The increasing problem faced by Indian businesses and companies is the freezing of bank accounts by investigating authorities in a mechanical manner. These actions often rely on mere allegations or suspicions of tainted funds being deposited by accused individuals or suspects involved in questionable financial dealings into the accounts of a legitimate party, without requiring the accused's involvement in the offense or even mention in the First Information Report.
To comprehend the extent of the investigating authorities' power to freeze bank accounts, one must delve into the source of this authority, which can be traced back to Section 102 of the Code of Criminal Procedure, 1973 (CrPC). There are several remedies available:
Before the Investigating Authority: Section 102(3) of the CrPC allows the investigating authority to decide whether to return seized property, including frozen bank accounts, during the investigation.
This decision depends on whether the continued retention of the property is necessary for the investigation and may be conditional upon the person executing a bond undertaking to produce the property in court when required. The aggrieved party must cooperate with the investigating authority and provide supporting evidence to seek this remedy.
Before the Magistrate: If the Investigating Authority does not provide relief, parties can approach the relevant Magistrate under either Section 451 or Section 457 of the CrPC, both of which allow for the release of seized property in certain circumstances:
a. Section 451: This section empowers the Magistrate to order the release of frozen bank accounts if the party executes a bond for the amount in question before the Magistrate and agrees to produce the funds as directed by the Magistrate. The party must file an application before the Magistrate, providing all necessary information and documentation to support their claim.
b. Section 457: Under this section, the Magistrate can deliver the seized property, including frozen bank accounts, to the rightful owner. An application made under Section 457 of the CrPC is maintainable for the release of a frozen bank account. Like Section 451, the aggrieved party must file an application and provide supporting information and documentation.
Before the High Court: If the Magistrate does not grant relief, another option available to aggrieved parties is to invoke the writ jurisdiction of the High Courts. The party can allege that the seizure of their bank account violates their right to livelihood under Article 21 of the Constitution or is arbitrary and a violation of Article 14.
