- 1 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR CRIMINAL PETITION NO. 9833 OF 2024 BETWEEN: MR SUDHEENDRA SEENA POOJARY, S/O SEENA POOJARI, AGED ABOUT 42 YEARS, R/AT NO.1-1574(1) ASHODA VILLAGE, KUNDAPURA TALUK, UDUPI DISTRICT - 576 222. …PETITIONER (BY SRI. HASHMATH PASHA, SENIOR COUNSEL FOR SRI. MOHAMMED MUBARAK, ADVOCATE) AND: ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT, GOVERNMENT OF INDIA, OFFICE AT BMTC B BLOCK, 3RD FLOOR, SHANTHINAGAR, K. H. ROAD, WILSON GARDEN, BANGALORE 560 027. (REPRESENTED BY LEARNED SPECIAL PUBLIC PROSECUTOR FOR ENFORCEMENT DIRECTORATE BANGALORE) …RESPONDENT (BY SRI. PRASANNA KUMAR P., ADVOCATE) THIS CRL.P IS FILED U/S 482 OF CR.PC (FILED U/S 528 BNSS) PRAYING TO SET ASIDE THE ORDER DATED 20.10.2023 PASSED IN CRL.MISC.NO.7013/2023, ON THE FILE OF HONBLE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE CITY AND CONSEQUENTLY ISSUE DIRECTION TO DEFREEZE HIS BANK ACCOUNT NO.004910500063985 IN BHARATH CO-OPERATIVE BANK (MUMBAI) LTD., KUNDAPURA BRANCH Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 IN ECIR/BG20/02/2021/970 AND ALLOW HIM TO OPERATE THE ABOVE SAID BANK ACCOUNT, ON SUCH TERMS AND CONDITION. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “Wherefore, the petitioner most humbly prays that this Hon’ble Court be pleased to set aside the order dated 20.10.2023 passed in Criminal Mis.No.7013/2023 on the file of Hon’ble Principal City Civil and Sessions Judge, Bengaluru City and consequently issue direction to defreeze his bank account No.004910500063985 in Bharath Co- operative Bank (Mumbai) Ltd., Kundapura Branch, in ECIR/BGZO/02/2021/970 and allow him to operate the above said Bank account, on such terms and condition, in the ends of justice.” 2. A perusal of the material on record will indicate that on 23.09.2019, the CCB police conducted a raid on the business premises of M/s.P.M.Enterprises, situated at No.43, II floor, P.R.Shastry lane, Bangalore, pursuant to receiving information that the accused persons are involved in betting in relation to T-20 Cricket Match between India and South Africa played in Bangalore - 3 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 on 22.09.2019. During the raid, the CCB police seized cash in a sum of Rs.40,29,800/- and registered FIR in Crime No.177/2019 of Halasuru Gate Police Station, Bangalore, for offences punishable under Sections 79 and 80 of the Karnataka Police Act r/w Sections 420 and 34 IPC against 6 accused persons including the petitioner herein who was arraigned as accused No.3 in the said proceedings. 3. The petitioner preferred Crl.P.No.7735/2019 seeking quashing of the aforesaid FIR in Crime No.177/2019 which was allowed by this Court vide final order dated 26.02.2020. Subsequently, the respondent / ED authorities issued the instant Enforcement Case Information Report (ECIR ) dated 13.01.2021 based on the aforesaid FIR in Crime No.177/2019, pursuant to which, the respondent issued a letter dated 04.02.2021 calling upon M/s.Bharath Co-operative Bank Limited (Mumbai) Ltd., Kundapur Branch, calling upon the Bank to freeze the account of the petitioner in the said Bank. 4. The petitioner and Bank authorities having requested the respondent to defreeze the account, the respondent did not do so, as a result of which, the petitioner approached the trial court under - 4 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 Sections 451 and 457 of Cr.P.C. seeking defreezing of his account in the instant Crl.Misc.7013/2023. The said petition having been opposed by the respondent, the trial court proceeded to pass the impugned order dated 20.10.2023 dismissing the petition, aggrieved by which, petitioner is before this Court by way of the present petition. 5. A perusal of the material on record will indicate that the trial court has failed to consider and appreciate the undisputed fact that the petitioner sought for defreezing of his bank account, pursuant to the impugned ECIR which was undisputedly based / founded on the FIR in Crime No.177/2019 filed against the petitioner – accused No.3 which was quashed by this Court qua the petitioner in Crl.P.No.7735/2019 dated 26.02.2020 and consequently, in the light of the quashing of the predicate / scheduled offence in Crime No.177/2019, the respondent was not entitled to seek freezing of the bank account of the petitioner, pursuant to the ECIR dated 13.01.2021 which arose out of the predicate / scheduled offence in FIR 177/2019 which had already been quashed earlier in Crl.P.No.7735/2019 dated 26.02.2020. In this context, a perusal of the impugned order will indicate that - 5 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 though the trial court referred to the contention of the petitioner that the predicate/scheduled offence in Crime No.177/2019 had already been quashed by this Court, the said circumstance / undisputed fact has neither been considered nor appreciated by the trial court while passing the impugned order, which deserve to be set aside on this ground alone. 6. The trial court also failed to consider and appreciate the ratio laid down in the judgment of the Apex Court in the case of Vijay Madanlal Chowdhary vs. Union of India – AIR Online 2022 SC 1139, wherein the Apex Court held as under:- “ 187. (v) (d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money- laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any one claiming such - 6 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 property being the property linked to stated scheduled offence through him.” 7. In the instant case, it is an undisputed fact borne out from the material on record that the predicate / scheduled offence qua the petitioner in Crime No.177/2019 were quashed by this Court in Crl.P.No.7735/2019 dated 26.02.2020 much prior to the impugned ECIR being registered on 29.012021, pursuant to which, the Bank account of the petitioner was frozen at the instance of the respondent. In view of quashing of the FIR in Crime No.177/2019 and in the light of the judgment of the Apex court in Vijay Mandanlal Chouwdary’s case supra, I am of the view that the trial court clearly fell in error in dismissing the petition filed by the petitioner under Section 451 and 457 Cr.P.C. and as such, the impugned order passed by the trial court deserves to be set aside. 8. A perusal of the impugned order will indicate that the trial court failed to consider and appreciate that the respondent had failed to comply with the mandatory procedure and requirements prescribed under Section 17 of the PML Act, 2002, in particular, Section 17(2) and (4), which mandate that the respondent should forward and report the freezing order to the adjudicating authority in - 7 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 terms of Section 17(2), pursuant to which, the respondent should file an application under Section 17(4) within a period of 30 days from the date of freezing requesting the adjudicating authority for continuation of the freezing order; in the instant case it is an undisputed fact that pursuant to the freezing order dated 04.02.2021, the respondent neither forwarded the freezing order and other material to the adjudicating authority in terms of Section 17(2) nor did the respondent file the requisite application in terms of Section 17(4) seeking continuation of the freezing order before the adjudicating authority and consequently, non-compliance of the aforesaid provisions would vitiate the freezing order, thereby entitled the petitioner to seek defreezing of his bank account as sought for in Crl.Misc.No.7013/2023. Under identical circumstances, in the case of Opto Circuit India Ltd., vs. Axis Bank & others – (2021) 6 SCC 707, the Apex Court held as under:- “Leave granted. The appellant is before this Court assailing the order dated 13-8-2020 passed by the High Court of Karnataka in Vinod Ramnani v. State [Vinod Ramnani v. State, 2020 SCC OnLine Kar 1269] . Through the said common order [Vinod Ramnani v. State, 2020 SCC OnLine Kar 1269] the High Court has disposed of two writ - 8 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 petitions but the consideration herein relates to the issue raised in Writ Petition No. 8031 of 2020 which was filed before the High Court, by the appellant herein raising the issue relating to the freezing of their bank account. 2. When the special leave petition was listed for admission, the learned Senior Counsel for the appellant while assailing the order [Vinod Ramnani v. State, 2020 SCC OnLine Kar 1269] passed by the High Court, inter alia, contended that the freezing of the bank accounts maintained by the appellant Company has prejudiced the appellant, inasmuch as, the amount in the account which belongs to the appellant is made unavailable to them due to which statutory payments to be made to the competent authorities under various enactments are withheld and the payment of salary which is due to the employees is also prevented. In that background, this Court though had not found any reason to interfere with the initiation of the proceedings under the Prevention of Money-Laundering Act, 2002 (“the PMLA” for short) had, however, limited the scope of consideration in this appeal on the issue of defreezing the bank account so as to enable the appellant to make the statutory payments. In that view, notice had been issued to the respondent through the order dated 11-9-2020 [Opto Circuits (India) Ltd. v. AXIS Bank, 2020 SCC OnLine SC 1107] in the following manner— “issue notice restricted to the purpose of enabling necessary payment returnable within two weeks”. The respondent on being served, having appeared has filed the counter-affidavit on behalf of Respondent 4. - 9 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 3. In that background we have heard Mr Mukul Rohatgi, learned Senior Advocate for the appellant and Mr S.V. Raju, learned Additional Solicitor General for Respondent 4 and perused the petition papers. 4. The instant appeal arises out of the proceedings initiated by Respondent 4 against the appellant under the PMLA. The analogous matter, which was considered by the High Court along with the writ petition which is the subject- matter herein related to the action initiated by the Central Bureau of Investigation (“CBI” for short) for the alleged predicate offence and the instant proceedings is a fallout of the same. It is in that background the Enforcement Directorate in order to track the money trail relating to the predicate offence and prevent layering of the same has initiated the proceedings under the PMLA. In the said process the Deputy Director, Directorate of Enforcement through the Communication dated 15-5-2020 addressed to the Anti-Money Laundering Officer (“AML” for short) of Respondents 1 to 3 Banks instructed them that the accounts maintained by the appellant Company be “debit freezed/stop operations” until further orders, with immediate effect. It is in that light the appellant claiming to be aggrieved filed WP No. 8031 of 2020 before the High Court seeking for issue of an appropriate writ to quash the Communication dated 15-5- 2020 issued for debit freezing Account No. 914020014786978 maintained with Respondent 1, Account No. 200006044354 maintained with Respondent 2 and Account No. 39305709999 maintained with Respondent 3. The appellant in that regard also prayed that the respondents - 10 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 be directed to defreeze the accounts to which reference is made. 5. The High Court considered the matter in detail and has taken into consideration the object with which the PMLA was enacted and the validity of the Act being considered by the High Court in the decisions referred to in the course of the order. The permissibility and scope of parallel proceedings under Sections 3 and 4 of the PMLA was adverted to in detail and upheld the action. Insofar as the reasoning adopted and the conclusion reached by the High Court with regard to the power and competence to initiate the proceedings under the PMLA in view of the action taken for predicate offence, the High Court was very much justified. However, the High Court having held that the impugned communication was with competence or justification ought to have examined whether the “due process” as contemplated under the PMLA was complied with so as to make it valid and sustainable in law, though the power under the Act was available. As already noticed, the consideration to be made in this appeal is, therefore, limited to the aspect of freezing/defreezing the account, more particularly keeping in view the requirement of the appellant to make the statutory payments even if the freezing of the account is found justified. 6. While adverting to this aspect of the matter, what cannot be lost sight of is also the fact as to whether the power available to the competent authority has been exercised in the manner as is contemplated under the PMLA. The Directorate of Enforcement (Respondent 4) in their - 11 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 counter-affidavit has taken contradictory stand inasmuch as, while explaining the need to freeze the account has stated that the “stop operation” was requested to stop the further layering/diversion of proceeds of crime and to safeguard the proceeds of crime, which we notice is a power available under the PMLA. But in the counter-affidavit it is strangely stated that the same has not been done under Section 17(1) of the PMLA. However, in contrast it has been further averred with regard to the power available under the PMLA and that the PMLA being a standalone enactment and independent process whereunder Section 71 of the PMLA has an overriding effect over other laws. Irrespective of the stand taken, the power exercised by the competent authority should be shown to be in the manner as has been provided in law, in this case under the PMLA. 7. To appreciate this aspect, it would be appropriate to refer to Section 17 of the PMLA whereunder the freezing of such property or record is also provided. Section 17 of the PMLA reads as hereunder: “17. Search and seizure.—(1) Where the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person— (i) has committed any act which constitutes money-laundering, or - 12 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 (ii) is in possession of any proceeds of crime involved in money-laundering, or (iii) is in possession of any records relating to money-laundering, or (iv) is in possession of any property related to crime, then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to— (a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept; (b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available; (c) seize any record or property found as a result of such search; (d) place marks of identification on such record of property, if required or make or cause to be made extracts or copies therefrom; (e) make a note or an inventory of such record or property; (f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act: - 13 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 (1-A) Where it is not practicable to seize such record or property, the officer authorised under sub- section (1), may make an order to freeze such property whereupon the property shall not be transferred or otherwise dealt with, except with the prior permission of the officer making such order, and a copy of such order shall be served on the person concerned: Provided that if, at any time before its confiscation under sub-section (5) or sub-section (7) of Section 8 or Section 58-B or sub-section (2-A) of Section 60, it becomes practical to seize a frozen property, the officer authorised under sub-section (1) may seize such property. (2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure or upon issuance of a freezing order, forward a copy of the reasons so recorded along with material in his possession, referred to in that sub- section, to the adjudicating authority, in a sealed envelope, in the manner, as may be prescribed and such adjudicating authority shall keep such reasons and material for such period, as may be prescribed. (3) Where an authority, upon information obtained during survey under Section 16, is satisfied that any evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place - 14 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 where such evidence is located and seize that evidence: Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section. (4) The authority seizing any record or property under sub-section (1) or freezing any record or property under sub-section (1-A) shall, within a period of thirty days from such seizure or freezing, as the case may be, file an application, requesting for retention of such record or property seized under sub-section (1) or for continuation of the order of freezing served under sub-section (1-A), before the adjudicating authority.” (emphasis supplied) 8. A perusal of the above provision would indicate that the prerequisite is that the Director or such other authorised officer in order to exercise the power under Section 17 of the PMLA, should on the basis of information in his possession, have reason to believe that such person has committed acts relating to money-laundering and there is need to seize any record or property found in the search. Such belief of the officer should be recorded in writing. Sub-section (1-A) to Section 17 of the PMLA provides that the officer authorised under sub-section (1) may make an order to freeze such record or property where it is not practicable to seize such record or property. Sub-section (2) provides that after search and seizure or upon issuance of a freezing order the authorised officer shall forward a copy of the reasons - 15 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 recorded along with material in his possession to the adjudicating authority in a sealed envelope. Sub-section (4) provides that the authority seizing or freezing any record or property under sub-section (1) or (1-A) shall within a period of thirty days from such seizure or freezing, as the case may be, file an application before the adjudicating authority requesting for retention of such record or properties seized. 9. For the purpose of clarity, it is emphasised that the freezing of the account will also require the same procedure since a bank account having alleged “proceeds of crime” would fall both under the ambit “property” and “records”. In that regard, it would be appropriate to take note of Sections 2(1)(v) and 2(1)(w) of the PMLA which defines “property” and “records”. The same read as follows: “2. (1)(v) “property” means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located; *** 2. (1)(w) “records” include the records maintained in the form of books or stored in a computer or such other form as may be prescribed;” 10. The scheme of the PMLA is well intended. While it seeks to achieve the object of preventing money-laundering and bring to book the offenders, it also safeguards the rights of the persons who would be proceeded against under the - 16 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 Act by ensuring fairness in procedure. Hence a procedure, including timeline is provided so as to ensure that power is exercised for the purpose to which the officer is vested with such power and the adjudicating authority is also kept in the loop. In the instant case, the procedure contemplated under Section 17 of the PMLA to which reference is made above has not been followed by the officer authorised. Except issuing the impugned Communication dated 15-5-2020 to AML Officer to seek freezing, no other procedure contemplated in law is followed. In fact, the impugned communication does not even refer to the belief of the authorised officer even if the same was recorded separately. It only states that the officer is investigating the case and seeks for relevant documents, but in the tabular column abruptly states that the accounts have to be “debit freezed/stop operations”. It certainly is not the requirement that the communication addressed to the Bank itself should contain all the details. But what is necessary is an order in the file recording the belief as provided under Section 17(1) of the PMLA before the communication is issued and thereafter the requirement of Section 17(2) of the PMLA after the freezing is made is complied with. There is no other material placed before the Court to indicate compliance with Section 17 of the PMLA, more particularly recording the belief of commission of the act of money-laundering and placing it before the adjudicating authority or for filing application after securing the freezing of the account to be made. In that view, the freezing or the continuation thereof is without due compliance with the legal requirement and, therefore, not sustainable. - 17 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 11. Mr.S.V. Raju, learned Additional Solicitor General made a subtle attempt to contend that the power of seizure is available under Section 102 Cr.P.C, which has been exercised and as such the freezing of the account would remain valid. We are unable to appreciate and accept such contention for more than one reason. Firstly, as noted, it has been the contention of Respondent 4 that the PMLA is a standalone enactment. If that be so and when such enactment contains a provision for seizure which includes freezing, the power available therein is to be exercised and the procedure contemplated therein is to be complied with. Secondly, when the power is available under the special enactment, the question of resorting to the power under the general law does not arise. Thirdly, the power under Section 102 Cr.P.C is to the police officer during the course of investigation and the scheme of the provision is different from the scheme under the PMLA. Further, even sub-section (3) to Section 102 Cr.P.C requires that the police officer shall forthwith report the seizure to the Magistrate having jurisdiction, the compliance with which is also not shown if the said provision was in fact invoked. That apart, the impugned Communication dated 15-5-2020 does not refer to the power being exercised under the Code of Criminal Procedure. 12. The action sought to be sustained should be with reference to the contents of the impugned order/communication and the same cannot be justified by improving the same through the contention raised in the objection statement or affidavit filed before the Court. This - 18 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 has been succinctly laid down by this Court in Mohinder Singh Gill v. Chief Election Commr. [Mohinder Singh Gill v. Chief Election Commr., (1978) 1 SCC 405] as follows : (SCC p. 417, para 8) “8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, gets validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji [Commr. of Police v. Gordhandas Bhanji, 1951 SCC 1088] : (SCC p. 1095, para 9) ‘9. … public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.’ Orders are not like old wine becoming better as they grow older.” In fact, in the instant case such contention of having exercised power under Section 102 CrPC has not been put forth even in the counter-affidavit, either in this appeal or before the High Court and has only been the attempted ingenuity of the learned Additional Solicitor General. Such contention, therefore, cannot be accepted. In fact, in the objection statement filed before the High Court much emphasis has been laid on the power available under the PMLA and the same being exercised though without - 19 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 specifically referring to the power available under Section 17 of the PMLA. 13. Respondent 4 in the counter-affidavit has stated that the action initiated against the appellant is based on the complaint dated 2-11-2019 made by State Bank of India alleging that the appellant, its Chairman and the Promoter Directors have conspired and cheated them to the tune of Rs 354.32 crores by diversion of funds abroad. In that regard, the CBI has registered the case in FIR No. RC 18(A)/2019 dated 4-11-2019 under Section 120-B read with Sections 420, 468 and 471 of the Penal Code, 1860 and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. Since the said offences are also schedule offences under Sections 2(1)(x) and (y) of the PMLA, the case in ECIRBGZO/01/2020 was recorded by the Directorate on 2-1-2020 and action is taken to safeguard the alleged proceeds of crime. On that aspect we have already indicated that the High Court was justified in upholding the action initiated under the PMLA but the consideration herein was only with regard to freezing of the bank account and as to whether while doing so the due process had been complied with by adhering to the procedure prescribed under Section 17 of the PMLA. 14. This Court has time and again emphasised that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner alone and in no other manner. Among others, in a matter relating to the presentation of an election petition, as per the procedure prescribed under the Patna High Court Rules, this Court had - 20 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 an occasion to consider the Rules to find out as to what would be a valid presentation of an election petition in Chandra Kishore Jha v. Mahavir Prasad [Chandra Kishore Jha v. Mahavir Prasad, (1999) 8 SCC 266] and in the course of consideration observed as hereunder : (SCC p. 273, para 17) “17. … It is a well-settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner.” Therefore, if the salutary principle is kept in perspective, in the instant case, though the authorised officer is vested with sufficient power; such power is circumscribed by a procedure laid down under the statute. As such the power is to be exercised in that manner alone, failing which it would fall foul of the requirement of complying with due process under law. We have found fault with the authorised officer and declared the action bad only insofar as not following the legal requirement before and after freezing the account. This shall not be construed as an opinion expressed on the merit of the allegation or any other aspect relating to the matter and the action initiated against the appellant and its Directors which is a matter to be taken note of in appropriate proceedings if at all any issue is raised by the aggrieved party. 15. Apart from the above consideration, what has also engaged the attention of this Court is with regard to the plea put forth on behalf of the appellant regarding the need to - 21 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 defreeze the account to enable the appellant to pay the statutory dues. The appellant in that regard has relied on the certificate issued by the Chartered Accountant (Annexure P- 38 at p. 231) which indicates the amount payable towards ITDS, PF, ESI, professional tax, gratuity and LIC employees' deductions, in all amounting to Rs 79,93,124. Since we have indicated that the freezing has been done without due compliance with law, it is necessary to direct Respondents 1 to 3 to defreeze the respective accounts and clear the cheques issued by the appellant, drawn in favour of the competent authority towards ITDS, PF, ESI, professional tax, gratuity and LIC employees' deductions, subject to availability of the funds in the account concerned. Needless to mention that if any further amount is available in the account after payment of the statutory dues and with regard to the same any action is to be taken by Respondent 4 within a reasonable time, it would open to them to do so subject to compliance with the required procedure afresh, as contemplated in law. 16. In terms of the above, the Communication dated 15-5-2020 is quashed. We direct that the respondents shall defreeze the accounts bearing Nos. 914020014786978, 200006044354 and 39305709999 and honour payments advised by the appellant towards statutory dues stated supra. Liberty is reserved to Respondent 4, thereafter to initiate action afresh in accordance with law, if they so desire. 17. The appeal is allowed to the above extent with no order as to costs.” - 22 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 9. In the fact of the instant case, the material on record discloses that the respondent has neither reported nor forwarded the freezing order along with other material to the adjudicating authority nor filed the appropriate / requisite application in this regard as mandated in terms of Section 17(2) and 17(4) of PML Act before the adjudicating authority within the prescribed period of 30 days from 04.02.2021 seeking continuation of the freezing order and as such, in the light of the judgment of the Apex Court in Opto Circuit’s case supra, I am of the view that the impugned order passed by the trial court deserves to be set aside and Crl.Misc.No.7013/2023 filed by the petitioner deserves to be allowed. 10. A perusal of the impugned order will indicate that the trial court has not accepted the contention of the respondent that the instant ECIR dated 13.01.2021 arose not only out of the present FIR No.177/2019 against the petitioner – accused No.3 but also arose out of FIR No.180/2019 dated 30.09.2019 and FIR No.124/2019 dated 24.10.2019 on the ground that in the subsequent Two FIRs in FIR No.180/2019 and FIR No.124/2019, the petitioner was not arraigned as an accused person; despite - 23 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 noticing the undisputed fact that ECIR dated 13.01.2021 arose out of 3 FIRs viz., FIR No.177/2019 which was quashed by the co- ordinate Bench of this Court as stated supra qua the petitioner and two other FIRs in FIR No.180/2019 and FIR No.124/2019, in which, the petitioner was neither arraigned as an accused nor did he have any connection or nexus whatsoever to the same, the trial court clearly misdirected itself in rejecting the claim of the petitioner based on surmises and conjectures by passing the impugned order, which deserves to be set aside on this ground also. 11. The trial court also failed to consider and appreciate the material on record which indicated that the amount standing in the frozen bank account of the petitioner was his personal amount which was unconnected to the scheduled / predicate offence and in the absence of anything to show that the said amount was linked / connected to the scheduled / predicate offence, the respondent was not entitled to freeze the account of the petitioner and on this ground also, the impugned order deserves to be set aside. 12. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. - 24 - NC: 2025:KHC:1121 CRL.P No. 9833 of 2024 (ii) The impugned order dated 20.10.2023 passed in Crl.Misc.No..7013/2023 by the Prl.City Civil and Sessions Judge, Bangalore, is hereby set aside. (iii) Crl.Misc.7013/2023 filed by the petitioner under Section 451 and 457 Cr.P.C. is hereby allowed. (iv) The respondent and M/s.Bharath Co-operative Bank (Mumbai), Ltd., Kundapura Branch, are directed to defreeze / unblock the Bank account of the petitioner bearing A/c. No.004910500063985 in ECIR/BGZO/02/2021/970 and permit the petitioner to operate the said account forthwith without any delay. Sd/- (S.R.KRISHNA KUMAR) JUDGE MCR/SRL List No.: 1 Sl No.: 35