A blanket freeze on a bank account without quantifying the disputed amount violates fundamental rights to trade and business under Articles 19(1)(g) and 21 of the Constitution.

ORDER:

This Writ Petition is filed under Article 226 of Constitution of India with the following prayer for:

“.... may be pleased to pass an order or directions more particularly one in the nature of of Certiorari for quashing the Impugned Letter dated 31.05.2024 marked and annexed as Annexure P-1 issued by the Respondent No.3 to Respondent No.4 Bank, directing/requesting to hold and Debit freeze on the accounts bearing Account No. 920018222413 and Account No. 920018220701, whereby effectively creating a Debit Freeze on the Master Escrow Pooling Account of the Petitioner as the Respondent No.4 Bank cannot place a debit freeze on any individual account like bearing Account No. 920018222413 and Account No. 920018220701, thereby violating the fundamental rights of right to livelihood as arbitrary, illegal, contrary to the principles of natural justice and provisions of Code of Criminal Procedure, 1973 and violative of Fundamental rights guaranteed under Article 19(1 )(g) and Article 21 of the Constitution of India .”

2. When the matter is taken up for hearing, Sri Vikram Pusarla, learned Senior Counsel assisted by Sri N.Jeevan Kumar, learned counsel for the Petitioner would submit that the Petitioner owns and operates an online technology platform for invoice discounting under the trade name viz., TradeCred, which provides a platform for buying, selling and leasing of assets and allows its users to deploy private capital into curated invoices and obtain fixed returns for their investments. Learned counsel would further submit that the grievance of the Petitioner is that the subject account of the Petitioner maintained with Respondent No.4 – Bank is a Nodal Escrow Pooling Account, which has funds of crores of rupees over 5000 customers and the impugned letter is adversely affecting the business of the Petitioner and the funds of 5000 of its customers. Learned counsel would further submit that, on verbal discussions, Respondent No.3 informed to the Petitioner that a sum of Rs.50,000/- is in dispute in respect of the alleged nodal accounts of the Petitioner. Hence, prayed to defreeze the account by keep a lien over a sum of Rs.50,000/-.

3. Sri S.Sarath Kumar, learned Assistant Government Pleader for Home would submit that cases in Crime Nos.363/2023 and 402/2023 have been registered against the Petitioner and the said cases are under investigation and filed written instructions to that effect.

4. Perusal of the copy of the Letter dated 31.05.2024 addressed by Respondent No.3 to Respondent No.4 Bank does not disclose any case that has been registered against the Petitioner with regard to the present crime. In the case on hand, as per the instructions of Respondent No.3, the suspected money in the account of the Petitioner is a sum of Rs.50,000/-. Due to the blanket order to freeze the entire account, Respondent No.4 Bank has freezed the account in its entirety. As such, the Petitioner is unable to operate its account and deal with the money lying in its account. Under the guise of investigation, order freezing the entire account without quantifying the amount and period, cannot be passed and such an order will be construed as violation of fundamental rights of trade and business.

5. Considering the submissions and in view of the facts and circumstances of the case, it is apposite to direct Respondent No.4 Bank to de-freeze the account of the Petitioner and to keep a lien over a sum of Rs.50,000/-. However, it is clarified that if there are any other independent freeze orders received by Respondent No.4 unrelating to this incident, they will be at liberty to continue the freeze for such amounts also.

6. With the above directions, this Writ Petition is disposed of. There shall be no order as to costs.

As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed.