Sri. Venkataramana Fish Nets Stores vs. The State Of Andhra Pradesh

Held

The Court allowed the writ petition. It held that the indefinite freezing of the petitioner's bank account for over a year, without plausible material to justify its continuation, was not legally permissible. The Court found force in the petitioner's submission that while he could be prosecuted if his complicity was established after investigation, the continued freezing of his account offered no specific advantage to the investigation. On the contrary, it caused severe hardship to the petitioner's business operations. Therefore, the Court directed the respondents to de-freeze the petitioner's bank account and permit him to operate it. However, the Court clarified that this order did not preclude the 2nd respondent from continuing the investigation or prosecuting the petitioner if he was ultimately found guilty.

Facts

The petitioner, proprietor of M/s Sri Venkataramana Fish Nets Stores, supplied fishing nets and materials to fishermen who obtained loans under the Mudra Scheme. The Union Bank of India transferred loan amounts directly to the petitioner's account. Subsequently, some fishermen filed an FIR alleging they were cheated, receiving less material than promised, and implicating mediators and a bank manager. The petitioner was later implicated in a remand report. The petitioner's earlier quash petition resulted in a direction to follow Section 41-A of Cr.P.C. The 2nd respondent (investigating authority) then wrote to the 3rd respondent (bank) requesting transaction details and to freeze the petitioner's bank account, which the bank did. The petitioner argues the freezing is illegal and detrimental to his business, as he supplied goods as per invoices and paid GST.

Key Issues

1. Whether the 2nd respondent's action of freezing the petitioner's bank account under Section 102 of the Code of Criminal Procedure, 1973 (Cr.P.C.) is illegal, arbitrary, and contrary to law, given the pending investigation into an FIR where the petitioner's direct involvement in cheating is not explicitly alleged in the initial complaint. Petitioner's arguments: The petitioner contends that Section 102 Cr.P.C. is being misused to freeze his bank account indefinitely, causing severe hardship to his business. He argues that if his complicity is established after investigation, he can be prosecuted, but the freezing of his account is not legally permissible or investigatively productive. He asserts that his role was limited to supplying goods as per invoices and paying taxes, and he is not concerned with subsequent events. Revenue/State's arguments: The judgment does not record any specific arguments made by the respondents (2nd and 3rd respondents) in defense of the freezing of the bank account.