Priya Gour
Published on: 09 August 2022 at 19:09 IST
The Madras High Court has recently noted that it is essential to report the magistrate regarding freeze of bank account in relation to a proceeding. The court said that it is an essential requirement of Section 102(3) of CrPC.
The bench of Justice GK Ilanthiraiyan ordered de-freezing of the account that was seized during an investigation into a loan fraud and the Magistrate was informed lately.
The Case:
The petitioner was accused of obtaining loan from banks by giving fake address. Other documents were also found to be fabricated. Recovery proceedings were initiated on his failure to repay the loan. The petitioner complained about the respondent banks ordering for freezing his bank accounts, under Sections 120(b), 420, 465, 467, 468, 471 of IPC.
The petitioner submitted that he is neither an accused nor a witness and the accusations are falsely made. The respondents had wrongly instructed to freeze his account. Thus, he claimed that due process has not been followed under Section 102(3) of CrPC.
The respondents disregarded the above submissions. The apex court’s verdict in Teesta Atul Setalvad v. State of Gujarat, was referred to submit that that the provision under Section 102(3) of Cr.P.C. has been adhered to.
“The condition contemplated under Section 102(3) of Cr.P.C. to forthwith report the seizure before the Magistrate has not been complied with as well as it is not known whether superior officer has been informed in compliance with Section 102(2) of CrPC”
The Court held that the petitioner is the account holder and not accused. No prior notice was served to the petitioner about account freezer. Also, the banks had failed to timely inform the jurisdictional Magistrate of the same.
Further, the Court found it fair to set aside the order of seizure of the bank account, since due process was not followed. However, the respondent was free to freeze the account in accordance with law.
