HIGH COURT OF MADRAS
Dr.Justice G.Jayachandran, J
MOHAMMED SAIFULLAH – Appellant
Versus
RESERVE BANK OF INDIA – Respondent
Certainly. Based on the provided legal document, here are the key points summarized:
The court emphasized that freezing bank accounts without notifying the account holders infringes on fundamental rights and such actions must be properly justified by the investigating authorities (!) .
While statutes empower investigation agencies to request account freezing during investigations, the exercise of this power must adhere to principles of fairness, including timely notification to the account holder about the freezing and its extent (!) .
The case involved a petitioner suspected of dealing with cryptocurrency, whose account was frozen without prior notice or justification for over a year, causing significant disruption to their financial and business activities (!) (!) .
The court underscored that freezing an account without quantifying the amount involved or specifying the duration violates the fundamental rights related to trade and livelihood (!) .
The court directed the bank to de-freeze the account while maintaining a lien on a specified amount, allowing the petitioner to operate the account with a minimum balance condition (!) .
It was highlighted that blanket freezing of entire accounts without proper justification and notification is unlawful and infringes on fundamental rights, and such actions should be limited to the extent necessary (!) .
The court noted that guidelines issued to regulate account freezing are often not observed in practice, leading to arbitrary actions (!) .
The decision emphasizes that any order to freeze an account must be specific, quantify the amount involved, and specify the duration, failing which it constitutes a violation of rights (!) .
The court disposed of the petition with directions to de-freeze the account while imposing a lien on a minimal amount, ensuring the petitioner can operate the account under specified conditions (!) .
There shall be no order as to costs (!) .
Please let me know if you need further analysis or assistance.
ORDER
The issue by many of the citizens currently face is the freezing of the account on instruction from the local Police or from the National Cyber Crime Reporting Portal. Many a times, the account holders have been taken into surprise that by such order of freezing, before they could realize as to why and for what purpose the accounts are freezed, enough damages are caused to their day to day financial life, since the very life- line of the business gets severed by such unilateral orders of account freezing passed by the Police.
2. No doubt, the statutes empower the investigation agency to request the Bank to freeze the account pending investigation and intimate it forthwith to the jurisdiction Court, but whether the power is properly exercised or not is the moot question now looming large and in the several judgments of the Courts across the India, it had been categorically held that there cannot be freezing of account perpectually without intimating the account holders what for their account is freezed and what extent it has to be freezed. Even then, day in and day out, this Court receives applications to defreeze the account pointing out the failure of the investigating agency


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