After Trial Acquittal, Madras HC Orders Customs To Reassess Fishing YouTuber’s Frozen Family Accounts, Says Pending NDPS Appeal Alone Can’t Justify Indefinite Freeze

In brief

The question

1. Whether the continued freezing of the petitioner’s and his parents’ bank accounts could be justified solely by the original suspicion and the pendency of the Department’s appeal against the acquittal.

The court held

The Court set aside the impugned order dated 27 December 2023 and disposed of the petition with directions that the first respondent reconsider the petitioner’s representation, independently examine the petitioner’s and his parents’ accounts, and identify any amounts supported by material as illegally acquired property.

It also directed

If no valid statutory confirmation or other legally sustainable proceeding justified restraint, the authority was to issue instructions to defreeze the accounts; if particular amounts were liable to proceedings, it was to follow the prescribed procedure and afford the petitioner and his parents a personal hearing.

A reasoned decision was to be made within six weeks, and the banks were to act on the authority’s fresh communication.

01Facts

Customs investigated an alleged seizure of approximately 270.370 kg of ganja from a fishing boat associated with the petitioner and filed a final report against him and three others under Sections 8(c) read with 20(b)(ii)(C), 25, 28 and 29(1) of the NDPS Act.

pp. 3–4

During the investigation, the petitioner’s and his family members’ bank accounts were frozen under Section 68F of the NDPS Act on the basis of suspected links to proceeds of illicit trafficking.

p. 4, 6

The Special Court acquitted all accused on 15 September 2023; the Department subsequently filed an appeal against the acquittal.

pp. 5–6

After the banks declined to defreeze the accounts without a No Objection Certificate from Customs, the petitioner challenged the second respondent bank’s order dated 27 December 2023 and sought defreezing of the accounts.

p. 2, 5

02Issues

i.1. Whether the continued freezing of the petitioner’s and his parents’ bank accounts could be justified solely by the original suspicion and the pendency of the Department’s appeal against the acquittal.

¶ 11–13 · pp. 7–9

ii.2. Whether the first respondent was required to reconsider the petitioner’s request by independently assessing whether identifiable amounts in each account were legally liable to restraint under Section 68F of the NDPS Act.

¶ 13–15 · pp. 8–10

03Law Applied

Section 68F of the NDPS Act authorises restraint of property suspected to be illegally acquired or derived from illicit trafficking, but such restraint must satisfy the statute’s requirements and cannot be arbitrary or continued indefinitely without a legally sustainable basis.

¶ 11, 13 · pp. 7–9

Mere accusation under the NDPS Act does not establish that all funds in an accused’s accounts are illegally acquired; nor may a relative’s accounts be restrained solely because of the relationship.

¶ 11–12 · pp. 7–8

The pendency of an appeal against acquittal, without more, is not sufficient justification for indefinite freezing.

¶ 12 · p. 8

Provisions in the judgment · 5 · Linked ones open on LawLens

Narcotic Drugs and Psychotropic Substances Act, 1985 Section 8 Section 20 Section 25 Section 28 Section 29

04Reasoning

The Court considered that the accounts had been frozen during the investigation, but the petitioner relied on the acquittal and the absence of evidence connecting the accounts or their transactions to the alleged offence.

¶ 6, 12 · pp. 4–5, 8

Although the Department’s appeal remained pending, that circumstance alone did not justify continued restraint. The Court also rejected treating the parents’ accounts as suspect merely by association with the petitioner.

¶ 12 · p. 8

Because releasing funds potentially connected with illicit trafficking could prejudice statutory proceedings, the Court declined to order unconditional defreezing; instead, it required an account-by-account assessment of the statutory basis for continued restraint.

¶ 13 · p. 9