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2025 Supreme(Online)(Kar) 10705
KARNATAKA HIGH COURT
S.R.KRISHNA KUMAR, J
AXIS BANK LTD. – Appellant
Versus
THE STATE OF KARNATAKA – Respondent
CRIMINAL PETITION NO. 6455 OF 2025 | 482(Cr.PC) / 528(BNSS)
For the Appellants/Petitioners: SMT. LAKSHMI T.
For the Respondents: SMT. SOWMYA R.
The court emphasized that a bank should be heard before a magistrate orders account defreezing under procedural sections.
Headnote:Statute Analysis: The petition was made under Sections 451 and 457 of the Criminal Procedure Code to set aside the order directing the petitioner to defreeze funds and transfer them to the respondent. Facts of the Case: The petitioner's banking operations were affected by conflicting orders concerning account defreezing issued by various magistrates.
Findings of Court:
It was determined that the jurisdictional magistrate must hear the petitioner before any order to release funds is executed.
Issues: The core issue was whether the order to defreeze accounts was proper and whether the petitioner had the right to be heard.
Ratio Decidendi: The Court found that due process was not followed in not affording the petitioner a hearing in the matter, thus warranting a remand of the case back to the jurisdictional court.
Result: Criminal Petition is allowed; the previous order is set aside, and the matter is remanded to reconsider the application.
| Table of Content |
|---|
| 1. review authority of banking decisions regarding account defreezing. (Para 1 , 2) |
| 2. rights of the petitioner to be heard prior to account fund directives. (Para 4) |
| 3. emphasizing judicial oversight in financial mandates. (Para 5) |
ORAL ORDER
In this petition, the petitioner seeks the following reliefs: “a) To set aside the order dated 29.06.2024 passed by the Hon’ble 45th Additional Chief Judicial Magistrate, Bangalore, is now pending before the XLV Additional Chief Judicial Magistrate, Bengaluru in Crime No.515/2024 i.e., Annexure-C in terms of which, the petitioner is directed to defreeze the savings/current account bearing No.923010072071897 maintained in the Petitioner’s Bank and transfer the same to the account of the Respondent No.2.”
2. Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that the issue in controversy involved in the present petition is directly and squarely covered by the judgment of a Co-ordinate Bench of this Court in the case of Axis Bank Ltd., Vs. The State of Karnataka and Anr. , and the present petition may be disposed of in the above terms.
4. As rightly contended by the learned counsel for the petitioner, the issue in controversy in the present petition is covered by the judgment of this Court in the case of Axis Bank Ltd., Vs.
The State of Karnataka and Anr., wherein it is held as under:
“The Petitioner which is a Financial Institution is before this Court challenging the order passed by 1st Additional Chief Metropolitan Magistrate on an application filed under Sections 451 and 457 of Cr.P.C. by the complainant/respondent No.2 directing the petitioner-Bank to defreeze the amount belonging to the accused and transfer the said amount to the bank account of the complainants/respondent No.2.
2. The petitioner’s concern is that the order passed by the Jurisdictional Magistrate cannot be executed because it surpasses the specified release amount, and numerous courts across the Country have issued directives to the investigating agencies to unfreeze the bank accounts of the accused therein.
3. Learned Special Public Prosecutor on instructions would suggest that the matter may be remanded to the Jurisdictional Courts to consider the application filed under Sections 451 and 457 of Cr.P.C. afresh, by affording an opportunity of hearing to the petitioner.
4. Admittedly, multiple cases are registered against the accused herein within the State and across the country and there are multiple orders passed by the Jurisdictional Magistrates directing the petitioner to unfreeze the account of the accused and transfer the amount to the bank account of the complainants. The passing of multiple orders has caused difficulty to the petitioner/bank in executing the said order, since the amount ordered to be released in some accounts exceeds the amount available in the subject accounts of the accused. Therefore, the learned Magistrate before passing an order directing the petitioner to unfreeze and transfer the amount to the accounts of the complainants, is required to hear the petitioner.
Accordingly, I pass the following:
ORDER
i. Criminal Petition is allowed ii. The order dated 26.11.2021 passed by the 1st Additional Chief Metropolitan Magistrate, Bengaluru in Cr.No.452/2021 is hereby set aside.
iii. Matter is remanded to 1st Additional Chief Metropolitan Magistrate, Bengaluru to reconsider the application filed under Sections 451 and 457 of Cr.P.C. afresh, after giving the opportunity of hearing to the petitioner.
5. Till the application is disposed of, the petitioner/bank is restrained from releasing the money in favour of any person from the subject account.”
5. In view of the above, the writ petition is disposed of in terms of the order passed in the case of Axis Bank Ltd.,
