UT Admn’s letter seeks release of frozen accounts; HC asks ‘under what authority’
CBI took over investigation on April 27; under what authority in law, admn had issued this letter dated May 2, court asked
The plea said that three FIRs were registered in connection with the alleged fraud by the Haryana Anti-Corruption Bureau, and FIR Nos 2 and 3 of 2026 by Chandigarh authorities. The Punjab and Haryana High Court Monday asked the Chandigarh Administration to explain “under what authority in law” it had issued a letter dated May 2, 2026, after the CBI took over the investigation in two FIRs — linked to the alleged multi-crore IDFC First Bank fraud case. The court questioned the UT administration over its communications to banks seeking release of frozen accounts, even after the investigation had been transferred to the CBI.
Hearing a writ petition filed by the IDFC FIRST Bank, the division bench of Chief Justice Sheel Nagu and Justice Sanjiv Berry observed, “Counsel for UT Administration… is required to seek instructions in regard to letter dated May 2, 2026, especially in the backdrop that when investigation in FIRs No 02 and 03 dated March 9, 2026 and March 12, 2026, respectively, both registered at Economic Offences Police Station, Sector 17, Chandigarh, was transferred to CBI on April 27, 2026, then under what authority in law, the UT Administration had issued this letter dated May 02, 2026.”
Appearing for the petitioner bank — IDFC First Bank, Senior Advocate R S Rai, along with Advocates Rubina Vermani, Sukriti Rai and Arjun S Rai, argued that the bank was “a victim of a complex, large-scale financial fraud involving misappropriation of… funds from bank accounts of its customers primarily being government department accounts of Haryana and Chandigarh perpetrated by certain individuals in connivance with public officials”.
The plea said that three FIRs were registered in connection with the alleged fraud by the Haryana Anti-Corruption Bureau, and FIR Nos 2 and 3 of 2026 by Chandigarh authorities. It also submitted that on April 8, 2026, the Haryana ACB investigation was transferred to the CBI, which re-registered the matter.
Referring to the steps taken after the alleged fraud surfaced, Rai submitted before the HC that it had filed NCRP complaints on February 22 and March 5, 2026, “to aid in identification of the money trail”, adding that “thereafter, liens have been marked on various beneficiary accounts which have received the money transferred from the government department accounts”.
The petitioner bank, through counsels, further sought issuance of directions “to safeguard and prevent dissipation of the amounts in the bank accounts of beneficiaries of the fraud/recipients of funds identified and lien marked through the Indian Cyber Crime Coordination Centre (‘I4C’) pursuant to the Petitioner’s complaints on the National Crime Reporting Portal (‘NCRP’)”.
The bank also sought directions to enable authorities “to identify the money obtained through fraud/proceeds of crime and initiate appropriate proceedings to seize/attach in accordance with law”.
The High Court on the matter repeatedly asked the UT Administration to explain the legal basis for the communications.
“So, this investigation stands transferred to the CBI… CBI is seized with the investigation,” the Bench observed orally during the hearing.
Questioning the continuation of correspondence by the Chandigarh Police, the court also remarked orally: “What authority that the UT Administration had to issue this letter after the transfer?”
The matter has been listed for further hearing on May 14.
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