Strict compliance with PMLA freezing powers required; bank account freeze under CrPC could not be continued without proper statutory order.

Bank accounts frozen during a PMLA investigation cannot continue to remain frozen merely on the basis of Section 102 CrPC if no order has been passed under the specific PMLA provision authorising that restraint. The governing statutory mechanism under the PMLA must be strictly complied with, and a freeze that is not supported by the proper PMLA order is unsustainable. On that basis, the continued freezing of the accounts was held invalid, and the impugned letters and order were quashed.

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Issues: Whether bank accounts frozen under Section 102 of the Code of Criminal Procedure, 1973 could continue to remain frozen where no order had been passed under Section 17(1A) of the Prevention of Money Laundering Act, 2002.

Analysis: The impugned letters themselves showed that the bank accounts were frozen by invoking Section 102 of the Code of Criminal Procedure, 1973 and not under Section 17(1A) of the Prevention of Money Laundering Act, 2002. In view of the binding view that the ingredients of Section 17 of the Prevention of Money Laundering Act, 2002 must be strictly complied with, the continuation of freezing on the basis of Section 102 could not be sustained when the statutory mechanism under the PMLA had not been invoked for that purpose.

Conclusion: The freezing of the bank accounts under Section 102 of the Code of Criminal Procedure, 1973 was not sustainable and the impugned letters and order were quashed.

Ratio Decidendi: Where bank accounts are frozen in the course of a PMLA investigation without passing an order under the PMLA provision specifically empowering such action, the freeze cannot be continued merely by invoking Section 102 of the Code of Criminal Procedure, 1973.

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