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2025 Supreme(Online)(Kar) 16216
KARNATAKA HIGH COURT
S.R. KRISHNA KUMAR, J
AXIS BANK LTD. – Appellant
Versus
THE STATE OF KARNATAKA – Respondent
CRIMINAL PETITION NO. 8289 OF 2025 (482(Cr.PC) / 528(BNSS)
For the Appellants/Petitioners: SRI. UNNIKRISHNAN M.
For the Respondents: SRI. CHANNAPPA ERAPPA, HCGP
Procedural rights must be acknowledged in financial defreezing orders, requiring a hearing for all interested parties.
Headnote:(A) Criminal Procedure Code, 1973 - Sections 451 and 457 - Order directing defreezing of bank account challenged - The petitioner contended that multiple orders have been issued by various courts directing the bank to unfreeze accounts of the accused, leading to execution difficulties - Court emphasized the necessity of hearing the petitioner before passing such orders. (Paras 4 and 6)
(B) Jurisdictional Magistrate - The learned Magistrate must consider the application anew after hearing the interested parties to avoid disproportionate orders. (Paras 6)
Facts of the case:
The petitioner sought to set aside an order directing the defreezing of a bank account and transferring funds to the second respondent, alleging that it contravened established guidelines. The matter referenced a similar previous judgment.
Findings of Court:
The order of the jurisdictional Magistrate was set aside and remanded for fresh consideration with the opportunity provided for hearing the petitioner.
Issues: The primary issue was the propriety of the order directing defreezing without an adequate hearing for the petitioner involved.
Ratio Decidendi: It was held that the procedural rights of the parties must be regarded before issuing orders of account defreezing to ensure fair consideration.
Result: Petition allowed and order set aside.
| Table of Content |
|---|
| 1. reliefs sought by the bank to challenge defreezing orders. (Para 1 , 2) |
| 2. court's observations on handling multiple conflicting orders. (Para 4) |
| 3. final decision and directions for remanding the matter. (Para 5) |
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:
(a) To set aside the order dated 23.08.2024 passed by the Hon’ble Court of the 45th Additional Chief Judicial Magistrate, Bengaluru, in Crime No.581/2024 i.e., Annexure-C in terms of which, the Petitioner is directed to defreeze the Savings / current account bearing A/c. No.923020013230995 maintained in the Petitioner’s Bank and transfer the same to the account of the Respondent No.2.
(b) To pass such other orders as may be deemed expedient in the circumstances of the case and in the interest of justice.”
2. Heard learned counsel for the petitioner and learned HCGP for 1st respondent 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 the Co-ordinate Bench of this Court in the case of Axis Bank Ltd., Vs. The State of Karnataka and Anr. – Crl.P.No.1787/2023 dated 14.12.2023 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. Supra, 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, petition is disposed of in terms of
