Gauhati High Court: In a civil writ petition filed against the blanket freeze imposed on the petitioner’s bank account by the bank authorities, on account of a suspicious transaction of ₹ 1700, on the directions of cyber-crime investigating agency, a Single-Judge Bench of Manish Choudhury*, J., held that that restricting the account holder from doing any transactions impacts the person’s right to earn livelihood and to carry out business transactions, which comes within the right to life guaranteed under the Constitution. Accordingly, the Court directed the bank authorities to defreeze the account by placing a lien only to the extent of suspicious amount specified by investigating authority i.e. ₹1700 and to permit the account holder to operate the bank account with respect to the remaining balance.
Background
The petitioner, a businessman running a footwear shop, approached the Court with respect to blanket freeze imposed on his bank account without any prior notice or information.
The petitioner maintained a current bank account in the Bandhan Bank, which had been blocked since December 2020 on the grounds of a suspicious transaction or credit of ₹1700 in his bank account on 18 August 2020. The petitioner had been repeatedly approaching the bank authorities as there were more than ₹20,000 in his bank account when the transaction occurred.
The petitioner contended that in case of a suspicious transaction of ₹1700, keeping the entire bank account under debit freeze was arbitrary. Rather, the authorities could have kept a lien on alleged suspicious transaction of ₹1700 and should have allowed the petitioner to operate the bank account.
The respondents argued that the petitioner’s Current Bank Account was debit freezed on receipt of a cyber complaint through the Cyber Crime Incident Response Unit, Ahmedabad. Thus, the action of freezing the bank account was not the independent decision of the bank authorities.
Analysis
The Court observed that the action of the respondent Bank authorities in keeping the Current Bank Account of the petitioner blocked/in debit-freeze condition is not sustainable to the extent that it exceeds the scope of direction received from the investigating authority.
The Court opined that the power exercisable by the respondent Bank is not an independent power and apart from implementing the directions made by the investigating authorities, bank also acts as the custodian of bank accounts of the account holders.
The Court rejected the submission of the respondent Bank that there is a possibility of receiving more complaints of suspicious transactions or credit eventually and held that the possibility of receiving complaints in future cannot be a basis for keeping the entire amount above ₹1,700 on hold and imposing a debit freeze on the entire bank account.
The Court referred to Supreme Court judgment in State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685, where the bank account of an accused or any of his relations was held to be “property” within the meaning of Section 102, Criminal Procedure Code, 1973 (CrPC) and a police officer can seize or prohibit the operation of the said account if such assets have direct links with the commission of the offence which the police officer is investigating into.
In the light of Section 106, Nagarik Suraksha Sanhita, 2023 (BNSS), the Court stated that an order of freezing of a bank account due to a criminal investigation or complaint of suspicious transactions or credits involving a part of the total deposit, thereby, restricting the account holder from doing any transactions brings in serious and adverse consequences by impacting the person’s right to earn livelihood and to carry out business transactions, which comes within the right to life guaranteed under the Constitution. In case of suspicion about a specific transaction or amount credited, it is not reasonable to freeze the entire bank account.
The Court further held that debit freezing the entire bank account when the crime has not been established against the account holder prima facie, is not justified as the object is to seize the suspicious amount.
Decision
Since the petitioner was not an accused in any criminal case, the Court directed the banks to place a lien only to the extent of particular amount specified by investigating authority and to permit the account holder to operate the bank account with respect to the remaining balance, unless the direction itself is for complete freezing of the bank account or a statutory mandate.
Therefore, the bank was directed to keep a lien over the amount of ₹1700 by restricting the freezing order only to the extent of ₹1700 and the petitioner was allowed to operate the bank account.
[Ismail Hussain v. Bandhan Bank, 2026 SCC OnLine Gau 6695, decided on 18-9-2026]
Judgment Authored by: Justice Manish Choudhury
Advocates who appeared in this case:
Petitioner: M. Ali, HR Khan, J Uddin
Respondent: M Sharma
