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IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.A.Abdul Hakhim
Abdul Azeez – Appellant
Versus
Union Of India, Represented By The Secretary, Ministry Of Finance, North Block, New Delhi – Respondent
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| Table of Content |
|---|
| 1. right of banks to freeze accounts under suspicion. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. arguments on bank's authority and obligations. (Para 7 , 9 , 10 , 11) |
| 3. court's analysis on regulatory guidelines and actions. (Para 8 , 12 , 14 , 15 , 16 , 18 , 19 , 20 , 21 , 22 , 24 , 26 , 27) |
| 4. clarification of rbi's and banks' powers regarding account freezing. (Para 13 , 17 , 23 , 25) |
| 5. final directions for account freezing protocols. (Para 28) |
JUDGMENT :
1. Since common questions arise in these Writ Petitions, I dispose of these Writ Petitions by a common judgment. A crucial and important question arises in these Writ Petitions as to whether the Bank has the right or authority to freeze the account of its Account Holders on the basis of suspicion with respect to the transactions in the account by itself in the absence of any requisition to do so from a law enforcement agency. This question has emerged on account of the recent rampant increase in financial cyber fraud. The present situation has led to the filing of a large number of cases involving the account freezing of persons involved in the fraud and innocent persons in this Court. Every day this Court is dealing with nearl
Banks cannot freeze accounts solely on suspicion without compliance with statutory guidelines and requisitions from law enforcement, as it infringes property rights under Article 300A.
Banks may freeze accounts based on suspicion, provided they follow specific guidelines for communication and investigation.
A bank must follow due process and provide account holders with reasons for freezing accounts due to suspicious transactions.
Banks need to follow due process when freezing accounts on suspicion, ensuring the account holder is informed and given opportunity to explain.
Freezing an entire bank account without evidence linking the account holder to a crime violates the right to livelihood; only specific amounts should be frozen with proper justification.
The freezing of a business account requires identification of the tainted amount to ensure proportionality, and blanket freezes violate constitutional protections against arbitrary state action.
Banks must communicate reasons for freezing accounts and allow account holders to submit explanations within a specified timeframe.
The court clarifies guidelines for banks in freezing accounts upon suspicion of illicit transactions while ensuring legal rights of account holders are protected.
Police can freeze bank accounts under Section 106 BNSS without prior notice, but only the amounts suspected of being linked to crimes, not entire balances; account holders must be informed post-seizu....
The court articulated guidelines for banks regarding account freezing procedures and the rights of account holders under suspicion based on recent statutory provisions.
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