Freezing an entire bank account for a small disputed amount during a criminal investigation is disproportionate; the court may allow operation of the account subject to a lien on the disputed sum to balance investigative needs with the right to conduct business.

ORDER

This Writ Petition is filed seeking the following relief:-

“…issue the direction or directions more particularly in the nature of writ of Mandamus declaring the action of the respondent No.3 in freezing the account of the petitioner herein bearing Account No.50200003929224 with the respondent No.4 as illegal arbitrary and violation of principles of natural justice and consequently direct the Respondents to defreeze the account of the Petitioner bearing Account No.50200003929224 with the Respondent No.4 freezed under the guise of investigation in Cr.No.3541/2024 of PS Cyber Crimes Gachibowli Hyderabad in the interest of justice and to pass …”

2. Heard Sri Sharad Sanghi, learned counsel appearing for the petitioner and Sri M.Srinivas, learned Assistant Government Pleader for Home, appearing for respondent Nos.1 to 3 and perused the record.

3. Learned counsel appearing for the petitioner would submit that the petitioner is a proprietorship concern engaged in the business of manufacturing and dealing in narrow woven knitted fabric. The petitioner is a small businessman, conducting his business honestly and lawfully, and has never been involved in any speculative or objectionable activities.

4. It is submitted that on 06.06.2024, the petitioner came to know that his bank account bearing Account No.50200003929224 with respondent No.4-Bank had been frozen and made inoperative. Despite making several efforts, the petitioner was unable to ascertain the reason for freezing of the said account. After considerable effort, the petitioner came to know that the account had been frozen based on a letter dated 11.06.2024 issued by respondent No.3. After persistent efforts, the petitioner obtained a copy of the said letter dated 11.06.2024, wherein respondent No.3 sought details of certain bank accounts in connection with Crime No.3541/2024 registered with the said respondent and directed respondent No.4-Bank to freeze the petitioner’s account.

5. It is submitted that the petitioner approached respondent No.4-Bank and also addressed letters to respondent No.1. Further, the petitioner submitted a representation dated 03.08.2024 to respondent No.3 requesting a copy of Crime No.3541/CCPS/CYB/2024 and seeking reasons for freezing the bank account. Due to the sudden freezing of the petitioner’s bank account, the entire business operations of the petitioner have come to a standstill, as there are no incoming or outgoing transactions possible through the said account. The petitioner is required to pay salaries to employees and has also issued cheques to vendors in the course of business. If the account is not defreezed, such cheques are likely to be dishonoured, which may result in multiple litigations and serious financial consequences for the petitioner.

6. It is submitted that the freezing of the account has left the petitioner financially handicapped, as the petitioner has no other operational bank account and depends entirely on the said account for business and livelihood. Due to the freezing of the account, the petitioner is unable to pay out the EMIs towards loans, which may result in defaults and penal consequences. Being aggrieved by the letter/order issued by respondent No.3 directing the freezing of the petitioner’s bank account bearing Account No.50200003929224 maintained with respondent No.4-Bank, the petitioner has filed the present Writ Petition seeking appropriate relief.

7. Learned Assistant Government Pleader for Home on instructions would submit that as per the NCRP Report Acknowledgment No.23706240025543, dated 03.06.2024, an amount of Rs.10,000/-