• Can a bank freeze account of a partnership firm based on retired partner letter

We run a partnership Firm with Two Partners in Chennai having current account in a private bank in this situation second partner didn't want to continue in the firm as we have some credit over the firm and he was retired on Jan 22 2019 by Registrar of Firms after he affixed his signature only new partner joined the firm on 22.01.19 , we communicated the same to the Branch Manager orally on the very same day as we didn't get any certified copies from the Registrar of Firms,in the mean time Retired Partner colluded with Branch Manager and Freezed our current Account even without any enquiry or prior notice on 01.02.19 but sent a notice only on 22.02.19.In the mean time Retired Partner filed an OS in city civil court not to de freeze the account. Can a bank freeze account without even hearing us? What remedy can we seek now? How to defreeze the account with our documents?
Asked 7 years ago in Civil Law

First answer received in 10 minutes.

Lawyers are available now to answer your questions.

17 Answers

Bank is on fault, first please gather information or the documents on the basis of which the bank has freezes the account if some irrelevant paper is with them then please write the clarification for which an application for defreezing the account which should be signed by all the directors of the firm be moved in the name of the branch manager, please hurry in this regards because till date no order from the court is there if they will be successful in obtaining the order to freeze the account from the court then more difficulties will arise.

Koshal Kumar Vatsa
Advocate, Gurgaon
2282 Answers
3 Consultations

They need to invite your objections before doing so. They can only do it directly with court's order. You can file a Complaint with banking ombudsman or Consumer court for compensation

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

You should have intimated bank in writing about retirement of partner 

 

2) since partner has retired bank ought not have freezed your current  t account 

 

3) since retired partner has gone to court against de freezing of account bank would wait for court orders before Dee freezing your account 

 

4) better open an account with another bank 

Ajay Sethi
Advocate, Mumbai
99782 Answers
8145 Consultations

To safeguard the interest of the partner in case the partner is writing to the bank remind me in the bank will freeze your account till the time that the retired partner is not been paid his the amount by the form and from should be dissolved to get a new registration and introduction of new partner there is no compulsion of running the form in the same name.

If you have any representation in this case then you have to file a writ petition in the High Court and make the bank as a party and get the direction from my High Court

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

See give a letter to bank intimating retirement of partner and unfreezing the account , it was your duty to intimate bank in writing.  So give bank a letter seeking unfreezing of bank account if bank fails then you have to file before seeking court order for unfreezing of bank accounts.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

Dear Client, 

Freezing account is without due process. You should complain to RBI. Secondly partner already resigned from the firm,  hence no authority to operate account in firm's name. File cross objection in court that he has no locus standi to file suit to freeze account as he voluntarily without any dispute resigned from firm.

Also pray in cross objection to order de freeze of account. As you are most effected party. 

Yogendra Singh Rajawat
Advocate, Jaipur
23081 Answers
31 Consultations

Pending suit the bank can freeze if the dispute revolves around the accounts.

Rajaganapathy Ganesan
Advocate, Chennai
2300 Answers
8 Consultations

Hi,

You are suggested to send a legal notice to the bank to de-freeze the account and if the same is not done by the bank manager, file the suit of specific relief in the district court. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

There is no specific section in the Partnership Act which states that single partner has absolute authority to freeze the bank account.

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1. The Branch Manager did not have any document evidencing that the said person has retired and a new partners has been substituted in his place as has been recorded with the Registrar.

 

2. In absence of any such document submitted by you, the BM shall consider the retired partmnenr as the existing partner and based on his letter the BM can freeze the account of your said partnership firm.

 

3. Now, submit the necessary document to establish that the earlier partner has retired and a new partner has joined your firm for which the account of your firm should be made operative.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

Since the retired partner has filed  a suit in the city civil court, you may first attend the cae and challenge his case properly and also you may file a petition to implead the bank manager for remedy 

In that application you may claim that the bank has no authority to freeze the account without an intimation from the company.

For the present you may have to concentrate in the court case only.

 

 

T Kalaiselvan
Advocate, Vellore
89984 Answers
2492 Consultations

1) you need court orders to de freeze account 

 

2) file police complaint of cheating, criminal breach of trust against retired partner 

 

3) you have to contest false suit filed by retired partner 

 

4) draw attention of court that partner retired willingly and registrar of forms was intimated 

 

5) police complaint filed against him for swindling of funds 

Ajay Sethi
Advocate, Mumbai
99782 Answers
8145 Consultations

1. You can file a petition under Order VII Rule 11 CPC seeking to reject the plaint for the reasons you rely upon.

2. You have to file a writ before high court seeking direction to bank to de freeze the account.

3. To his notice claiming funds you may issue a reply marriage making him liable for company's credit as well.

4. Lodge a criminal complaint with local police.

5. It need not be registered for initiating the above processes.

T Kalaiselvan
Advocate, Vellore
89984 Answers
2492 Consultations

1. Fir file written statement to the plaint and along that also file an application for order 7 rule 10 and 11 for rejection of plaint.

2. If bank fails to release accounts file writ before high for direction .

3.crossCobjection of his plaint can be filed.

4. Police complaint can be filed against the partner.

5. Unregistered partnership deed is also valid in law.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

For criminal action you need to register an FIR for criminal breach of trust and misappropriation of funds. If police doesn't take any action then you need to file Complaint under section 156(3) of the crpc.

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

Hi,

For rejection of the plaint you are suggested to file an application under order 7 rule 11 of Civil Procedure Code. You may also file a separate case against the bank manager asking the directions to defreeze the account. The retired partner would be liable for credit to company till the date of his resignation. The retired partner may filed taken into account for mishandling of funds under section 409 of IPC and for this criminal complaint lie against him. The arbitration clause may also be added at later stage with agreement of parties. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

1. You shall have to contest the case filed by your retired partner fittingly and get it dismissed.

 

2. Once the said case filed by your retired partner is dismissed, you can operate your said account.

 

3. It is obvious that the retired partner will be liable for the liabilities also if he claimns the share on the funds lying with the Firm's bank account.

 

4. You can lodge a police complaint against him making the said allegation and if the police refuse to register FIR, you can file a writ petition before the High Court against police inaction praying for an order upon police to register FIR, investigate and act based on your said complaint.

 

5. However, make sure that you have complied with all the terms of the partnership agreement while retiring the said partner.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer