One Trade Alliance Vs the State of Karnataka

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NC: 2026:KHC:17071 WP No. 4302 of 2026

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25^TH DAY OF MARCH, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 4302 OF 2026 (GM-RES)

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BETWEEN:

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ONE TRADE ALLIANCE REPRESENTED BY ITS MANAGING PARTNER JAMAL A AGED 33 YEARS S/O ABBAS K.U.KIZHAKKUMURI HOUSE, GOODALAIKUNNU, KALPETTA P.O. KALPETTA MUNICIPALITY, KALPETTA, WAYANAD, KERALA-673121.

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…PETITIONER

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(BY SRI. RAKSHITH R.,ADVOCATE)

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AND:

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Digitally signed by CHAITHRA A Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA RERPRESENTED BY ITS CHIEF SECRETARY, GOVERNEMENT OF KARNATAKA VIDHANA SOUDHA, DR.AMBEDKAR VEEDHI,. BENGALURU-560001.

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INDIAN CYBER CRIME COORDINATION CENTRE, REPRESENTED BY ITS CEO, FIFTH FLOOR, NDCC II BUILDINDG, JAI SINGH ROAD, NEW DELHI-110001.

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STATE POLICE CHIEF PUNJAB PUNJAB POLICE HEAD QUARERS SECTOR 9A, CHANDIGARH -160009.

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NC: 2026:KHC:17071 WP No. 4302 of 2026

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HC-KAR

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STATE POLICE CHIEF TAMILL NADU, NO.1,DR.RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI -600004

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CANARA BANK, 11701-VV MOHALLA MYSORE, D.NO.2774, 5^TH MAIN, VV MOHALLA, MYSORE

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…RESPONDENTS

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(BY SRI. ADITYA DIWAKAR, AGA FOR R1; SRI. VIGNESH SHETTY, ADVOCATE FOR R5; V/O DTD:25/03/2026, NOTICE TO R2 TO R5 IS D/W)

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THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TODIRECTING THE RESPONDENT AUTHORITIES TO DEFREEZE/ ITH DIEDETIT FROZE IMPENED.OS THE PETITIONER S BANK ACCOUNT BEARING ACCOUNT NO 120035872414 MATHISITED WITHIN CANARA BANK 11701-VV MOHALLA MYSORE NO 2774 5^TH . MAN.V.V MOHALLA MYSORE, KARNATAKA-571214. FORTHWITH.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

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ORAL ORDER

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The petitioner is a Company engaged in the business of brokerage and dealing in buying and selling of assets. It is the specific case of the petitioner that it maintains a

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3 - NC: 2026:KHC:17071 WP No. 4302 of 2026

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HC-KAR

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bank account bearing No. 120035872414 with the fifth respondent–Bank. The grievance of the petitioner arises from the action of the fifth respondent in freezing the said account, thereby disabling the petitioner from carrying out its routine business transactions.

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Learned counsel appearing for the petitioner would submit that when the petitioner attempted to operate its account in the ordinary course of business, it was informed by the Bank that the account has been frozen at the instance of the fifth respondent on account of alleged involvement in a crime. It is further contended that, as per the information furnished by the Bank, the alleged “crime proceeds” attributable to the petitioner is only a sum of Rs.5,972.97. Notwithstanding the same, the Bank has proceeded to freeze the entire account without restricting the action to the said amount, thereby causing severe financial hardship to the petitioner-Company, which is dependent on the said account for its day-to-day commercial operations.

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NC: 2026:KHC:17071 WP No. 4302 of 2026

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HC-KAR

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Per contra, learned Additional Government

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Advocate appearing for the respondent-State would submit that the freezing of the account is in connection with an investigation and that the petitioner has not placed any material on record to substantiate its contention that the alleged crime proceeds are confined only to a sum of Rs.5,972.97.

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This Court, having heard the learned counsel for the parties and upon perusal of the material on record, finds that though the petitioner asserts that the amount involved is only Rs.5,972.97, no documentary material is placed before this Court to substantiate the said contention. In the absence of such material, this Court is not inclined to grant the relief of defreezing the account in its entirety.

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However, at the same time, this Court cannot

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be oblivious to the fact that freezing of an entire bank account, particularly of a running business entity, has

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HC-KAR

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serious civil consequences and may result in undue hardship. If the alleged crime proceeds are ascertainable and limited to a particular amount, the action of freezing the entire account, without restricting it to the extent of such amount, would be disproportionate.

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In that view of the matter, this Court deems it appropriate to direct the petitioner to approach the fifth respondent–Bank by way of a representation seeking disclosure of the quantum of alleged crime proceeds on the basis of which the account has been frozen. In the event the Bank has definite material indicating the involvement of the petitioner and the extent of the amount in question, it is expected to act proportionately by marking lien only to the extent of the alleged amount and permitting the petitioner to operate the account insofar as the remaining balance is concerned.

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Accordingly, this Court proceeds to pass the following:

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HC-KAR

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ORDER

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(i) The writ petition is allowed in part.

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(ii) The petitioner is reserved liberty to submit an appropriate representation to the fifth respondent– Bank seeking disclosure of the quantum of the alleged crime proceeds forming the basis for freezing of its account.

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(iii) Upon receipt of such representation, the fifth respondent–Bank shall, within a reasonable period, furnish particulars regarding the amount alleged to be involved.

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(iv) In the event the said amount is ascertained, the fifth respondent–Bank shall ensure that lien is marked only to the extent of the said amount, and the petitioner shall be permitted to operate the bank

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