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The trust contended that it was neither provided with a chance to raise objections before it's bank account was frozen nor was the freezing order communicated to the trust till date
The Madras High Court has recently quashed a Chennai city police order to freeze a trust's bank account for allegedly funding activities of the banned group Popular Front of India (PFI).
The Tamil Nadu Development Foundation Trust, which also runs institutions in the name of 'Arivagam' in Theni and Tirunelveli Districts, maintained a savings bank account with Indian Bank in Chennai. The account was frozen in 2022 in pursuance of the order of the Assistant Commissioner of Police, Greater Chennai passed on the ground that the Trust was an Islamic Centre of the PFI. The order of the ACP was passed in the exercise of power under Section 7 of the UAPA which provides 'power to prohibit the use of funds of an unlawful association'.
Seeking relief before the high court, the trust's managing trustee M Mohammed Ismail claimed that the trust had no connection or nexus with the PFI and no funds of the Trust had been ever used for any unlawful activities or against the object of the Trust.
The counsel representing the petitioner also contended that the ACP's order was in violation of the principles of natural justice since neither a prior opportunity was given to the trust to put forth its objections nor was the impugned order communicated or served on the trust till date.
The bench of Justices MS Ramesh and Sunder Mohan noted that, per the procedure prescribed under Section 7(1) of the UAPA, an inquiry is mandated before passing any prohibitory order.
Court pointed out that admittedly, apart from relying upon certain documents from the digital devices, the Central Government had not expressed how they had arrived at a subjective satisfaction that the trust's account was being used to fund PFI's activities.
"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," the division bench held.
Moreover, the court considered that the impugned prohibitory order was never served on the trust. "Whenever any coercive action is initiated by the respondents by invocation of Section 7 of the UAP Act, there is a duty cast on them to inform the affected party about the action taken," said the court.
Such a prohibitory order requires to be served on the affected party, which is crucial, since sub-section 4 provides for an alternate remedy against the prohibitory action taken, court stressed.
Therefore, court quashed the impugned order and directed that the trust's bank account shall stand de-frozen and the trust would be at liberty to operate the bank account.
"However, the present order shall not stand as an impediment for the appropriate authority to pass orders in accordance with law," court added.
Case Title: M/s.Tamil Nadu Development Foundation Trust v. The Assistant Commissioner of Police, Vepery Range and Others
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