Can govt freeze bank account forever? Uttarakhand High Court ends 6-year ordeal for non-accused in corruption probe

Uttarakhand High Court held that mere pendency of a criminal trial cannot justify indefinite freezing of property belonging to a person who is not facing trial.

The Uttarakhand High Court recently ordered the unfreezing of a man’s bank account that had remained frozen since 2018 owing to a corruption probe and said that the mere pendency of a criminal trial doesn’t justify the indefinite freezing of property of someone not facing trial.

Justice Ashish Naithani, therefore, allowed the criminal revision petition filed by the bank account holder whose account was frozen during the investigation of an alleged land compensation scam, despite not being named as an accused in the FIR or chargesheeted.

“Mere pendency of a criminal trial cannot, by itself, justify indefinite freezing of property belonging to a person who is not facing trial,” the court held.

The court cautioned that accepting such a proposition would mean conferring the investigating agency an unchecked power to restrain property for years, without trial, or without conviction.

“To accept such a proposition would be to confer upon the investigating agency an unchecked power to restrain property for years, without trial, without conviction, and without judicial oversight, a result wholly incompatible with the rule of law,” the January 3 order stated.

It was alleged that an agricultural land was falsely shown as non-agricultural by procuring back-dated orders resulting in payment of excessive compensation.

During the investigation, the probe officer requested State Bank of India to freeze the applicant’s account on the ground that compensation amount allegedly disbursed to the landowner was deposited in the said account following which the bank account was frozen. The applicant is one of the landowner’s sons.

The man moved the trial court for getting his account defreezed, but his plea was rejected by a Haldwani special court, prompting him to move the high court.

The court held that a bank account constitutes “property” within the meaning of Section 102 (power of police officer to seize certain property) of CrPC.

It further added that freezing of a bank account amounts to seizure of property and such a seizure is a serious intrusion into proprietary and economic rights which cannot be treated as a routine or innocuous investigative measure.

“Freezing of a bank account, which effectively restrains the account holder from accessing or operating the account, amounts to seizure of property. Such a seizure is a serious intrusion into proprietary and economic rights and cannot be treated as a routine or innocuous investigative measure,” the order read.

The court observed that freezing the bank account of the applicant when he is not an accused and when the investigation has substantially progressed, is manifestly disproportionate.

Stressing on the need to balance the interests of the prosecution with the rights of individuals, the court noted that such a balance can be achieved by permitting unfreezing of the bank account, subject to appropriate conditions to secure the alleged amount.

The court, therefore, directed the bank account to be unfrozen subject to the account holder furnishing adequate security equivalent to the amount alleged to be connected with the offence.