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2008 Supreme(AP) 228
Andhra Pradesh High Court
P.S. NARAYANA, J.
PACL India Ltd., Regional Office, Hyderabad - Appellant
Versus
AXIS Bank, Ahmedabad and others - Respondents
W.P. No. 21293 of 2007
Decided on 27-03-2008.
Mr. B. Ashok, Senior Counsel and Mr. Harsha Vardhan Reddy Beeram, Counsel for the Petitioner.
Mr. S. Ashok Anand Kumar, Counsel for Respondent Nos.1 to 6.
Mr. V. Amar Kumar, Counsel for Respondent Nos.? and 8.
Mr. M. Narender Reddy, Counsel for Respondent No.9.
Govt. Pleader for Home for Respondent Nos.10 and 11.
Headnote:
Financial Establishments Act, 1999 –Sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 – Criminal Procedure Code, 1973 – Regulations, 1999 – Protection of Depositors – Section 420, 406 –Writ Order or direction declaring the action of the respondents 2 to 9 in freezing the accounts of petitioner company basing on the letter of the 10th respondent as illegal arbitrary, ultravirous, mala fide and against the principles of natural justice and pass suitable orders learned Senior Counsel representing Writ Petitioner had taken this Court through the contents of the affidavit filed in support of the Writ Petition, the respective stands taken in the counter affidavits also provisions of A.P. Protection of Depositors of Financial Establishments Act, 1999 and also A.P. Protection of Depositors of Financial Establishments Rules, 1999 and would maintain that in light of facts and circumstances, the freezing of accounts of the writ petitioner cannot be sustained ingredients of Section 3 of Act are not satisfied at all Learned senior counsel also had taken this Court through Sections 2 3, 4, 5 and 6 of the Act as well and further made elaborate submissions pointing out order made by a competent Criminal Court in this regard and would maintain that in the light of the same, the action of the institutions in taking a stand that they are just following directions of police to freeze accounts in exercise of the powers, which in fact had been exercised by the police, under Section 102 of Code of Criminal Procedure, 1973, definitely cannot be sustained learned senior counsel also would contend that dt any rate this is just abuse of process of law and no ad interim order had been made and no further progress in the investigation at least had been made and in a way the action taken at this juncture cannot be sustained – Held, In light of language employed in Section 13 of Act, and 31so in light of Sections 4, 91 and 102 of Code of Criminal Procedure elaborate submissions were made in relation to power to issue such directions and also action relating to freezing of accounts of petitioner – On a careful reading of material available on record it is not in serious controversy that already an order was made by a Competent Criminal Court, and this Court need not further elaborate same since relevant portion of order had already been specified supra – On a careful reading of Section 3 of Act, this Court is also of opinion that ingredients are not prima satisfied – Even otherwise in present Writ Petition criminal proceedings as such are not being challenged and hence, these aspects need not be gone into any further. Certain submissions were made that the action had I been initiated not only on the strength of provisions of Act only but also in addition thereto in relation to offences even under the Indian Penal Code – When a competent Criminal Court had already expressed an opinion in light of alleged directions issued by the concerned police banking institutions are not justified in freezing accounts – This Court is expressing this opinion especially in light of insufficient material on strength of which very action had been initiated – This Court is not inclined to express or touch upon merits or demerits relating to allegations made as against petitioner Company, only on one complaint –Writ Petition is hereby allowed
This Court issued Rule Nisi on 3.12.2007.
2. PACL India Limited, the petitioner, filed the present Writ Petition praying for issuance of an appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus declaring the action •of the respondents 2 to 9 in freezing the accounts of the petitioner company basing on the letter of the 10th respondent dated 21.8.2007 as illegal arbitrary, ultravirous, mala fide and against the principles of natural justice and pass suitable orders.
3. 11th respondent-the Sub-Divisional Police Officer, Vikarabad, Ranga Reddy District addressed letters to the concerned following institutions as R1 to R9, and the letter dated 21.8.2007 addressed to Punjab National Bank, M.G. Road, Secunderabad-R7 reads as under:
"Government of Andhra Pradesh (Police Department)
From
P. Venkateshwara Rao
Sub-Divisional Police Officer
Vikarabad Sub-Division
To
The Branch Manager Punjab National Bank Secunderabad Branch Sir,
Sub: Investigation of Criminal Case-Please furnish the upto date Bank statement and freezing the collection accounts of PACL INDIA LlMITEDSecunderabad Branch-Regarding.
Ref: Account No. 3631002100011615 of PACL INDIA LIMITED of Secunderabad Branch.
***
I, invite your attention with reference to the above cited subject, there are complaints against PACL INDIA LIMITED and in this regard a case was registered and investigation and enquires are being done. There is lot of public money is involved in these transactions. Hence, it is requested to freeze the Bank Accounts of PACL INDIA LIMITED and also to furnish the up to date Bank statements. It is also requested that these accounts should not be opened by any of them till further intimation is given.
The required informatior. may please be furnished at the earliest fro the purpose of investigation under Section 91 and 102 Cr. P.C.
Yours faithfully,
P. Venkateswara Rao, Sub-Divisional Police Officer, Vikarabad Sub-Division Ranga Reddy District."
4. In the light of such similar letters, which had been addressed to the respective banking institutions there has been freezing of accounts of the writ petitioner.
SUBMISSIONS OF SRI ASHOK B.
5. The learned Senior Counsel representing the Writ Petitioner had taken this Court through the contents of the affidavit filed in support of the Writ Petition, the respective stands taken in the counter affidavits nd also the provisions of the A.P. Protection of Depositors of Financial Establishments Act, 1999 (hereinafter in short referred to as 'the Act') and also A.P. Protection of Depositors of Financial Establishments Rules, 1999 (in short hereinafter referred to as "Rules" for the purpose of convenience), and would maintain that in the light of the facts and circumstances, the freezing of accounts of the writ petitioner cannot be sustained. The ingredients of Section 3 of the Act are not satisfied at all. The learned senior counsel also had taken this Court through Sections 2(c), 3, 4, 5 and 6 of the Act as well, and further made elaborate submissions pointing out the order made by a competent Criminal Court in this regard and would maintain that in the light of the same, the action of the institutions in taking a stand that they are just following the directions of the police to freeze the accounts in exercise of the powers, which in fact had been exercised by the police, under Section 102 of the Code of Criminal Procedure, 1973, definitely cannot be sustained. The learned senior counsel also would contend that dt any rate this is just abuse of process of law and no ad interim order had been made and no further progress in the investigation at least had been made and in a way the action taken at this juncture cannot be sustained. The learned senior counsel also placed strong reliance on a decision of Rajasthan High Court in this regard.
SUBMISSIONS OF SRI ASHOK ANAND KUMAR:
6. Sri Ashok Anand Kumar, the learned counsel representing R 1 to R6 had taken this Court through the contents of the counter affid
