A bank cannot freeze a company's account without a valid order from an adjudicatory forum, even amid management disputes.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. The present appeals arise out of a common order passed in connection with three different applications. The backdrop of the case is that WPA No. 6088 of 2025 was filed under Article 226 of the Constitution of India by the present appellant against an order whereby the bank accounts of the appellant no.2-Company, of which the appellant no.1 is the director, was frozen by the respondent no.2, that is the Axis Bank Limited.

2. Upon the said decision being taken by the Bank, the appellants moved the banking Ombudsman of the Reserve Bank of India (RBI), the first respondent herein. The Ombudsman turned down the challenge on the ground that another similar proceeding on the same issue was pending before another competent forum.

3. Challenging the action of the Bank as well as the Ombudsman‟s decision, the writ petition was taken out, which culminated in an order dated April 9, 2025, whereby a learned Single Judge of this Court disposed of the writ petition by directing the Axis Bank to defreeze the Bank Account and the Demat Account of the writ petitioner/appellant no. 2, subject to deposit of an indemnity bond as per the norms of the Bank either by the writ petitioners or by the proforma respondent, keeping it open to the writ petitioners to approach the competent forum for damages from the Bank for not permitting the writ petitioners to operate the Bank Account, thereby causing loss to the Company. It is relevant to note that the proforma respondent no.7 before the writ court, being the proforma respondent no.8 herein, is a Company by the name of Vindhya Telelinks Limited (for short „VTL‟), which is the 100% shareholder of the appellant no.2-Company, namely August Agents Limited, and is in complete control over the appellant no.2.

4. Subsequently, upon the Bank having not implemented the said direction, a Contempt Application bearing CPAN No. 953 of 2025 was filed by the writ petitioners/appellants. On the other hand, Axis Bank filed an application seeking clarification of the order dated April 9, 2025 with respect to details of the authorized signatories to be allowed to operate the accounts, (bearing Current Account No. 915020046066290) and Demat Account (bearing Account No. IN300484/28735957), upon defreezing those in terms of the said order. The said application was numbered as CAN 1 of 2025.

5. Another application, bearing CAN 2 of 2025, was filed by the present respondent nos. 5 to 7, namely one Krishna Damani, one Susil Kumar Daga and one Vinod Kumar Sharma, seeking recall of the order dated April 9, 2025 passed in the writ petition and to be impleaded as parties to the writ petition. In the said application, it was contended that material facts were suppressed by the writ petitioners while obtaining the order under recall and that the recall applicants/present respondent nos. 5 to 7, despite being necessary parties (as the complainants on the basis of whose allegations the subject accounts were frozen), were not impleaded in the writ petition.

6. By the present impugned order dated June 9, 2025, the learned Single Judge of this Court observed that after hearing the submissions of the parties, it appeared that the matter was required to be heard. Accordingly the contempt application against Axis Bank was kept in abeyance for the time being and it was directed that the order dated April 9, 2025 shall not be acted up