Case Note & Summary
The case involves two applications under Section 482 of the Code of Criminal Procedure, 1973. The first application (APL No.191 of 2024) is filed by the first informant, Parag Shah, challenging the de-freezing of bank accounts of the accused, which were freezed by the investigating officer under Section 102 CrPC. The second application (APL No.790 of 2024) is filed by the accused No.2, Geeta Kampani, challenging the condition imposed by the Magistrate for de-freezing, i.e., furnishing a bank guarantee of Rs.6.55 Crores. The dispute arises from an FIR registered in 2018 for offences under Sections 120B, 406, 420 read with Section 34 IPC, alleging that the accused, who were known to the first informant, took shares on loan and later refused to return them. The investigating officer freezed the bank accounts of the accused. The accused filed an application for de-freezing, which was allowed by the Magistrate on 7 December 2023, subject to furnishing a bank guarantee. The first informant challenges the de-freezing itself, while the accused challenges the condition. The court held that the first informant has no locus to challenge the de-freezing order as the investigation is conducted by the State. Regarding the accused's challenge, the court found that the condition of furnishing a bank guarantee was reasonable and necessary to protect the interests of the investigation and the complainant. The court dismissed both applications, upholding the Magistrate's order.
Headnote
A) Criminal Procedure Code - Freezing of Bank Accounts - Section 102 CrPC - De-freezing with Conditions - The court considered the legality of de-freezing of accounts freezed under Section 102 CrPC and imposition of condition to furnish bank guarantee. Held that freezing under Section 102 cannot be indefinite and the court can impose conditions for de-freezing to balance the interests of investigation and the right of the accused to carry on business. (Paras 1-25)
B) Criminal Procedure Code - Locus Standi - Section 482 CrPC - First Informant's Challenge - The court examined whether the first informant has locus to challenge the de-freezing order. Held that the first informant has no locus to challenge the de-freezing order as the investigation is conducted by the State and the informant's role is limited to providing information. (Paras 2-10)
Issue of Consideration
Whether the order de-freezing the bank accounts of the accused with a condition to furnish bank guarantee of Rs.6.55 Crores is legal and proper, and whether the first informant has locus to challenge the de-freezing order.
Final Decision
Both applications are dismissed. The order dated 7 December 2023 passed by the learned Additional Chief Metropolitan Magistrate, 47th Court, Mumbai is upheld.
Law Points
- Section 102 CrPC freezing of bank accounts cannot be indefinite
- right to carry on business under Article 19(1)(g) must be balanced
- court can impose conditions for de-freezing including furnishing of bank guarantee
Case Details
2026 LawText (BOM) (05) 35
Criminal Application No.790 of 2024 and Criminal Application No.191 of 2024
Mr. Sharan Jagtiani, Senior Advocate with Ms. Shraddha Achliya, Ms. Namita Maneshinde for Applicant in APL 790/2024 and for Respondent No.1 in APL 191/2024; Mr. Sanjeev Kadam, Senior Advocate with Dr. Kshitija Wadatkar, Ms. Varsha Thorat, Mr. Vikrant Khare, Mr. Malay Mishra, Ms. Vidhi Shah, Ms. Khushi Patharia i/by M/s. Kshitija Wadatkar for Applicant in APL 191/2024 and for Respondent No.2 in APL 790/2024; Mrs. R.S. Tendulkar, APP for State.
Geeta Kampani (in APL 790/2024) and Parag Shah (in APL 191/2024)
State of Maharashtra and Parag Shah (in APL 790/2024); Geeta Kampani and State of Maharashtra (in APL 191/2024)
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Nature of Litigation
Criminal applications under Section 482 CrPC challenging the order of de-freezing of bank accounts and the condition of furnishing bank guarantee.
Remedy Sought
First informant sought quashing of de-freezing order; accused sought removal of condition to furnish bank guarantee.
Filing Reason
The accused's bank accounts were freezed under Section 102 CrPC in connection with FIR for cheating and criminal breach of trust. The accused applied for de-freezing, which was allowed with condition of bank guarantee. Both parties challenged the order.
Previous Decisions
The learned Additional Chief Metropolitan Magistrate, 47th Court, Mumbai passed an order on 7 December 2023 de-freezing the accounts subject to furnishing a bank guarantee of Rs.6.55 Crores.
Issues
Whether the first informant has locus standi to challenge the de-freezing of bank accounts?
Whether the condition of furnishing a bank guarantee of Rs.6.55 Crores for de-freezing is legal and proper?
Submissions/Arguments
First informant argued that de-freezing was illegal as the accounts contained proceeds of crime and the accused should not be allowed to operate them.
Accused argued that the condition of bank guarantee was excessive and violated her right to carry on business under Article 19(1)(g) of the Constitution.
Ratio Decidendi
The freezing of bank accounts under Section 102 CrPC cannot be indefinite and must be balanced against the right of the accused to carry on business. The court can impose conditions for de-freezing, including furnishing a bank guarantee, to protect the interests of the investigation and the complainant. The first informant has no locus to challenge the de-freezing order as the investigation is conducted by the State.
Judgment Excerpts
These Applications under Section 482 of the Code of Criminal Procedure, 1973 (the Code, 1973) assail the legality, propriety and correctness of the order dated 7 December 2023 passed by the learned Additional Chief Metropolitan Magistrate, 47th Court, Mumbai, albeit from a diametricaly opposite perspective.
The Applicant in APL No.191 of 2024 – first informant, takes exception to the very de-freezing of the accounts of the accused, which were freezed by the IO under Section 102 of the Code, 1973.
The Applicant in APL No.790 of 2024 – Accused No.2, calls in question the legality of the order to the extent of the condition to furnish a bank guarantee in the sum of Rs.6.55 Crores for the de-freezing of the accounts.
Procedural History
FIR No.39 of 2018 was registered for offences under Sections 120B, 406, 420 read with Section 34 IPC. The investigating officer freezed the bank accounts of the accused under Section 102 CrPC. The accused filed an application for de-freezing, which was allowed by the Magistrate on 7 December 2023 subject to furnishing a bank guarantee of Rs.6.55 Crores. The first informant filed APL No.191 of 2024 challenging the de-freezing, and the accused filed APL No.790 of 2024 challenging the condition. Both applications were heard together and dismissed by the High Court on 7 May 2026.
Acts & Sections
- Code of Criminal Procedure, 1973: 102, 482
- Indian Penal Code, 1860: 120B, 406, 420, 34
