Brief Background
The petitioner approached the Delhi High Court seeking directions for de-freezing his bank account maintained with Axis Bank. The account had been frozen pursuant to communications received by the bank from various investigating agencies. According to the petitioner, no criminal case had been registered against him and no material had been placed on record to establish his involvement in any alleged offence.
The petitioner contended that the continued freezing of his account, despite the absence of any allegation or evidence of wrongdoing, was adversely affecting his rights and financial activities. The bank, on the other hand, stated that the freezing action had been taken on the basis of communications received from investigating authorities.
Order Passed by the Court
The Hon’ble Delhi High Court observed that the investigating agencies had failed to justify the continued freezing of the petitioner’s account despite being granted opportunities to do so. The Court further noted that no offence had been registered against the petitioner and no material had been produced to demonstrate his complicity in any unlawful activity.
Relying upon its earlier decision in Malabar Gold and Diamond Limited vs. Union of India, the Court held that indiscriminate freezing of bank accounts of persons who are neither accused nor suspects is arbitrary and can adversely affect fundamental rights, including the right to livelihood and the freedom to carry on business. Accordingly, the Court directed that the freezing action be lifted with immediate effect.
Significance of the Order
This order reinforces the principle that bank accounts cannot be frozen indefinitely without adequate justification. The Delhi High Court emphasized that investigative measures must be balanced against the constitutional rights of individuals, particularly where no evidence of involvement in any offence has been established. At the same time, the Court clarified that investigating agencies remain free to continue their inquiry and take action in accordance with law if any incriminating material emerges.