Allowed

Axis Bank Ltd. v. the State of Karnataka by

Karnataka HC11 Nov 2024/10448/2024

Case brief

AI extract

What is this about?

The High Court allowed the bank's petition challenging an order directing it to unfreeze customer accounts and transfer funds to the complainant. The Court set aside the Magistrate's order and remanded the matter for fresh consideration, mandating that the bank be afforded a prior opportunity of hearing before any release of funds is directed.

What did the court decide?

Set aside of the order dated 26.02.2024 passed by the 45th Additional Chief Metropolitan Magistrate, Bengaluru; matter remanded for fresh consideration after affording opportunity of hearing to the pe

Axis Bank Ltd. Vs the State of Karnataka by — Banking and Recovery | Karnataka HC (2024)

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 11^TH DAY OF NOVEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA CRIMINAL PETITION NO. 10448 OF 2024

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BETWEEN:

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AXIS BANK LTD., A BANKING COMPANY CARRYING ON THE BANKING BUSINESS UNDER THE BANKING REGULATION ACT, 1949 INCORPORATED UNDER THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT ‘TRISHUL’ 3^RD FLOOR, OPPOSITE SAMARTHESHWAR TEMPLE LAW GARDEN, ELLIS BRIDGE AHMEDABAD - 380 006 GUJARAT

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Digitally signed by NAGAVENI Location: HIGH COURT OF KARNATAKA

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AND HAVING ONE OF ITS BRANCH OFFICE AT AXIS BANK LIMITED, GROUND FLOOR PADMANABHA COMPLEX MAIN ROAD, OPP: NEW BUS STAND MARTHANDAM, DIST. KANYAKUMARI TAMIL NADU - 629 165. AXIS BANK LTD., GROUND FLOOR, GIANTS CHOWK BESIDES GAYATRI BOOK DEPOT WARUD, TALUKA WARUD, DIST. AMRAVATI MAHARASTRA - 444 906.

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REPRESENTED BY ITS BRANCH HEAD MR. VIBHAS ANAND GAJWAY

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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AGED ABOUT 44 YEARS

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ALSO AT S/O ANAND GAJWAY BEHIND N.M.C.MANGALWARI ZONE OFFICE 371 NEW COLONY NAIBASTI NAGPUR, MAHARASHTRA – 440 001.

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…PETITIONER

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(BY SRI. UNNIKRISHNAN M., ADVOCATE)

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AND:

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THE STATE OF KARNATAKA BY SOUTH CEN POLICE STATION SOUTH DIVISION BENGALURU DISTRICT REPRESENTED BY SPP HON’BLE HIGH COURT OF KARNATAKA BENGALURU – 01.

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CHETHAN M., S/O ASHOK KUMAR M., AGED ABOUT 45 YEARS NO.1856, 33^RD CROSS 10^TH MAIN, BSK 2^ND STAGE BENGALURU – 560 070 KARNATAKA.

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…RESPONDENTS

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(BY SRI. B.N.JAGADEESHA, ADDL. SPP FOR R1)

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THIS CRL.P IS FILED U/S.482 OF THE CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 26/02/2024 PASSED BY THE HONBLE 45TH ADDL. CHIEF METROPOLITAN MAGISTRATE, BENGALURU, IN CRIME NO. 279/2024 I.E. ANN-C IN TERMS OF WHICH, THE PETITIONERS ARE DIRECTED TO DEFREEZE THE SAVINGS/CURRENT ACCOUNTS BEARING A/C NO.

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3 - NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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923020027111073 AND A/C NO. 922020053126215 MAINTAINED IN THE PETITIONERS BANK AND TRANSFER THE SAME TO THE ACCOUNT OF THE R2.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA

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ORAL ORDER

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Heard Sri Unnikrishnan M., learned counsel for the petitioner and Sri. B.N. Jagadeesha, learned Additional State Public Prosecutor appearing for respondent No.1.

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Learned counsel appearing for the petitioner

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submits that in all identical cases coordinate benches have allowed the petitions and remitted the matter back to the office of the learned Magistrate to permit the petitioner to file his objections with liberty to appear and then consider applications filed under Sections 451 and 457 of Code of Criminal Procedure, 1973.

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I deem it appropriate to quote the orders so passed in Crl.P.No.1787/2023 dated 14.12.2023:

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"ORDER

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The Petitioner which is a Financial Institution is before this Court challenging the order passed

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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by 1st Additional Chief Metropolitan Magistrate on an application filed under Sections 451 and 457 of Cr.P.C. by the complainant/respondent No.2 directing the petitioner-Bank to defreeze the amount belonging to the accused and transfer the said amount to the bank account of the complainants/respondent No.2.

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2. The petitioner’s concern is that the order passed by the Jurisdictional Magistrate cannot be executed because it surpasses the specified release amount, and numerous courts across the Country have issued directives to the investigating agencies to unfreeze the bank accounts of the accused therein.

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3. Learned Special Public Prosecutor on instructions would suggest that the matter may be remanded to the Jurisdictional Courts to consider the application filed under Sections 451 and 457 of Cr.P.C. afresh, by affording an opportunity of hearing to the petitioner.

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4. Admittedly, multiple cases are registered against the accused herein within the State and across the country and there are multiple orders passed by the Jurisdictional Magistrates directing the petitioner to unfreeze the account of the accused and transfer the amount to the bank account of the complainants. The passing of multiple orders has caused difficulty to the petitioner/bank in executing the said order, since the amount ordered to be released in some accounts exceeds the amount available in the subject accounts of the accused. Therefore, the learned Magistrate before passing an order directing the petitioner to unfreeze and transfer the amount to the accounts of the complainants, is required to hear the petitioner. Accordingly, I pass the following:

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ORDER

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i. Criminal Petition is allowed .

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ii. The order dated 26.11.2021 passed by the 1st Additional Chief

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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Metropolitan Magistrate, Bengaluru in Cr.No.452/2021 is hereby set aside.

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iii. Matter is remanded to 1st Additional Chief Metropolitan Magistrate, Bengaluru to reconsider the application filed under Sections 451 and 457 of Cr.P.C. afresh, after giving the opportunity of hearing to the petitioner.

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iv. Till the application is disposed of, the petitioner/bank is restrained from releasing the money in favour of any person from the subject account."

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In Crl.P.No.13487/2023 c/w. Crl.P.Nos. 10201/2023, 12091/2023, 13483/2023, 13489/2023, 13611/2023, 13627/2023, 13940/2023, 13955/2023, 98/2024, 128/2024, 356/2024, 357/2024 dated 12.02.2024:

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"7. Having heard the arguments of both side, perused the records. The Trial Courts have passed the impugned orders in these cases for de-freezing the accounts of the customers and releasing the amounts, without giving opportunity of hearing to the petitioner - Bank. If the orders of the Magistrate are not complied with, it amounts to violation of court order and they face contempt. Therefore, before de-freezing the accounts, it is necessary for the Trial Court to give opportunity to the petitioner of being heard in the matter and then pass appropriate orders since some of the customers do not have any amounts in their accounts and some of the customers are having lesser amount or zero balance. Hence, it is necessary for this Court to set aside the impugned orders with liberty to the petitioner to approach the various courts and after hearing the petitioner - Bank, the Courts can pass appropriate orders. 8. Accordingly, I pass the following:

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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ORDER

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(i) These Criminal Petitions are allowed. (ii) The impugned orders passed by the Trial Court given in the tabular form below are hereby set aside:

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Sl. No.	Crl. P. No.	Impugned order dated	Addl. Chief Metropolitan Magistrate	CR. No.
1	13487/2023	17/02/2023	I A.C.M.M.	1213/2022
2	10201/2023	07/07/2023	C.J.M., BANGALORE RURAL DIST.	Crl. Misc. No.177/2022
3	12091/2023	05/01/2023	II Addl. Sr. Civil Judge and JMFC Chikkaballapura	CR. No. 45/2022
4	13483/2023	13/10/2023	I A.C.M.M.	CR. No. 200/2023
5	13489/2023	11/08/2023	I A.C.M.M.	CR. No. 124/2023
6	13611/2023	30/09/2023	I A.C.M.M.	CR. No. 196/2023
7	13627/2023	12/04/2023	I A.C.M.M.	CR. No. 02/2023
8	13940/2023	18/07/2023	I A.C.M.M.	CR. No. 1060/2022
9	13955/2023	15/08/2023	I A.C.M.M.	CR. No. 05/2023
10	98/2024	08/08/2023	I A.C.M.M.	CR. No. 1051/2023
11	128/2024	24/07/2023	I A.C.M.M.	CR. No. 969/2022
12	356/2024	31/07/2023	C.J.M., BANGALORE RURAL DISTRICT	CR. No. 197/2023
13	357/2024	07/06/2023	I A.C.M.M.	CR. No. 136/2023

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(iii) The Trial Court is directed to hear the petitioner and the respondents and dispose of the matters in accordance with law, afresh.

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(iv) Till disposal of the cases by the Trial Court, the petitioner-Bank is restrained from releasing the amounts of de-freezed accounts of customers or complying the order of the Magistrate."

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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In the light of the orders passed by the coordinate benches as quoted hereinabove, as also same was being heard in other cases, I deem it appropriate to dispose of this petition by passing the following:

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ORDER

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i. Criminal Petition is allowed .

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ii. The order dated 26.02.2024, passed by the 45^th Additional Chief Metropolitan Magistrate, Bengaluru, in Cr.No.279/2024 is hereby set aside.

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iii. Matter is remanded to 45^th Additional Chief Metropolitan Magistrate, Bengaluru, to reconsider the application filed under Sections 451 and 457 of Cr.P.C. afresh, after affording opportunity of hearing to the petitioner.

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iv. Till the application is disposed of, the petitioner/bank is restrained from releasing the money in favour of any person from the subject account.

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NC: 2024:KHC:45573 CRL.P No. 10448 of 2024

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v. In the light of the issue pending for such consideration, I deem it appropriate to direct the concerned Court to dispose the application so filed under Sections 451 and 457 of Cr.P.C. as expeditiously as possible, at any rate, within eight weeks from the date of receipt of copy of this order.

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Ordered accordingly.

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I.A.No.1/2024 is disposed, as a consequence.

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Sd/(M.NAGAPRASANNA) JUDGE

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NVJ List No.: 1 Sl No.: 424 CT:SS

Axis Bank Ltd. v. the State of Karnataka by

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Axis Bank Ltd. v. the State of Karnataka by

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