The Lucknow bench of the Allahabad high court has ruled that investigating agencies cannot impose a blanket debit freeze on a person’s bank account when the alleged cybercrime transaction involves a specific amount. Restraint must remain proportionate to the suspected proceeds of crime, it held.
The court directed all banks and financial institutions within its territorial jurisdiction to follow the prescribed mechanism, maintain appropriate nodal arrangements and prominently display information about the procedure at branches and on their websites.
He claimed that the freezing originated from a cybercrime investigation in Karnataka after ₹ 36,000 was allegedly credited into one of his bank accounts in a disputed transaction. The petitioner, a construction material supplier, had approached the court after his accounts with several banks were frozen. The court emphasised that its directions were not intended to dilute the statutory powers of investigating agencies but to ensure that such powers are exercised in a transparent, proportionate, and legally compliant manner.
The bench directed that a copy of the order be sent to the RBI for circulation to banks and financial institutions, so that their officers and staff are made aware of the grievance mechanism.
The court said the power to freeze bank accounts during a cybercrime investigation cannot be treated as an unfettered power to bring an individual’s entire financial life and legitimate business activity to a standstill. The court said the mechanism must provide an effective and time-bound remedy to account holders whose banking facilities have been suspended, while protecting the amount actually under investigation.
