The Rajasthan High Court has made a significant ruling stating that investigating agencies cannot freeze an individual’s entire bank account but should limit action to the disputed amount. This decision arose from a case involving filmmaker Shwetambari Vikram Bhatt, whose accounts were fully frozen during a fraud investigation. The court emphasized that freezing a bank account is an exceptional measure and should be done cautiously, with appropriate legal protections.
The court specified that debit restrictions should only pertain to the alleged disputed amount, which in this instance was approximately Rs 30 crore, rather than freezing the entire account. It highlighted that blocking an account without a direct link to the alleged offense violates fundamental rights, citing constitutional provisions. The case originated from an FIR filed by Dr. Ajay Murdia against filmmakers Shwetambari Bhatt and Vikram Bhatt, accusing them of fraud and criminal conspiracy.
According to the complaint, a film production agreement was signed in May 2024 with an initial budget of Rs 40 crore, but the budget was allegedly inflated later on. The complainant claimed to have invested around Rs 44.28 crore, with nearly Rs 30 crore purportedly misappropriated through fraudulent billing. Despite the investment, only one film was released, while others remained incomplete or not started. Banks had frozen all accounts of the Bhatt couple based on instructions from the investigating officer in Udaipur.
The couple’s counsel argued that the frozen funds were legitimate professional earnings and that proper procedures were not followed. They highlighted that the freeze had severely impacted their financial activities, affecting daily expenses, salaries, loan repayments, and medical requirements. Justice Farzand Ali, presiding over the case, directed that blanket restrictions of this nature are unwarranted, with the order issued on March 28. The SHO of Bhupalpura Police Station was tasked with promptly sharing the order with the relevant banks.
