajasthan & Ors
Citation: 2026 LiveLaw (Raj) 90