Landmark judgments on the remedy when police freeze a bank account under Section 102 CrPC.

Landmark Judgments on Freezing of Bank Accounts by Police (Remedy & Principles)

1. Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372

Court: Supreme Court of India
Principle:

• Police cannot freeze a bank account without proper justification and recorded reasons under Section 102 CrPC.
• It is mandatory to inform the Magistrate immediately.
• Freezing affects the right to livelihood; it must be proportionate and fair.
  Remedy: Certain accounts were ordered to be de-frozen as the police failed to justify the freeze.

2. Swaran Sabharwal v. Commissioner of Police, 1988 Cri LJ 241 (Delhi HC)

Principle:

• Freezing of a bank account is permissible only if the money is directly linked to the alleged offence.
• Freezing the entire account without evidence violates Article 300A (Right to Property).
  Remedy: Court ordered de-freezing.

3. M.T. Enrica Lexie v. Doramma, (2012) 13 SCC 780

Principle:

• The Supreme Court clarified that property (including bank accounts) can be seized under Section 102 CrPC only if it is suspected to be connected with an offence.
• Freezing beyond that scope violates due process.

4. Rajesh Kumar v. State of Haryana, 2019 SCC OnLine P&H 1691

Court: Punjab & Haryana High Court
Principle:

• Police must report the freezing to the Magistrate and give notice to the account holder.
• The person should be given a chance to explain the source of funds.
  Remedy: Freezing was quashed for non-compliance with Section 102 CrPC.

5. Jayant v. State of Madhya Pradesh, (2021) SCC OnLine MP 3167

Principle:

• Freezing of a bank account without an FIR or link to an investigation is illegal.
• The investigating officer must record reasons in writing and report them to the Magistrate.
  Remedy: Freeze order set aside.

6. Axis Bank v. State of Maharashtra, 2017 SCC OnLine Bom 9102

Court: Bombay High Court
Principle:

• Power under Section 102 CrPC must be exercised strictly and with caution.
• Freezing the entire account merely on suspicion is unlawful; only offence-related funds can be held.
  Remedy: Partial release of frozen accounts ordered.

7. Kaushalya Bai v. State of Maharashtra, 2018 SCC OnLine Bom 1815

Principle:

• The investigating officer cannot freeze joint or family accounts without establishing a nexus to the offence.
  Remedy: De-freezing of unrelated accounts directed.

8. ICICI Bank Ltd. v. State of Maharashtra, 2020 SCC OnLine Bom 248

Principle:

• A bank cannot freeze accounts without a lawful written order from a competent authority.
• Police must follow due process and proportionality.
  Remedy: Directions issued for de-freezing.

9. T. Subbulakshmi v. State of Tamil Nadu, 2017 SCC OnLine Mad 24679

Court: Madras High Court
Principle:

• Freezing a bank account without prior notice or copy of FIR/order is a violation of natural justice.
  Remedy: De-freezing ordered; compensation recommended.

10. Om Prakash Sharma v. State of Uttar Pradesh, 2020 SCC OnLine All 1019

Principle:

• If freezing is disproportionate or not reported to the Magistrate, it is illegal and liable to be set aside.
  Remedy: Court quashed the freezing order.

Summary Table

 Key Takeaways

• Section 102 CrPC allows freezing only if property is linked to an offence.
• Police must report to the Magistrate immediately after freezing.
• Notice and opportunity must be given to the account holder.
• Courts can order de-freezing or limited access if freezing is arbitrary or disproportionate.
• Violation of due process amounts to infringement of Article 300A (Right to Property) and Article 21 (Right to Livelihood).