The Calcutta High Court on Wednesday questioned the speed with which several bank accounts of the All India Trinamool Congress (AITC) were frozen immediately after registration of a First Information Report (FIR), observing that the complaint appeared omnibus in nature and lacked specific allegations capable of justifying such coercive action at the threshold.
The Bench of Justice Saugata Bhattacharya, hearing the party’s challenge to the debit freeze imposed on its bank accounts, expressed concern over whether the investigating agency possessed sufficient material to justify freezing the accounts within a day of registration of the FIR. The Court remarked that it was troubled by the apparent haste with which the action was taken and sought to know what material had been available with the investigating agency to warrant such immediate steps.
However, the Court declined to grant interim relief at this stage. Instead, it directed the concerned bank to place before it the corpus lying in the frozen accounts and asked the investigating agency to produce the materials collected during the investigation before the next date of hearing.
The petition challenges the debit freeze imposed on multiple bank accounts of the political party in connection with an investigation into alleged financial irregularities and diversion of party funds. The action was initiated following a complaint lodged by rebel AITC MLA Biswanath Das.
Appearing for the AITC, Senior Advocates Kishore Datta and Dr. Abhishek Manu Singhvi, assisted by Advocate Nizam Pasha, argued that the accounts had been frozen solely on the basis of vague and unsubstantiated allegations, without any legally sustainable justification. Datta submitted that the police had initially frozen three bank accounts before extending the freeze to five additional accounts, effectively paralysing the financial functioning of the recognised political party.
It was further argued that the FIR itself was founded merely on reasonable suspicion and contained only broad, omnibus allegations without identifying any specific incident, transaction, date or individual responsible for the alleged diversion of funds. Datta also questioned the invocation of organised crime provisions, contending that the statutory ingredients required proof of unlawful financial gain through continuing criminal activity, which was completely absent in the complaint.
The petitioners further contended that Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which empowers the police to seize property found under suspicious circumstances, does not authorise issuance of prohibitory orders freezing bank accounts. According to the petitioners, freezing a bank account is legally distinct from seizure of property and falls outside the scope of the statutory power conferred under the provision.
The Bench, however, clarified that it was not inclined to examine the correctness or veracity of the allegations at the interim stage. It observed that since the issues remained hazy, it would be inappropriate to undertake an in-depth examination of the criminal allegations while considering interim relief. According to the Court, the immediate question was confined to whether continuation of the debit freeze during the pendency of the investigation was legally justified.
Questioning the practical implications of the petitioners’ argument, the Court asked what recourse would remain available to an investigating agency if the allegation was that proceeds of crime had been deposited into the bank accounts under investigation. When Datta maintained that Section 106 authorises only seizure and not freezing of bank accounts, the Bench observed that permitting unrestricted operation of the very accounts under investigation could impede the investigative process and effectively cripple the investigating agency.
During the hearing, the Court also mooted the possibility of permitting limited operation of the accounts under the supervision of court-appointed Special Officers, preferably retired High Court judges. The proposed arrangement contemplated permitting only routine day-to-day expenditure while prohibiting major financial transactions until the dispute was finally adjudicated, thereby balancing the interests of the investigation with the functioning of the political party.
Solicitor General Tushar Mehta, appearing for the State Police, opposed any interim arrangement and sought time to place the investigation records before the Court. He submitted that the investigation was extensive and that the agency had already collected material indicating that party funds had allegedly been siphoned off. Mehta urged the Court to defer consideration of interim relief, stating that the investigation records would contain material capable of shocking the conscience of the Court.
Pressing for interim protection, Dr. Singhvi argued that freezing the party’s accounts had virtually brought the functioning of a recognised political party to a standstill. He described the complaint as hopelessly vague and devoid of material particulars, contending that it could not legally justify either registration of the FIR or the blanket freezing of all bank accounts belonging to the party.
Emphasising the constitutional implications, Singhvi submitted that political parties constitute an essential pillar of democratic governance and that freezing their financial resources directly affects the level playing field guaranteed under Articles 14 and 19 of the Constitution. He argued that the State could not, through coercive police action, paralyse the functioning of a recognised political party merely on the basis of a complaint lacking specific factual foundations.
The petitioners also pointed out that the complainant himself had contested and won the recent Assembly election on an AITC ticket and had received Rs. 25 lakh from the very bank accounts now alleged to contain illegally diverted funds. According to the party, this itself demonstrated the mala fide and politically motivated nature of the complaint. It was further submitted that the investigating agency proceeded to freeze the accounts without conducting any meaningful preliminary inquiry, thereby severely disrupting the organisational and financial functioning of the party.
The Court, however, indicated that it was not inclined to enter into broader political questions or constitutional issues at the interim stage and would instead examine whether the investigating agency possessed sufficient material to justify the freezing orders.
Senior Advocate Neeraj Kishan Kaul, appearing for the de facto complainant, raised a preliminary objection regarding the maintainability of the petition. He argued that rival factions were presently claiming to represent the Trinamool Congress and that the question of authorised office-bearers would ultimately fall within the jurisdiction of the Election Commission of India.
The Bench, however, observed that the complaint itself did not contain any allegation relating to rival claims over the party’s leadership. It further remarked that the complaint did not inspire confidence as it lacked specific dates, names or particularised allegations, indicating that the foundation of the criminal proceedings did not appear particularly strong. The Court also declined to permit the proceedings to travel beyond the scope of the allegations contained in the complaint.
Ultimately, while refusing to pass any interim order permitting operation or de-freezing of the accounts, the Court directed the investigating agency to place on record the corpus of all frozen accounts together with the materials collected during the investigation. Accepting the Solicitor General’s request for additional time, the Bench listed the matter for further hearing on July 8, when it will consider the investigation records before deciding the petitioners’ prayer for interim relief.
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