Zico Environment Solutions PVT LTD And Anr. vs. Punjab National Bank And Ors

Held

The Court, after hearing arguments, directed that petitioner No.1 company would be entitled to pay its stipulated statutory dues from the frozen bank accounts. These statutory dues were specifically listed in paragraph 17 of the writ petition. The payment was to be made from the account held with Yes Bank (respondent No.2), which was directed to permit such payments. Petitioner No.1 was also required to provide respondent No.3 with the details of the calculation of the GST dues as specified in paragraph 17 of the writ petition. The parties were directed to cooperate in the payment of these statutory dues. The Court noted that the NCLT petition filed by petitioner No.2 against respondent No.3 had been dismissed for non-prosecution, but the petitioner intended to take steps for its revival. All other issues and disputes between the parties were to be adjudicated before the NCLT or an appropriate forum. The writ petition was disposed of with these directions.

Facts

The petitioners, Zico Environment Solutions Pvt Ltd (petitioner No.1) and its director (petitioner No.2), filed a writ petition challenging the freezing of petitioner No.1's current accounts by Punjab National Bank (respondent No.1) and Yes Bank (respondent No.2). The freezing was initiated at the instance of respondent No.3, who is the estranged husband of petitioner No.2 and a director with a majority shareholding in petitioner No.1. Petitioner No.2 and respondent No.3 were married in 2011, and petitioner No.1 was incorporated in 2012. Matrimonial discord led to complaints, resulting in the freezing of the company's bank accounts. Proceedings were also pending before the National Company Law Tribunal (NCLT) filed by petitioner No.2 against respondent No.3. The NCLT petition was, however, dismissed for non-prosecution.

Key Issues

1. Whether the freezing of the current accounts of petitioner No.1 by respondents No.1 and No.2 at the instance of respondent No.3 is legally sustainable, considering the ongoing matrimonial dispute and the nature of the company's operations. (Mixed question of law and fact, concerning banking regulations and company law). Petitioner's contention: The petitioners argued that the freezing of the company's accounts was an arbitrary action, particularly in light of the matrimonial dispute between petitioner No.2 and respondent No.3, and that the company should be allowed to meet its statutory obligations. They also highlighted that the NCLT petition filed by petitioner No.2 against respondent No.3 had been dismissed for non-prosecution, but steps were being taken for its revival. Revenue/State's contention: The judgment does not record specific arguments from the revenue or state authorities regarding the legality of the freezing. The arguments primarily revolved around a settlement for the payment of statutory dues.