Allowed

Axis Bank Ltd. v. the State of Karnataka

Karnataka HC19 Nov 2024CRL.P/11087/2024

Case brief

AI extract

What is this about?

Bank challenged a Magistrate's order directing defreezing of an accused's account without hearing it. Relying on coordinate-bench orders, the Court set aside the order and remanded the matter for fresh consideration of the Sections 451 and 457 applications after hearing the bank.

What did the court decide?

Order dated 11.07.2024 set aside; application under Sections 451 and 457 Cr.P.C. remanded for reconsideration after hearing the petitioner-bank within eight weeks; release of funds from subject accoun

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

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NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF NOVEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA CRIMINAL PETITION NO. 11087 OF 2024

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BETWEEN:

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Digitally signed by KAVYA G Location: High Court of Karnataka

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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', 3RD FLOOR, OPPOSITE SAMARTHESHWAR TEMPLE, LAW GARDEN, ELLIS BRIDGE, AHMEDABAD - 380 006, GUJARAT. AND HAVING ONE OF ITS BRANCH OFFICE AT GROUND FLOOR, PLOT NO. 1163 MI, PWD ROAD, GHOSI, MAUZA, JAMALPUR, TEHSIL GHOSI, DISTRICT MAU, UTTAR PRADESH - 275 105. REPRESENTED BY ITS BRANCH HEAD, MR. MOHD SHAHID AZMI, AGED ABOUT 40 YEARS, ALSO AT: S/O MOHD KHALIL AZMI, NO. 188, MOHELIA - KOTE QUILA, NEAR MAZAR, TAHAIL-SADAR POST, SADAR, AZAMGARH, UTTAR PRADESH - 276 001.

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…PETITIONER

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(BY SRI. UNNIKRISHNAN M, ADVOCATE)

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NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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AND:

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THE STATE OF KARNATAKA BY WHITEFIELD CEN CRIME POLICE STATION, WHITEFIELD DIVISION, BANGALORE CITY, REPRESENTED BY SPP, HONBLE HIGH COURT OF KARNATAKA BANGALORE - 01.

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SHIVA SHANKARA R, S/O REDDAPPA, AGED ABOUT 33 YEARS, RESIDING AT NO.1, GROUND FLOOR, SAHANA PANTI NILAYA, SAMRIDHI LAYOUT, SEEGEHALLI MAIN ROAD, KADUGODI, BENGALURU - 560 067, KARNATAKA.

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…RESPONDENTS

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(BY SRI. RANGASWAMY R, HCGP FOR R1)

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THIS CRL.P IS FILED U/S 482 OF CR.PC (FILED U/S 528 BNNS) PRAYING TO SET ASIDE THE ORDER, DATED 11/07/2024 PASSED BY THE HONBLE 45TH ADDL. CHIEF JUDICIAL MAGISTRATE, BANGALORE, IN CRIME NO. 366/2024 I.E. ANN-C DIRECTING THE PETITIONER TO DEFREEZE THE SAVINGS/CURRENT ACCOUNT BEARING NO. 923020016785234 MAINTAINED IN THE PETITIONER BANK.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,

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ORDER WAS MADE THEREIN AS UNDER:

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NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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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. Rangaswamy R., learned High Court Government Pleader appearing for respondent No.1.

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Learned counsel appearing for the petitioner 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 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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NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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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 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

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5 - NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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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,

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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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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.	Crl. P. No.	Impugned order	Addl. Chief	CR. No.

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NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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No.		dated	Metropolitan Magistrate
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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In the light of the orders passed by the coordinate

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benches as quoted hereinabove, as also same was being heard

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in other cases, I deem it appropriate to dispose of this petition by passing the following:

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NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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ORDER

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a. Criminal Petition is allowed .

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b. The order dated 11.07.2024 passed by the 45^th Additional Chief Metropolitan Magistrate, Bangalore in Cr.No.366/2024 is hereby set aside.

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c. Matter is remanded to 45^th Additional Chief Metropolitan Magistrate, Bangalore 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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d. 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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e. 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.

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8 - NC: 2024:KHC:46725 CRL.P No. 11087 of 2024

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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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Sd/(M.NAGAPRASANNA) JUDGE

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SJK List No.: 1 Sl No.: 132 CT: BHK

Axis Bank Ltd. v. the State of Karnataka

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Axis Bank Ltd. v. the State of Karnataka

Case brief

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