M/S Gahna Jewelers Through Its Proprietor Sharad Mangal vs. Hdfc Bank Limited

Held

The Court, without entering into the merits of the rival claims or examining the legality of the action impugned, held that the ends of justice would be adequately served by securing the disputed amount pending investigation. Accordingly, the Court directed Respondent No. 1-Bank to keep the disputed amount of Rs. 18,65,300/-, which was withheld in the petitioner's account pursuant to the instructions of Respondent No. 2, in a Fixed Deposit Receipt (FDR) with a nationalized bank, if not already invested. The FDR was to be created for an appropriate tenure to earn the highest applicable interest rate and renewed as required, until further orders from a competent Judicial Magistrate or other competent Court/authority. The amount in FDR would remain subject to the outcome of the investigation or any subsequent proceedings and would not be released or dealt with except by orders of a competent court. The Court explicitly stated that it had not expressed any opinion on the merits of the matter. The writ petition was disposed of with these directions.

Facts

The petitioner, M/s Gahna Jewelers, a business firm dealing in jewellery, filed a writ petition seeking the release of Rs. 18,65,300/- withheld from its bank account (Account No. 50200069226431) maintained with HDFC Bank Limited (Respondent No. 1). This action was taken on the instructions of Respondent No. 2. The petitioner stated that it had received sale consideration through RTGS for goods sold against valid tax invoices and had duly discharged its GST liability. The petitioner had not been arrayed as an accused, nor had it received any intimation of involvement in a criminal case. The petitioner relied on a previous order of the High Court in a similar case, M/s Ankit Jewellers Vs. State Bank of India & Others (W.P. No. 1100/2026), where a similar dispute was resolved by directing the disputed amount to be kept in a fixed deposit.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, should direct the release of funds withheld by a bank on the instruction of an investigating agency, without prejudice to the ongoing investigation? Petitioner's Argument: The petitioner argued that the amount was withheld despite the petitioner having discharged its GST liability and not being involved in any criminal case. They relied on a previous High Court order in a similar matter (M/s Ankit Jewellers Vs. State Bank of India & Others) which directed the disputed amount to be kept in a fixed deposit, allowing the petitioner to operate the account. The petitioner sought a similar direction to protect all parties' interests. Respondents' Argument: The respondents (HDFC Bank and others) had no objection to an order that protected the disputed amount without prejudice to the rights and contentions of either party.