Case Note & Summary
The petitioner, M/s. Ownpath Learning Private Limited, a registered startup under DPIIT, filed a writ petition under Articles 226 and 227 of the Constitution of India seeking a direction to the 2nd respondent, Kotak Mahindra Bank, to defreeze its three bank accounts bearing numbers 6145157210, 6146012129, and 614935818 with balances of Rs. 1,00,775/-, Rs. 50,078/-, and Rs. 1,07,230/- respectively. The accounts were frozen based on a legal notice and order dated 08.12.2022 (Annexure-A) issued by the 1st respondent, the Narcotics Control Bureau (NCB), under Section 68F of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act). The petitioner contended that the freezing was arbitrary, illegal, and unjust as the company was not an accused in any offence under the NDPS Act. The court heard arguments from Sri Siddharth Suman for the petitioner and Smt. Shridevi Bhosale Maruti for the 1st respondent. The court noted that the petitioner was not an accused and the freezing order lacked proper application of mind. The court allowed the petition, quashed the freezing order, and directed the bank to defreeze the accounts. The judgment was delivered by Justice M. Nagaprasanna on 5th January 2024.
Headnote
A) Criminal Law - Narcotic Drugs and Psychotropic Substances Act, 1985 - Section 68F - Freezing of Property - The court considered whether a bank account freezing order under Section 68F of the NDPS Act can be sustained against a company that is not an accused in the predicate offence. The court held that the freezing order was arbitrary and illegal as the petitioner was not an accused and the order lacked proper application of mind. (Paras 1-3) B) Constitutional Law - Writ Jurisdiction - Article 226 - Mandamus - The court examined the scope of its writ jurisdiction to direct defreezing of bank accounts. It held that a writ of mandamus can be issued to quash an illegal freezing order and direct the bank to defreeze the accounts. (Paras 1-2)
Issue of Consideration
Whether the freezing of the petitioner-company's bank accounts under Section 68F of the NDPS Act, 1985, based on a notice and order dated 08.12.2022, is arbitrary and illegal when the petitioner is not an accused in the underlying offence.
Final Decision
The court allowed the writ petition, quashed the freezing order dated 08.12.2022, and directed the 2nd respondent bank to defreeze the petitioner's bank accounts.
Law Points
- Section 68F of NDPS Act
- 1985
- freezing of bank accounts
- writ of mandamus
- Article 226 of Constitution of India
- Article 227 of Constitution of India
