- 1 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CRIMINAL PETITION NO. 12534 OF 2025 BETWEEN: AXIS BANK LTD A BANKING COMPANY, CARRYING ON THE BANKING BUSINESS, UNDER THE BANKING REGULATION ACT, 1949, INCORPORATED UNDER THE COMPANIES ACT, 1956, AND HAVING ITS REGISTERED OFFICE AT 'TRISHUL', 3RD FLOOR, OPPOSITE SAMARTHESHWAR TEMPLE, LAW GARDEN, ELLIS BRIDGE, AHMEDABAD -380 006, GUJARAT. AND HAVING ONE OF ITS BRANCH OFFICE AT PEEKAY'S ARCADE, DOWN HILL, MALAPPURAM 676 519, KERALA. REPRESENTED BY ITS BRANCH HEAD, MR. SAJU.S. AGED ABOUT 50 YEARS, ALSO AT S/O SRISA AMBALAPPAD IRUVALLUR, VTC CHELANNUR DISTRICT, KOZHIKODE, KERALA-673616. …PETITIONER (BY SRI. UNNIKRISHNAN M., ADVOCATE) Digitally signed by CHAITHRA A Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 AND: 1. THE STATE OF KARNATAKA BY CEN CRIME POLICE STATION, CHIKKABALLAPURA DIVISION, CHIKKABALLAPURA. REPRESENTED BY SPP HON'BLE HIGH COURT OF KARNATAKA, BANGALORE-01. 2. MARUTHI. H. BHAJANTRI. S/O. HANUMANTHAPPA, AGED ABOUT 42 YEARS, POLICE CONSTABLE, R/AT. ANAKANURU VILLAGE, CHIKKABALLAPURA TALUK-562101. …RESPONDENTS (BY SRI. RAHUL RAI K., HCGP FOR R1) THIS CRL.P IS FILED U/S.482 OF (FILED U/S.528 BNSS) CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 26.03.2025 PASSED BY THE II ADDITIONAL SENIOR CIVIL JUDGE AND JMFC CHIKKABALLAPURA IN CRIME NO.90/2022 THAT IS ANNEXURE C DIRECTING TO DEFREEZE THE CURRENT ACCOUNT NO.922020047110736 MAINTAINED IN THE PETITIONER'S BANK. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The captioned petition is filed by the petitioner – a Scheduled Commercial Bank/Financial Institution, assailing - 3 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 the legality and validity of the order dated 26.03.2025 passed by the Court of the II Additional Senior Civil Judge and JMFC, Chikkaballapura in Crime No.90/2022. By the impugned order, the learned Magistrate directed the petitioner-Bank to defreeze the current account bearing No. 922020047110736, maintained in the petitioner’s branch, standing in the name of the accused. 2. The petitioner-Bank is gravely aggrieved by the impugned order essentially on the ground that it was passed without affording the Bank an opportunity of hearing, though the directions were addressed exclusively to it. It is the specific grievance of the petitioner-Bank that the order was made at the instance of respondent No.2 – the complainant, without impleading or notifying the petitioner-Bank, which is a necessary stakeholder. 3. Learned High Court Government Pleader, placing reliance on orders passed by a Co-ordinate Bench of this Court in similar and analogous matters, submitted that in - 4 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 identical circumstances this Court has interfered with such orders and has remitted the matter back to the jurisdictional Magistrate for fresh consideration of applications filed under Sections 451 and 457 of the Code of Criminal Procedure, 1973 (“Cr.P.C.”). In those cases, this Court has consistently taken the view that since directions are issued to the Financial Institutions to defreeze accounts, they are indispensable parties to such proceedings, and hence the principles of natural justice require that they be heard before any coercive direction is issued. 4. The petitioner-Bank has further urged that there are multiple criminal cases registered against the accused, not only within the State of Karnataka but also across various jurisdictions in the country. In several of these cases, different courts have issued orders directing the petitioner-Bank to defreeze the bank accounts of the accused and transfer the balances to the respective complainants. In the absence of being heard in each - 5 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 proceeding, the petitioner-Bank finds itself unable to effectively and uniformly comply with these multiple and sometimes conflicting orders, thereby exposing itself to unnecessary prejudice and potential contempt. 5. This Court finds substance in the apprehensions expressed by the petitioner-Bank. The record clearly discloses that the petitioner-Bank is the entity upon which the obligation of executing the order falls. When multiple rival claims are pending in different jurisdictions, it is only appropriate that the concerned Bank is put on notice before any order is passed directing defreezing or remittance. The impugned order, having been passed without such notice, is vitiated by non-compliance with the principles of natural justice. Without going into the merits of the rival claims or entitlement of the complainant, this Court is of the opinion that the matter requires reconsideration at the hands of the jurisdictional Magistrate. - 6 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 6. Accordingly, this Court deems it fit to adopt the course followed by the Co-ordinate Bench in analogous cases, where notice to respondent No.2/complainant was dispensed with and the matter was remitted back for fresh adjudication. In the present case also, the impugned order is liable to be set aside with a direction to the learned Magistrate to re-examine the matter after issuing notice to the petitioner-Bank/Financial Institution and all other necessary stakeholders. The Magistrate shall also be at liberty to revise or reaffirm the earlier order, depending upon the existence or otherwise of rival claims. In the event it is found that there are no competing claims or conflicting directions, the Magistrate shall not be precluded from directing the Bank to remit the amount in favour of the complainant. However, in order to balance equities, it is clarified that in the event the Bank is required to remit the amount, it shall also pay interest at the rate of 8% per annum from the date of the impugned order till the date of - 7 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 actual payment, and such interest shall be calculated and transferred along with the principal sum. 7. In light of the foregoing discussion, this Court proceeds to pass the following: ORDER (i) The petition is allowed. (ii) The impugned order dated 26.03.2025 passed in Crime No.90/2022 by the II Additional Senior Civil Judge and JMFC, Chikkaballapura, is hereby quashed and set aside. (iii) The petitioner-Bank/Financial Institution is granted two weeks’ time to place before the learned Magistrate the details of rival claims and multiple orders, if any, which have been passed in respect of the same account or transactions. (iv) Upon such details being placed on record, the learned Magistrate shall ensure that the principle of priority based on the chronological seniority of orders is strictly - 8 - HC-KAR NC: 2025:KHC:38919 CRL.P No. 12534 of 2025 adhered to. The complainant entitled under the earliest valid order shall be given preference, and the remittance from the account of the accused shall be effected accordingly. (v) The entire exercise shall be completed by the learned Magistrate within six weeks from the date of receipt of a certified copy of this order. The period of six weeks shall include the two weeks’ time granted to the petitioner-Bank to submit the relevant details. (vi) The learned Magistrate shall issue fresh notice to respondent No.2 – complainant and, after affording an opportunity of hearing to the petitioner- Bank/Financial Institution, respondent No.2 – complainant, and other rival claimants, if any, shall pass a reasoned order afresh in accordance with law. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NBM