Court holds police cannot independently order probe against account holder absent any criminal allegation; freezing directed only against six contested transactions.
In a significant ruling concerning bank account freezing and police investigations, the Kerala High Court (Division Bench) on 28th October 2026, allowed an appeal filed by Mohammad Irfan K.I. against the State Bank of India and police authorities. The court set aside a lower court order that not only dismissed Irfan's petition to unfreeze his bank account but also directed a police investigation into his account based on large credits noticed in the bank statement.
The appellant, Mohammad Irfan, had challenged the freezing of his bank account by the State Bank of India pursuant to a requisition from the police. He explained that the disputed entries in his account were sums given by his cousin and her husband, and sought either complete unfreezing or, alternatively, freezing limited only to the disputed amount. The Single Judge dismissed his writ petition and further ordered a police investigation into the appellant's account, a move that was challenged in this appeal.
The Division Bench, comprising Justices Devan Ramachandran and Basant Balaji, observed that the State Bank of India had acted solely on the police requisition and had no independent information about any investigation or allegation against the appellant. The police, represented by the Senior Government Pleader, confirmed that the freezing related only to six disputed entries in the appellant's account and there was no police letter implicating him in any crime.
Critically, the court held that the Single Judge erred in ordering an investigation solely based on the presence of large credits in the appellant's bank statement. Since no police officer on record alleged any involvement of the appellant in criminal activity, and the suspicion was only that the credited sums might be proceeds of crime received from creditors, the court found no basis for an independent investigation order.
The court clarified that freezing of the bank account must be confined strictly to the disputed entries identified in the police requisition and cannot be extended beyond that. The appellant's account would remain frozen only to the extent of those six specific entries. Furthermore, the State Bank of India was directed to comply with any valid future police requisitions, subject to the appellant's legal rights.
This judgment underscores the principle that police requisitions for freezing bank accounts must be precise and limited to specific disputed transactions. It also protects individuals from unwarranted investigations based solely on large bank credits without any formal allegation of crime. The ruling reinstates the need for due process and safeguards against overreach in financial investigations.
Bottom Line:
Bank account freezing pursuant to police requisition must be confined to the disputed entries specifically identified; Court cannot direct investigation against account holder merely on noticing large credits in bank statement when no police authority imputes involvement in any crime.
Statutory provision(s): Not explicitly mentioned in judgment; relevant provisions relate to police requisition powers and bank freezing orders under applicable Indian laws governing criminal investigations and banking regulations.
Mohammad Irfan K.I. v. State Bank of India, (Kerala)(DB) : Law Finder Doc Id # 3011046
