High Court Says Entire Bank Account Cannot Be Frozen During Investigation Without Justification:

High Court Says Entire Bank Account Cannot Be Frozen During Investigation Without Justification

In this matter, the petitioner, Devraj Singh Shaktawat, approached the  High Court through a criminal writ petition to challenge the freezing of his bank account at the IDBI Bank, Circuit House Branch in Bhilwara. The account had been completely blocked by investigative agencies during an inquiry into suspected fraudulent transactions.

The petitioner’s counsel argued that a blanket freeze on the entire account was disproportionate, as it stripped him of the funds necessary for his day-to-day survival and business activities. A key point of contention was that the original freezing order failed to specify the exact "tainted" amount or provide a clear timeline for the restriction. As the case progressed, it became evident that while only a small portion of the funds was actually under suspicion, the bank had nonetheless locked the entire account.

Issue Before Court: The court was asked to determine whether investigating authorities have the right to freeze a citizen's entire bank account without identifying a specific disputed sum or establishing a direct, documented link to a cognizable offense.

HC Held: The Rajasthan High Court disposed of the petition by granting the petitioner partial relief. While the Bench acknowledged the power of authorities to freeze accounts during an active investigation, it ruled that such power cannot be exercised in a "blanket" or arbitrary fashion.

The Court observed that freezing an entire account without notifying the holder of the specific disputed amount creates unnecessary hardship. The Court noted that such actions can infringe upon the fundamental rights to life and profession guaranteed under Articles 21 and 19(1)(g) of the Constitution of India.

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