M/S. Annam Murali Fishing Nets vs. The State Of Andhra Pradesh

Held

The Court held that the indefinite freezing of the petitioner's bank account was neither legally permissible nor investigatively productive. It found force in the petitioner's submission that while prosecution is possible if complicity is established, the continued freeze of the bank account does not offer any specific advantage to advance the investigation. The Court noted that it had been over a year since the account was frozen, and the respondents had not provided plausible material to justify its continuation. The Court reasoned that freezing the account severely hardships the petitioner, a businessman, in conducting his daily operations. Therefore, the Court allowed the writ petition, directing the respondents to de-freeze the petitioner's bank account and permit him to operate it. However, this order does not preclude the investigating authority from continuing the investigation or prosecuting the petitioner if he is ultimately found guilty.

Facts

The petitioner, proprietor of M/s Annam Murali Fishing Nets, supplied fishing nets and materials to 92 fishermen who obtained loans under the Mudra Scheme. The loan amounts were directly transferred to the petitioner's bank account. Subsequently, some fishermen filed an FIR alleging they were cheated, receiving less value in nets than promised and that mediators and the bank manager were involved. While the FIR did not initially implicate the petitioner, a remand report later suggested his complicity. The petitioner had filed a quash petition for the FIR, which resulted in a direction to follow Section 41-A of the Cr.P.C. The investigating officer then wrote to the petitioner's bank, requesting transaction details and to freeze the account. The bank complied, freezing the account. The petitioner contends his business is severely handicapped due to the indefinite freeze.

Key Issues

1. Whether the freezing of the petitioner's bank account by the 3rd respondent Bank, based on the 2nd respondent's letter dated 24.09.2018, is illegal, arbitrary, and contrary to law, particularly concerning the invocation of Section 102 of the Cr.P.C. for an indefinite period during a pending investigation? Petitioner's arguments: The petitioner argued that Section 102 of the Cr.P.C. cannot be invoked to freeze a bank account indefinitely, especially when the investigation is ongoing and no plausible material has been presented to justify the continued freeze. Freezing the account severely hampers his day-to-day business operations. If complicity is established, he can be prosecuted, but the freeze is not legally permissible or investigatively productive. Revenue/State's arguments: The judgment does not record any specific arguments made by the revenue or state respondents regarding the legality of freezing the bank account. The court's reasoning is based on the petitioner's submissions and its own assessment of the situation.