Bank Account Can't Be Frozen Under UAPA Without Order Of Central Govt Under S.7(1) : Madras High Court

The bench of Justice MS Ramesh and Justice Sunder Mohan observed that as per Section 7(1) of the UAPA while passing a prohibitory order, an inquiry had to be conducted. The court noted that in the present case, no such inquiry had been conducted. Thus, the court found the order violative of Articles 14 and 21 of the Constitution.

“When Section 7(1) mandates an inquiry to be conducted before passing of a prohibitory order, which admittedly has not been conducted in the present case, the consequential order would be in violation of Articles 14 and 21 of the Constitution of India, apart from violating the principles of natural justice. On this sole ground, the impugned order cannot be legally sustainable,” the court observed.

The account of the trust was frozen upon an order from the Assistant Commissioner of Police, claiming that the trust was an Islamic Centre of the Popular Front of India which had been declared a banned organisation under the UAPA.

The trust claimed that it was an independent Trust and had no nexus with the PFI or had used its funds for any unlawful activities or against the objectives of the Trust. It was submitted that the order calling for freezing was in violation of principles of natural justice as neither a prior opportunity was given nor the impugned order was served on the trust. The trust also questioned the Assistant Commissioner's authority to pass the prohibitory order.

The ASG, on the other hand, argued that when powers under Section 7 were invoked against any person or Trust which aided an unlawful association, no inquiry had to be conducted or opportunity of hearing extended to such persons or trusts.

The court noted that as per Section 7(1) of the UAPA, the Central Government could pass a prohibitory order if it came to the subjective satisfaction that any person aids or assists an unlawful association with money or is in the custody of money, securities or credits which is used or intended to be used foe the purpose of unlawful association. However, the section mandated the central government to conduct an inquiry before passing prohibitory order.

The court noted that in the present case, the Central Government hade not expressed how they had arrived at the subjective satisfaction and not were in a position to substantiate the nexus between the Trust or PFI.

To the Trust's argument that the Assistant Commissioner did not have any power, the court disagreed with the same and noted that as per the Act, the Central Government could delegate the powers exercised by it to the State Government. The court noted that after declaring UAPA as an unlawful association, the Gazette notifications, and the powers of the Central Government were given to the State Government. Through another notification, the State Government gave its powers to the commissioner of Police in the cities and District Collectors elsewhere.

The court thus noted that the Assistant Commissioner's order could not be termed as sub-delegation but only an implementation of the orders passed by the Commissioner of Police for taking necessary action as per law and for sending an action taken report.

However, since proper inquiry as contemplated under the Act was not followed, the court thought it fit to quash the order. The court, however, made it clear that the present order would not stand as an impediment to the appropriate authority to pass orders according to law.

Counsel for the Petitioner: Mr..Abdul Basith

Counsel for the Respondents: Mr.E.Raj Thilak Additional Public Prosecutor assisted by Mr.Aravind.C, Mr.AR.L.Sundaresan, Additional Solicitor General assisted by Mr.R.Rajesh Vivekananthan

Citation: 2024 LiveLaw (Mad) 141

Case Title: M/s.Tamil Nadu Development Foundation Trust v. The Assistant Commissioner of Police

Case No: W.P.No.11821 of 2023