26 March 2024 Corruption >> Criminal Law  

In a recent judgment, the Bombay High Court overturned a lower court order denying a wife access to funds frozen during her husband's criminal investigation. The husband faced charges under the Indian Penal Code (IPC) and the Prevention of Corruption Act (PC Act), ultimately securing an acquittal for offenses under the PC Act.

Facts:

The wife's bank accounts were frozen by authorities on suspicion of containing proceeds (murtabita - linked to) her husband's alleged criminal activity. While a portion of the frozen amount was released upon furnishing a bond, a separate sum of Rs. 2,00,000 remained inaccessible. This amount was directed to be invested by the Central Bureau of Investigation (CBI), with a determination of ownership deferred until the conclusion of the trial.

Lower Court Decision and Subsequent Appeal:

The trial court subsequently rejected the wife's application seeking access to the invested funds. She appealed this decision, asserting her rightful ownership of the money and its lack of connection to any criminal activity. Furthermore, she emphasized her urgent need for the funds due to a medical condition.

Appellate Court Reasoning and Decision:

The appellate court found the wife's arguments persuasive. The court noted the lower court's failure to address its prior observation regarding the ownership of the invested amount. Crucially, there was an absence of evidence linking the funds to the criminal charges or the convicted husband. The court emphasized that denying the wife access to her own funds would constitute a miscarriage of justice.

Consequently, the appellate court allowed the wife's appeal. The lower court's order was set aside, granting the wife access to the invested amount (Rs. 2,00,000) along with accrued interest. To safeguard accountability, the wife was required to furnish a bond (without security) to the trial court. The court further directed an expedited release of the funds in consideration of the wife's medical situation.

Significance of the Case:

This case underscores the potential ramifications of asset freezing during criminal investigations. While such measures are necessary to prevent the misuse of funds, authorities must ensure they do not inflict undue hardship on innocent individuals. The court's decision reinforces the importance of due process and safeguarding the legitimate financial rights of those not directly implicated in criminal activity.

  Prevention of Corruption Act, 1988    Indian Penal Code, 1860