The Hindu (Mumbai)

Bank accounts cannot be frozen under UAPA without satisfacti­on that funds are being used for banned outfits: Madras High Court

- Mohamed Imranullah S.

Bank accounts cannot be frozen under the Unlawful Activities (Prevention) Act, 1967 unless the Centre conducts an inquiry and arrives at a subjective satisfacti­on of the funds in those accounts having been used or intended to be used for a banned organisati­on, the Madras High Court has ruled.

A Division Bench of Justices M.S. Ramesh and Sunder Mohan held so while quashing an executive order freezing the savings bank account of the Chennaibas­ed Tamil Nadu Developmen­t Foundation Trust that was suspected to be aiding Popular Front of India (PFI), a banned organisati­on under UAPA.

The judges pointed out that Section 7 of UAPA empowers the Centre to prohibit the use of funds of an unlawful associatio­n and Section 7(1) prescribes the procedures to be followed before passing such prohibitor­y orders. As per these provisions it is mandatory to have a prior inquiry and a subjective satisfacti­on.

“Admittedly, in the present case, the Central Government has not expressed the manner in which they had arrived at a subjective satisfacti­on but for relying upon certain documents from the digital devices which evidence the name of PFI alone and not of the petitioner Trust,” the Bench wrote.

It went on to state,“On the specific stand taken by the petitioner Trust that it has no connection whatsoever with PFI and that the funds in its savings bank account have never been used for activities of PFI, the respondent­s are not in a position to substantia­te the nexus between the petitioner Trust and the PFI.”

Authoring the verdict, Justice Ramesh wrote: “When Section 7(1) mandates an inquiry to be conducted before passing of a prohibitor­y order, which admittedly has not been conducted in the present case, the consequent­ial order would be in violation of Articles 14 (equality before law) and 21 (protection of life and personal liberty) of the Constituti­on apart from violating the principles of natural justice.”

The Division Bench also agreed with the petitioner’s counsel I. Abdul Basith that his client could not be expected to have availed of the alternativ­e remedy of approachin­g a district court under Section 7(4) of UAPA when the executive order freezing the bank account had not even been served on the Trust.

“It is needless to point out that the prohibitor­y order would have crippled the functionin­g of the Trust and disabled it from fulfilling the objects of the Trust,” the judges said.

They also wrote, “Whenever any coercive action is initiated by the respondent­s by invocation of Section 7 of the UAPA, there is a duty cast on them to inform the affected party about the action taken. In other words, such a prohibitor­y order requires to be served on the affected party which is crucial.”

The Bench, however, rejected the petitioner’s third ground questionin­g the authority of the Greater Chennai Police to issue the order for freezing the bank account.

It pointed out that the UAPA empowers the Centre to delegate its authority to the State government which, in turn, could delegate it down the line to the police.

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