Court finds blanket freezing of bank accounts by police disproportionate and a breach of fundamental rights.
In a significant ruling, the Rajasthan High Court has ordered the partial de-freezing of bank accounts belonging to Shwetambari Vikram Bhatt and others, amid a legal dispute involving allegations of financial misappropriation in film production. The court, presided by Justice Farjand Ali, ruled that the investigating agency's action of freezing the entire accounts was disproportionate and violated the fundamental rights of the petitioners under Articles 19(1)(g) and 21 of the Indian Constitution.
The case stemmed from a business arrangement between the petitioners, who are film professionals, and a complainant for the production of multiple films. Allegations of financial irregularities led to the registration of an FIR and subsequent arrest of the petitioners. Following this, the Udaipur Police instructed banks to freeze the petitioners' accounts. The petitioner, Shwetambari Vikram Bhatt, argued that the funds in question were legitimate professional fees and that the freezing of accounts had caused severe financial hardship.
The court held that while the freezing of accounts is permissible by law during an investigation, it must adhere to the principles of natural justice, fairness, and proportionality. Justice Ali emphasized that such measures should only target the disputed amount and not extend beyond it. The freezing of entire accounts was deemed arbitrary and a violation of the petitioners' rights to economic freedom and livelihood.
The judgment referenced the landmark Supreme Court case of Maneka Gandhi v. Union of India, reinforcing that any procedure affecting life or liberty must be just, fair, and reasonable. The court directed that only the disputed amount of Rs. 30 crores remain frozen, allowing the petitioners to operate their accounts for all lawful transactions. This decision aims to balance the need for investigation with the petitioners' right to financial autonomy.
The court's decision underscores the necessity of maintaining procedural fairness and safeguarding individual rights during criminal investigations. The ruling mandates immediate compliance by the concerned banks, ensuring that petitioners can access their accounts for essential transactions.
Bottom Line:
Freezing of bank accounts by the investigating agency is permissible under the law, but such action must adhere to principles of natural justice, proportionality, and fairness. Blanket freezing of accounts beyond the disputed amount constitutes an arbitrary exercise of power and infringes upon fundamental rights under Articles 19(1)(g) and 21 of the Constitution of India.
Statutory provision(s): Articles 19(1)(g) and 21 of the Constitution of India, Maneka Gandhi v. Union of India, 1978 AIR 597
Shwetambari Vikram Bhatt v. State of Rajasthan, (Rajasthan) : Law Finder Doc id # 2874935
