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The HC held that, as a "reporting entity" under the PMLA, the respondent bank may, based on suspicion of proceeds of crime, impose a temporary debit freeze on customer accounts under its contractual and statutory obligations, even absent a specific requisition from a law enforcement agency. However, such freezing must be reasonable and time-bound. The HC fixed a maximum reasonable period of three months for continuation of the debit freeze, during which law enforcement agencies must act. If no investigative or coercive action is initiated within this period, the bank must lift the freeze. The bank was directed to notify all specified authorities of the account freezing within two working days and to comply with the procedural guidelines set out in the judgment. The writ petitions were disposed of on these terms.
The HC held that, as a "reporting entity" under the PMLA, the respondent bank may, based on suspicion of proceeds of crime, impose a temporary debit freeze on customer accounts under its contractual and statutory obligations, even absent a specific requisition from a law enforcement agency. However, such freezing must be reasonable and time-bound. The HC fixed a maximum reasonable period of three months for continuation of the debit freeze, during which law enforcement agencies must act. If no investigative or coercive action is initiated within this period, the bank must lift the freeze. The bank was directed to notify all specified authorities of the account freezing within two working days and to comply with the procedural guidelines set out in the judgment. The writ petitions were disposed of on these terms.
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