2 weeks ago
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A bank, being a custodian of funds, cannot presume the relation of an adjudicating authorization and proceed to frost accounts of an acquisition nine simply connected the ground of interior disputes betwixt rival factions of the society, said the High Court Karnataka.
“Ordinarily, debit freezing of accounts tin beryllium justified lone erstwhile it is backed by authorization of law, either astatine the lawsuit of an investigating bureau successful transportation with a cognisable offence oregon pursuant to an bid passed by a competent tribunal of law,” the tribunal observed.
In the contiguous case, the tribunal pointed retired that 8 savings slope accounts and 5 fixed deposit accounts of Sri Venkataramana Swamy Vidyavardhaka Sangha, Bantwal, successful Dakshina Kannada district, were frozen. It was done simply connected the ground of a ailment fixed by a rival faction of the relation erstwhile the entitlement of the complainants belonging to rival faction to rise immoderate quality connected money absorption itself was nether ineligible challenge, the tribunal pointed.
Justice Sachin Shankar Magadum passed the bid connected the petition filed by the sangha, which is an acquisition nine moving schools and colleges successful Bantwal. The petitioner had questioned the enactment of Canara Bank’s Bantwal subdivision successful debit freezing each its accounts based connected the ailment lodged by immoderate persons, who assertion to beryllium members of the society, alleging mismanagement of its affairs.
‘Wholly untenable’
Pointing retired that contented of complainants’ locus arsenic members of the petitioner–sangha is itself pending earlier the Registrar of Societies, the tribunal said that “the enactment of the slope successful acting upon unilateral complaints and debit freezing the accounts of acquisition institutions is wholly untenable”.
“The powerfulness to frost oregon connect slope accounts is simply a drastic measure, which has superior civilian consequences, peculiarly erstwhile exercised against acquisition institutions, whose functioning needfully involves continuous fiscal transactions for salaries, maintenance, and world activities. Such coercive enactment cannot beryllium resorted to successful a casual oregon mechanical manner, and contrary to statutory framework,” the tribunal observed.
Lack of jurisdiction
The enactment of the slope from a patent deficiency of jurisdiction amounts to an overreach and results successful paralysing the functioning of the petitioner–sangha without immoderate lawful sanction, the tribunal said. It directed the slope to defreeze the accounts and let the petitioner-sangha to run the accounts taxable to enquiry pending earlier the Registrar of Societies.
