Rajasthan High Court Curbs Unlawful Bank Account Freezes

The Rajasthan High Court ruled against blanket bank account freezes, emphasizing proportionality during financial fraud investigations. The case involved filmmaker Vikram Bhatt and co-petitioner Shwetambari Bhatt, whose accounts were fully frozen. The court ordered the restriction to only the disputed Rs 30 crore, underscoring the need for fair and just procedures.

In a landmark decision concerning police powers in financial investigations, the Rajasthan High Court's Jodhpur bench has declared that banks cannot impose total freezes on accounts at the behest of investigating bodies without proportionate measures. The ruling was highlighted during a March 19 proceeding involving filmmaker Vikram Bhatt and co-petitioner Shwetambari Bhatt, whose accounts were fully frozen amidst a fraud investigation.

During the hearing, the court offered partial relief by directing that only the disputed sum of Rs 30 crore remain restricted while allowing other transactions to proceed. This decision stems from allegations made via an FIR registered in Udaipur by Ajay Murdiya, claiming a fraud involving Rs 30 crore.

The petitioners contended that freezing their accounts, which contained legitimate earnings, without due process, hindered their financial operations. Justice Farjand Ali emphasized that full account freezes infringe fundamental rights and instructed relevant banks to defreeze accounts promptly, aligning with Supreme Court principles on personal liberty and financial fairness.

(With inputs from agencies.)