Kerala HC Limits Freeze On Man’s Bank Account To Six Disputed Entries, Sets Aside Order For Probe Into Other Credits

The appellant challenged the freezing of his bank account on the basis of a requisition from the second respondent, the Puducherry Cyber Crime Cell.

He said the disputed credits were sums given to him by his cousin and her husband, and sought either unfreezing of the account or restriction of the freeze to the disputed amounts

The Single Judge dismissed the writ petition and additionally directed the police to investigate the appellant’s account, noting other large credits.

The appellant appealed against that direction and the freezing order.

The State submitted that, as of the hearing, the second respondent had issued no letter implicating the appellant or his account, and that the freeze appeared to relate to six disputed entries.

The Court applied the principle that a court cannot independently order an investigation against a person solely because account entries suggest that funds may be proceeds of crime, particularly where no police officer has alleged that the person is involved in an offence; that inference, without more, is only a presumption at that stage.

It also held that a bank’s freeze pursuant to a police requisition is limited to the disputed amounts identified in that requisition, without prejudice to the bank’s obligation to act on any further requisition made by a competent police officer, subject to the account-holder’s legal rights.

The record showed that no police officer had implicated the appellant in a crime, and the State confirmed that the requisition concerned six disputed entries. The other credits noted by the Single Judge, without an allegation or investigation by the police, did not justify a court-directed investigation; the direction was therefore unsustainable.

Since the freeze was linked to the six disputed entries, it could not extend to the rest of the account.

It directed that the account remain frozen only to the extent of the disputed entries covered by the second respondent’s requisition, and not beyond. The bank must comply with any further requisition by the second respondent or another competent police officer, subject to the appellant’s rights in law.