Shares Bazaar (GST) vs. Hdfc Bank LTD

Facts

The petitioner, Shares Bazaar, approached the Telangana High Court seeking a writ of mandamus to declare the action of freezing its bank account by HDFC Bank (Respondent No. 1) as arbitrary and illegal, and to consequently set aside the freezing order. The freezing occurred pursuant to a notice issued under Sections 91 and 102 of the Criminal Procedure Code by the State Monitoring Cell, Gujarat State (Respondent No. 3). This notice was in connection with an investigation into financial fraud related to Madhupura Police Station FIR No. 11191010230171/2023. The petitioner's account number 59209966999813 with HDFC Bank was included in the list of accounts to be frozen. The petitioner argued that the freezing was done without notice and violated their rights. The bank, in its counter-affidavit, stated it was merely complying with the instructions from the Gujarat Police.

Held

The Court held that the petitioner's remedy was not to pursue the writ petition before the Telangana High Court. The Court noted that the freezing of the account was a consequence of an investigation initiated by the Gujarat Police, specifically the State Monitoring Cell, Gujarat. The bank, as the first respondent, was merely following the instructions issued to it by the third respondent. Therefore, the Court opined that the relief sought by the petitioner could not be granted in the present writ petition. The Court distinguished the present case from the judgment relied upon by the petitioner, stating that the earlier judgment was not applicable due to jurisdictional reasons, as the investigation was being conducted in Gujarat. The Court disposed of the writ petition, granting liberty to the petitioner to approach the proper forum in Gujarat by filing a fresh petition. No order as to costs was made.

Key Issues

1. Whether the action of Respondent No. 1 (HDFC Bank) in freezing the petitioner's bank account, pursuant to a notice from Respondent No. 3 (State Monitoring Cell, Gujarat), was arbitrary, illegal, and violative of Article 21 of the Constitution of India? Petitioner's arguments: The petitioner contended that the freezing of their account by the bank was arbitrary and illegal, as it was done without providing any prior notice or opportunity to be heard, thereby violating their fundamental rights. They relied on a previous judgment of the High Court in C.R.P. No. 2301 of 2018, dated 20.12.2019, to support their plea for the writ petition to be allowed. Revenue/State's arguments: Respondent No. 1 (HDFC Bank) argued that it was merely acting in compliance with the notice issued under Sections 91 and 102 of the Criminal Procedure Code by the State Monitoring Cell, Gujarat. The notice explicitly requested the freezing of the petitioner's account as part of an investigation into financial fraud. The bank submitted that the notice, along with its counter-affidavit, indicated the police's request to freeze the account.