Karnataka High Court Protects Sister Firms' Accounts in Online Fraud Case
Karnataka High Court says police can’t freeze sister firms’ bank accounts, grants relief to NBFC in online fraud case
The Indian Express
Image: The Indian Express
The Karnataka High Court ruled that police cannot freeze the bank accounts of sister companies during an investigation into alleged online fraud. Justice Sachin Shankar Magadum emphasized that the companies were not accused and that existing judicial orders already secured the disputed funds.
- 01Karnataka High Court ruled against police freezing sister firms' accounts.
- 02Justice Magadum highlighted the absence of incriminating evidence against the companies.
- 03The court noted existing judicial orders already secured the alleged crime proceeds.
- 04The police's actions were deemed arbitrary and legally unsustainable.
- 05The ruling reinforces the need for adherence to procedural safeguards in property seizures.
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The Karnataka High Court has granted relief to Mufin Green Finance Limited and Mufin Technologies Private Limited by ruling that the police cannot freeze their bank accounts during an investigation into alleged illegal online gaming activities. Justice Sachin Shankar Magadum stated that the police's directive was arbitrary and violated legal principles, as the companies were not named as accused in the investigation. The court emphasized that coercive measures cannot be applied without incriminating evidence and highlighted that judicial orders already secured the funds in question. The ruling also pointed out that the police failed to follow the procedural safeguards mandated by the Bharatiya Nagarik Suraksha Sanhitha (BNSS) before freezing the accounts. This decision underscores the importance of legal protections for companies not directly implicated in criminal allegations.
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This ruling protects the financial interests of companies not involved in criminal activities, ensuring that law enforcement follows due process.
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