Jodhpur: Rajasthan High Court‘s principal bench at Jodhpur has held that banks cannot mechanically freeze entire accounts on directions of an investigating agency. The court ruled that such action must be proportionate and limited to the disputed amount. The order came in a case involving Mumbai-based filmmaker Vikram Bhatt and co-petitioner Shwetambari Bhatt, his wife.Hearing the matter on March 19, Justice Farjand Ali passed the order, which was uploaded on March 28. The court directed that only the allegedly disputed sum of Rs 30 crore be kept under restraint, while the remaining funds in the petitioners’ accounts must remain fully available.An FIR was lodged in Udaipur by Ajay Murdiya, alleging fraud to the tune of Rs 30 crore against the Bhatt duo. Acting on instructions from the investigating officer, banks froze all savings accounts of the petitioners.Counsel for the petitioners argued that the amount in question was received as legitimate professional fees and that the police action of freezing all accounts was taken without following due process. It was further submitted that the blanket freeze paralysed the petitioners’ financial lives, preventing them from meeting daily household expenses, paying employee salaries, servicing loan instalments, and fulfilling business and medical obligations.After examining the record, the court noted that the alleged disputed amount was approximately Rs 30 crore and observed that freezing a bank account is an “extraordinary measure” that must be exercised sparingly and with due safeguards.The court held that freezing accounts in a “mechanical manner” without establishing a prima facie link between the account and a cognisable offence amounts to an infringement of fundamental rights under Article 21 (right to life and personal liberty) and Article 19(1)(g) (freedom to carry on trade or business) of the Constitution.Referring to a Supreme Court order, the court underscored that any procedure depriving a person of life or liberty must be fair and not arbitrary. It added that in contemporary times, a bank account is not merely a repository of money but the lifeline of an individual’s economic existence.The court directed HDFC Bank’s Lokhandwala Circle branch and IDFC First Bank’s Andheri West branch to immediately defreeze two accounts each of the petitioners.
