A bank account can only be frozen to the extent specified by police requisitions, and due process must be followed in communicating suspicious transactions.

JUDGMENT

1. The Petitioner has filed this Writ Petition challenging the debit freezing/lien of his Bank account with the Respondent/Bank at the requisition of the Police Authorities. The case of the Petitioner is that the Petitioner is not an accused in the Crime registered by the Police authorities against some other persons, in which the requisition was made; that the Petitioner is in no way connected with the said Crime; and that the debit freezing/lien of the account is in violation of Sections 106 & 107 of the Bharatiya Nagarik Suraksha Sanhita , 2023 ( BNSS ) and Article 300A of the Constitution of India .

2. The learned Standing Counsel for the Respondent/Bank, on instructions, submitted that the Bank has received a requisition from the Respondent No.4 for debit freeze for an amount of Rs.1,050/-. Apart from that, the Bank has found some suspicious transactions in the account, and hence, the account is kept as a mule account. In such a case, the Bank has to furnish the details of the suspicious transactions to the petitioner, and it is for the Petitioner to submit a necessary explanation for the suspicious transactions to the Bank to permit operation of the account from the side of the Bank, limiting the debit freeze/lien to an amount of Rs.1,050/-. If the Bank is satisfied with the explanation of the petitioner for the suspicious transactions, the Petitioner is to be permitted to operate the account, limiting the debit freeze/lien of Rs.1,050/-.

3. Regarding the Debit Freeze/lien, this Court considered the issue in Dr. Sajeer v. Reserve Bank of India [ 2024 (1) KLT 826 ], and this Court issued the following directions.

"a. The respondent Banks arrayed in these cases, are directed to confine the order of freeze against the accounts of the respective Petitioners, only to the extent of the amounts mentioned in the order/ requisition issued to them by the Police Authorities. This shall be done forthwith, so as to enable the Petitioners to deal with their accounts, and transact therein, beyond that limit.

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b The respondent - Police Authorities concerned are hereby directed to inform the respective Banks as to whether freezing of accounts of the Petitioners in these Writ Petitions will require to be continued even in the afore manner; and if so, for what further time, within a period of eight months from the date of receipt of a copy of this judgment.

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c On the Banks receiving the afore information / intimation from the Police Authorities, they will adhere with it and complete necessary action - either continuing the freeze for such period as mentioned therein; or withdrawing it, as the case may be.

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d If, however, no information or intimation is received by their Banks in terms of direction (b) above, the Petitioners or such among them, will be at full liberty to approach this Court again; for which purpose, all their contentions in these Writ Petitions are left open and reserved to them, to impel in future."

4. Subsequently, this Court considered the same issue in Nazeer K.T. v. Manager, Federal Bank , Makkaraparamba Branch [2024 KHC 768].

5. InNazeer K.T., this Court considered the scope of Section 102 of the Code of Criminal Procedure , 1973 (corresponding to Section 106 of the BNSS ), with reference to the law laid down by the Hon'ble Supreme Court inState of Maharashtra v. Tapas D. Neogy [ (1999) 7 SCC 685 ], Teesta Atul Setalvad v. State of Gujarat [(2018) 2 SCC 372] and Shento Varghese v. Julfikar Husen and Others [(2024) 7 SCC 23], concurred with the view inDr. Sajeer (supra) and added the following two more directions.

“(i) The Police officer concerned shall inform the Banks whether the seizure of the Bank account has been reported to the jurisdictional Magistrate and