Madras HC Defreezes Selvaraj’s Agri-Loan Accounts In TNPID Probe, Allows Listed Others To Operate But Bars Withdrawal Of Freeze-Date Balances

In brief

The question

1. Whether the petitioner was entitled to have the frozen bank accounts defreezed or to operate them while the investigation remained pending.

The court held

The three specified loan accounts were to be defreezed; the petitioner could operate the specified jewel-linked loan account only to redeem the jewels, which were to remain withheld pending investigation and the investigating authority’s no-objection; and the other specified accounts could be operated subject to preservation of their balances as at the date of freezing.

It also directed

The petitioner was permitted to seek further relief depending on the progress of the criminal proceedings, and the prosecution retained liberty to take further steps if it considered the funds to belong to the accused.

01Facts

The petitioner sought a writ of mandamus directing the HDFC and Axis Bank branch managers to consider his representation dated 1 May 2026 and defreeze accounts subject to Freeze ID 11033457.

p. 2

He submitted that he had resigned from Amaze Properties India Limited and certain partnerships in 2021, and that some frozen funds—including funds in a partnership account—were unrelated to the alleged crime.

p. 2

The prosecution opposed general defreezing, stating that the petitioner was an accused under the TNPID Act, that the investigation into the accounts and ownership of funds was ongoing, and that funds potentially belonging to the accused should remain available for distribution to victims.

pp. 3–4

It did not object to defreezing the specified loan accounts.

pp. 3–4

The Court considered the requested relief account by account.

pp. 5–8

02Issues

i.1. Whether the petitioner was entitled to have the frozen bank accounts defreezed or to operate them while the investigation remained pending.

pp. 2–4

ii.2. Whether different directions should be made for the loan accounts, the account linked to pledged jewels, and the other personal and partnership accounts.

pp. 5–8

03Law Applied

The petition invoked the High Court’s jurisdiction under Article 226 of the Constitution to seek mandamus.

p. 2

The prosecution relied on the TNPID Act, asserting that proceeds of crime and properties of an accused were liable to attachment; however, the judgment identifies no specific provision of that Act, cites no precedent, and does not determine the Act’s application as a general legal rule.

p. 3

The Court resolved the matter through account-specific directions intended to permit limited operation of certain accounts while preserving disputed balances pending investigation.

pp. 5–8

04Reasoning

The Court accepted the prosecution’s lack of objection as sufficient to direct defreezing of three identified agricultural loan accounts.

pp. 5–6

For another loan account, it allowed operation only to the extent necessary to redeem the jewels, while directing that the jewels not be released until the investigation was complete and the investigating authority had no objection.

p. 6

As to other accounts, the Court considered ownership and the source of funds unresolved and preserved the balances existing on the date of freezing.

pp. 6–8

It nevertheless permitted operation of the accounts specifically listed in its order, subject to the restriction that the balance standing on the freezing date could not be withdrawn.

pp. 6–8