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Company's Bank Account Can't Be Frozen For Criminal Investigation Against Unrelated Party : Supreme Court

Team SoOLEGAL 12 May 2023 5:53pm

Company's Bank Account Can't Be Frozen For Criminal Investigation Against Unrelated Party : Supreme Court

New Delhi: On Tuesday, the Supreme Court overturned a freezing order and subsequent bank guarantee imposed on a Foreign Institutional Investor company because such actions were based on a criminal case proceeding against a person who had no link with the company.

The freezing order and the bank guarantee in extension of the freeze order were related to the investigation of claims against Dharmesh Dosi, one of the accused persons in the 2001 Stock Broker Scam, according to a Bench compromising of Justice Krishna Murari and Justice Sanjay Kumar. The Bench determined that the appellant corporation had no connection with Doshi. In addition, neither the FIR nor the charge sheet listed the corporation as an offender. In light of this, it was noted -

"When the appellant company and the accused Dharmesh Doshi are two separate entities, and the appellant company is in no way connected to the concerned Investigation, the operation of the freeze order against the appellant company, is not legally tenable" The Court also noted that the freeze order against the appellant company, is not legally tenable.”

The Court also found that the freeze order had been in effect for 17 years, incurring the corporation significant damages.



Tagged: Bank Account   Criminal Investigation  
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