IMPORTANT POINT
The court established that bank accounts can only be frozen to the extent of amounts specified by police requisitions, and failure to report seizure to the magistrate invalidates the freeze.

JUDGMENT :

(C.S. DIAS, J.) 

The writ petition is filed to direct the respondents 1 and 2 banks to lift the freezing of the petitioner’s bank accounts bearing Nos.10201679602 and 924020038339854.

2. The petitioner is the holder of the above two bank accounts with the respondents 1 and 2 banks. The respondents 1 and 2 have freezed the petitioner’s bank accounts due to certain requisitions issued by the police. The action of the respondents 1 and 2 is arbitrary. Hence, this writ petition.

3. The 2^nd respondent has filed a counter affidavit denying the allegations in the writ petition. The 2^nd respondent has contended that in addition to the requisitions received from the respondents 3 to 13, the petitioner has been operating the current account bearing No.924020038339854, in violation of the declarations given by the petitioner. Even though the 2^nd respondent has asked the petitioner to submit certain documents to substantiate the suspicious transactions that have been conducted in the account, he has not produced the same. Therefore, the writ petition may be dismissed.

4. Heard; the learned counsel appearing for the petitioner and the learned counsel for the respondents 1 and 2. Even though notice has been served on the respondents 3 to 13, there is no appearance for them.

5. The learned counsel appearing for the 1^st respondent submitted that, the disputed amount is Rs.6,48,622/-. The learned counsel appearing for the 2^nd respondent submitted that, the disputed amount is Rs.53,617/-, in addition to the non-production of the required documents. The said submission is recorded.

6. In considering an identical matter, this Court in Dr.Sajeer v. Reserve Bank of India [ 2024 (1) KLT 826 ] held as follows :

“ a. The respondent Banks arrayed in these cases, are directed to confine the order of freeze against the accounts of the respective petitioners, only to the extent of the amounts mentioned in the order/requisition issued to them by the Police Authorities. This shall be done forthwith, so as to enable the petitioners to deal with their accounts, and transact therein, beyond that limit.

b. The respondent – Police Authorities concerned are hereby directed to inform the respective Banks as to whether freezing of accounts of the petitioners in these Writ Petitions will require to be continued even in the afore manner; and if so, for what further time, within a period of eight months from the date of receipt of a copy of this judgment.

c. On the Banks receiving the afore information/intimation from the Police Authorities, they will adhere with it and complete necessary action – either continuing the freeze for such period as mentioned therein; or withdrawing it, as the case may be.

d. If, however, no information or intimation is received by their Banks in terms of directions (b) above, the petitioners or such among them, will be at full liberty to approach this Court again; for which purpose, all their contentions in these Writ Petitions are left open and reserved to them, to impel in future.”

7. Subsequently, this Court in Nazeer K.T v. Manager, Federal Bank Ltd [ 2024 KHC OnLine 768 ], after concurring with the view in Dr.Sajeer's case (supra) and taking into consideration Section 102 of the Code of Criminal Procedure (now Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023] and the interpretation of Section 102 of the Code laid down by the Hon'ble Supreme Court in State of Maharashtra v. Tapas D Neogy [ (1999) 7 SCC 685 ], Teesta Atul Setalvad v. State of Gujarat [ (2018) 2 SCC 372 ] and Shento Varghese v. Julfikar Husen and others [ 2024 SCC OnLine SC 895 ], has held thus:

“8. The above discussion leads to the conclusion that, while delay in forthwith reporting the seizure to the Magistrate may only be an irregularity, total failure to report the seizure will definitely have a negative impact on the validity of the seizure. In such circumstances, account holders like the petitioner, most of whom are not even made accused in the crime