In a significant ruling that reinforces the limits of investigative powers, the Uttarakhand High Court has put an end to a six-year-long financial ordeal for a man whose bank account was frozen during a corruption probe, despite him never being named as an accused. The court decisively held that the mere pendency of a criminal trial cannot justify the indefinite freezing of property belonging to a person who is not facing trial.
A Six-Year Financial Lockdown
The case stemmed from an investigation into an alleged land compensation scam dating back to 2018. It was alleged that an agricultural plot was falsely shown as non-agricultural by obtaining back-dated orders, leading to the payment of excessive compensation. During the probe, the investigating officer requested the State Bank of India to freeze the bank account of the petitioner, who is one of the landowner's sons, on the grounds that the disputed compensation amount was deposited there.
Consequently, the account was frozen in 2018. The petitioner, who was not named as an accused in the First Information Report (FIR) or in any chargesheet, moved the trial court seeking to defreeze his account. However, a special court in Haldwani rejected his plea, forcing him to approach the High Court with a criminal revision petition.
Court's Landmark Observations and Ruling
Justice Ashish Naithani, presiding over the case, delivered a robust judgment that underscores the balance between investigative needs and individual rights. The court categorically stated that accepting the prosecution's argument would grant investigating agencies an "unchecked power to restrain property for years, without trial, without conviction, and without judicial oversight," a outcome it found wholly incompatible with the rule of law.
The High Court made several key legal determinations:
- A bank account unequivocally constitutes "property" under the meaning of Section 102 of the Code of Criminal Procedure (CrPC), which deals with the power of police to seize property.
- Freezing a bank account, which prevents the holder from accessing or operating it, amounts to a seizure of property. This seizure is a serious intrusion into proprietary and economic rights and cannot be treated as a routine investigative step.
- Freezing the account of the applicant, who is not an accused and where the investigation has substantially progressed, was "manifestly disproportionate."
Balancing Interests and the Final Order
Emphasizing the need to balance prosecutorial interests with individual rights, the court devised a practical solution. It ordered the bank account to be unfrozen, but subject to the condition that the account holder furnishes adequate security equivalent to the amount allegedly linked to the offence. This measure aims to secure the disputed funds for the trial while restoring the individual's access to his rightful property.
The judgment, delivered in early January 2026, serves as a crucial precedent. It acts as a judicial check against the potential overreach of investigative agencies and reaffirms that the presumption of innocence and the right to property cannot be sidelined indefinitely under the guise of an ongoing investigation.
