Hyderabad: Telangana high court held that freezing a citizen’s bank account — in the absence of cogent reasons and without even a prima facie nexus between the account and a cognizable offence — constitutes a grave and unwarranted violation of the fundamental rights of trade and business, as well as livelihood.Justice EV Venugopal further ruled that a mechanical and arbitrary freezing order directly impinges upon the right to life and personal liberty of the account holder under Article 21 and the freedom to carry on trade, occupation, and business under Article 19(1)(g). The court directed that the account be restored immediately.The judge passed the directions recently while disposing of a petition filed by Khammam-based restaurant and bar, The Bottle, whose account in a private bank was frozen on the instructions of the cybercrime wing of Etawah district, Uttar Pradesh.The bar owner, Kandibanda Sridhar, stated in his petition that his account was frozen in connection with an investigation into a crime with which he was not connected. He stated that his name did not figure in the FIR and that no notice was issued to him.The petitioner submitted that the action was not reported to the jurisdictional magistrate and, that, there was no response to his representation asking to defreeze his account.During the hearing, the judge noted that although only a certain amount was under dispute, the entire account was frozen, leaving the petitioner unable to operate it or access the funds.Perpetual freezing of A/CThe HC observed that while an investigating agency is empowered to request a bank to freeze an account during the course of an investigation and is required to inform the jurisdictional court forthwith, such power cannot be exercised to freeze an account perpetually and unilaterally, without informing the account holder of the reasons and the extent of the freeze.It further noted that such action causes significant inconvenience and hardship in the day-to-day financial life of an individual, as the lifeline of a business is effectively severed by such orders.Holding that only the disputed amount should remain on hold, the HC directed that the petitioner be permitted to operate the account for all other lawful transactions.The HC directed the SP of Etawah to communicate its order to the bank and ensure that the petitioner’s account at Kotak Mahindra Bank in Khammam is restored immediately.
