New Delhi: The Delhi High Court, while expressing its concerns on blanket freezing of bank accounts, has said that it is high time that the investigating agencies act with requisite care, caution and compassion and when they resorts to it, they must assign reasons.
Justice Manoj Jain said this while hearing a plea in which petitioner company’s account, which was having a withdrawal balance of more than Rs 93 crore, was frozen due to an innocuous entry of Rs. 200 being credited in that account.
Present case did not suggest that petitioner was a suspect or accused of any cyber-crime: High Court
The High Court said that the present case did not suggest that the petitioner was a suspect or accused of any cyber-crime and that the company may not even be connected with the offence under investigation and might be unintended beneficiary.
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“Such blanket measure, if taken recourse to, without offering any reason, can certainly play havoc with the financial concerns of such account holders. In relation to small-time vendors, it can disrupt prospects of their mere existence, even. It is not difficult to imagine that any such action can put their lives in a complete disarray,” the High Court said.
Action of freezing the account, in its entirety, has left petitioner high and dry, High Court noted
The High Court noted that instead of directing preservation of disputed amount, which was mere Rs. 200, the bank was directed to freeze the entire account and such action of freezing the account, in its entirety, has, reportedly, left the petitioner high and dry and has led to significant adverse financial consequences, including dishonouring of several cheques issued by the petitioner and the complete disruption of its business operations.
Issue raised in the present petition has been a matter of recurring concern: High Court
“The issue raised in the present petition has been a matter of recurring concern as many such like petitions are flooding the Courts. It is, therefore, high time that the investigating/law enforcement agencies, in context of freezing bank accounts, act with requisite care, caution and yes, compassion as well,” the High Court said.
The High Court further said that possibility of marking a lien on disputed amount, whenever it is identifiable, should be explored as a more appropriate interim measure.
“Ideally, it should be the first and foremost option. This would, naturally, mitigate the undue hardship being caused on account of blanket freezing of account and would also ensure that the alleged cheated money remains secured and intact,” the High Court said.
High Court asked Ministry of Home Affairs to take proactive steps to address the issue
The High Court, taking note of the frequent filing of such matters concerning blanket freezing of the accounts, asked the Ministry of Home Affairs, Government of India to take proactive steps to address the same.
“It (Ministry of Home Affairs) may consider consulting all concerned stakeholders, including respective States/UTs and then, with consensus of everyone, to chalk-out a uniform policy, standard operating procedures and guidelines to ensure that such matters are handled with requisite consideration and compassion. The aim should be to balance the rights of a complainant in any such criminal investigation vis-a-vis the right of innocent and unwary accountholder, made to face unwarranted hardship on account of blanket freezing of account, despite being completely innocent and unaware of commission of any crime,” the High Court said.
