Important case law on Bank Account Unfreeze Himachal Pradesh

In the case of Aeronfly International Private Limited vs. State of Himachal Pradesh and Others, adjudicated on September 13, 2024, the Himachal Pradesh High Court addressed the legality of freezing bank accounts under Section 91 of the Criminal Procedure Code (Cr.P.C.).

Background:

Aeronfly International Private Limited challenged a notice dated May 14, 2024, issued by the Cyber Cell, Kullu, directing ICICI Bank to freeze two of the company’s bank accounts. This action was taken following a complaint alleging that ₹10,000 had been fraudulently transferred to Aeronfly’s account. The Cyber Cell invoked Section 91 Cr.P.C. to justify the freeze.

Court’s Findings:

Justice Sandeep Sharma observed that Section 91 Cr.P.C. empowers an investigating officer to summon documents or records but does not authorize the freezing of bank accounts. The appropriate provision for such action is Section 102 Cr.P.C., which pertains to the seizure of property, including bank accounts, and mandates that the seizure be reported to a Magistrate promptly. In this instance, the Cyber Cell did not comply with the procedures outlined in Section 102 Cr.P.C.

Judgment:

The High Court ruled that the Cyber Cell’s directive to freeze Aeronfly’s bank accounts under Section 91 Cr.P.C. was unauthorized and unsustainable. Consequently, the court quashed the freeze order and instructed the immediate unfreezing of the accounts.

Implications:

This judgment clarifies that investigating agencies must adhere to the correct legal provisions when freezing bank accounts. Specifically, they must utilize Section 102 Cr.P.C. and ensure prompt reporting to a Magistrate, thereby safeguarding individuals’ rights against unauthorized account freezes.