Court Upholds Fundamental Rights, Directs Only Disputed Amount to Remain Frozen Amidst Investigation
In a landmark decision, the Telangana High Court has ruled in favor of M/s. The Bottle Restaurant and Bar, directing the partial unfreezing of their bank account. The court's order comes in response to a writ petition challenging the blanket freezing of the restaurant's account by investigative agencies, allegedly linked to fraudulent transactions.
Presided over by Justice E.V. Venugopal, the court highlighted the infringement of fundamental rights resulting from the indiscriminate freezing of bank accounts without a prima facie nexus to criminal activities. The judgment emphasized that such actions violate Articles 19(1)(g), 21, and 300-A of the Indian Constitution, which safeguard the right to trade, personal liberty, and property.
The case arose when the bank account of M/s. The Bottle Restaurant and Bar at Kotak Mahindra Bank, Gandhi Chowk Branch, Khammam, was frozen without prior notice or a formal First Information Report (FIR). The petitioner argued that the freezing order was arbitrary and caused undue financial hardship, crippling the restaurant's daily operations.
The court underscored that freezing orders should be narrowly tailored to the disputed amounts and must be communicated to account holders with clear reasons. Blanket orders that disrupt financial operations and business lifelines were deemed impermissible.
Justice Venugopal ordered that only the disputed amount remain frozen, allowing the restaurant to conduct lawful transactions. The court directed the Superintendent of Police to ensure immediate communication of the order to the concerned bank branch for prompt action.
This decision reinforces the importance of adhering to constitutional principles and procedural fairness in investigative actions, safeguarding citizens' rights against arbitrary state intervention.
Bottom Line:
Freezing of a citizen's bank account without cogent reasons and prima facie nexus with any criminal activity violates fundamental rights under Articles 19(1)(g), 21, and 300-A of the Constitution of India. Such orders must be narrowly tailored to the disputed amount and cannot be blanket in nature.
Statutory provision(s): Articles 19(1)(g), 21, 300-A of the Constitution of India, Bharatiya Nagarik Suraksha Sanhita, 2023 Section 528
M/s. The Bottle Restaurant and Bar v. Union of India, (Telangana) : Law Finder Doc id # 2874725
