Notice not needed to freeze accounts: High Court

Vinodkumar Valluvar and Essar Logistics Limited had challenged the freezing of their accounts by the police. After two division benches took varying views in the case,it was referred to a Full Bench of the court. On behalf of the petitioners,it was contended that the right to natural justice of the accused would be “impinged,hampered,restricted and even denied if prior to or at the time of the seizure of the bank account he is not given notice of the action.”

Arguing on behalf of the state government,public prosecutor PA Pol,however,said that in the current technological set up of banking and financial transactions any person,even from a remote location,can operate his account such as to withdraw or transfer its contents completely to thwart the police action. Hence,giving a notice prior to freezing the bank account would defeat the purpose of investigation.

The petitioners also argued that this action under section 102 of the Criminal Procedure Code (CrPC) defies the legal principal of audi alteram partem (hear the other side). The court,however,was of the view that “like any other property a bank account is freezable. Freezing the account is an act in investigation”. The court held that like any other act,it commands secrecy to preserve the evidence and does not deprive any person of his liberty or his property.

The rule of audi alteram partem “cannot be applied to defeat the ends of justice or to make the law lifeless,absurd,stultifying and self-defeating or plainly contrary to the common sense of the situation and this rule may be jettisoned in very exceptional circumstances where compulsive necessity so demands. “ Inferring thus,the court referred the case back to its original bench.