Blanket freezing of a bank account without quantifying the disputed amount or establishing a prima facie nexus to a crime is arbitrary and violates the fundamental rights to trade, business, and personal liberty under Articles 19(1)(g) and 21 of the Constitution.

Order

1. The instant criminal writ petition under Article 226 of the Constitution of India has been preferred seeking a direction for the respondents to defreeze the bank accounts of the petitioners.

2. The facts of the case are that alleging certain fraudulent transactions, bank account of the petitioner has been freezed, details of which are provided hereinunder :-

3. Heard learned counsel for the parties and perused the material placed on the record.

4. 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 there cannot be freezing of account perpetually without intimating the account holders what for their account is freezed and what extent it has to be freezed because great inconvenience and hardship is caused to the day to day financial life of the persons concerned, since the very life-line of the business gets severed by such unilateral orders of account freezing passed by the Police.

5. The freezing of a citizen’s bank account, in the absence of any cogent reasons and without establishing even a prima facie nexus of such account with the commission of any cognizable offence, amounts to a grave and unwarranted intrusion into the fundamental rights guaranteed under the Constitution. Such an action, taken in a mechanical and arbitrary manner, not only cripples the financial autonomy of an individual but also directly impinges upon the right to life and personal liberty enshrined under Article 21 and the freedom to carry on trade, occupation and business under Article 19(1)(g) of the Constitution of India. The power to interdict the operation of a bank account is an exceptional one, to be exercised sparingly, with circumspection and strictly in accordance with law, and only upon recording reasons demonstrating a live and proximate link between the account and the alleged criminal activity. Any freezing order passed dehors such safeguards betrays a colourable exercise of power, is manifestly arbitrary, and cannot be sustained in the eyes of law.

6. In the case at hand, though only a certain amount is disputed and the same has been kept on hold, but due to the blanket order to freeze the account, the respondent Banks have freezed the accounts in their entirety. Therefore, the petitioners herein are unable to operate their accounts and deal with the money lying therein. Under the guise of investigation, order freezing the entire account without quantifying the amount and period cannot be passed. Such order will be construed as violation of the fundamental rights of trade and business as well as violation of livelihood. This court is of the considered opinion that keeping only the disputed amount on hold would serve the interest of the parties.

7. Upon due consideration of the submissions advanced by learned counsel for the petitioner and perusing the material available on record, it is directed that the amount in dispute shall remain under freeze; however, the petitioner shall be permitted to operate the said bank account for all other lawful transactions. The respondent-bank shall ensure that only the debit operations to the extent of the disputed amount in the account bearing the number mentioned hereinbelow remain interdicted, while the account shall otherwise remain fully operational for all remaining purposes.

8. The following bank accounts of the petitioner shall remain unfrozen: -