Delhi HC Flags Blanket Freezing Of Bank Accounts, Asks Govt To Frame Policy

(MENAFN- IANS) New Delhi, Feb 27 (IANS) Stressing the need to balance the rights of a complainant and an innocent bank account holder, the Delhi High Court has cautioned enforcement agencies against blanket freezing of accounts and asked the Centre to frame a policy on such matters.

Justice Manoj Jain asked enforcement agencies to act with care, caution and compassion in cases that require freezing of bank accounts, underlining the hardship it may pose to an innocent bank account holder.

The court asked the Union Ministry of Home Affairs to frame a uniform policy, standard operating procedures, and guidelines to ensure that such matters are handled with compassion.

The court made the observations while hearing a case in which enforcement agencies froze a bank account of a company due to a suspicious entry of Rs 200.

"Such blanket measures, if taken recourse to, without offering any reason, can certainly play havoc with the financial concerns of such account holders," Justice Jain said in a verdict delivered recently.

"It is, therefore, high time that the investigating/law enforcement agencies, in the context of freezing bank accounts, act with requisite care, caution and yes, compassion as well," he said.

Instead of freezing the bank account, the court said, the authorities should explore the possibility of marking a lien on the disputed amount to mitigate the undue hardship caused to account holders and ensure the disputed amount was secured.

"In such cyber-crimes, if any fraudster cheats a complainant and with the help of cheated money when such a fraudster buys something, the police, chasing such money-trail, directs freezing the bank accounts of all concerned and in the process, many innocent recipients have to bear the brunt for no fault of theirs," the court said.

The court accepted that enforcement agencies were within their rights to recommend freezing the entire bank account, but they must assign reasons for it.

A blanket step like this may pose grave difficulties for small vendors, jeopardise their lives, lead to the dishonouring of several cheques issued by the firm, and disrupt business operations, the court said.

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