Frozen Assets Unthawed: Allahabad HC Curbs Blanket Bank Freezes in Cyber Crime Probes

In a landmark batch ruling delivered on April 8, 2026, the Allahabad High Court clarified police powers under the Bharatiya Nagarik Suraksha Sanhita (BNSS), holding that while no prior notice is needed to freeze bank accounts suspected in cyber crimes, authorities cannot immobilize entire accounts—only the tainted amounts. Justices Ajit Kumar and Swarupama Chaturvedi (who penned the judgment) heard 10 connected writ petitions from account holders like Ashish Rawat, Tarkeswar Tiwari, and others, whose funds were locked by banks such as SBI, HDFC, and PNB on cyber police instructions.

A Trail of Sudden Lockouts

The saga unfolded amid surging cyber fraud complaints, often from distant states like Karnataka, Gujarat, and Telangana. Petitioners—ranging from a retired government employee relying on pension deposits to a school teacher facing loan defaults—discovered their accounts frozen without warning. Transactions as trivial as Rs. 60 or Rs. 1,000 were flagged via portals like the Cyber Crime Acknowledgement system or CFCFRMS.

For instance, Tarkeswar Tiwari's multiple accounts (totaling Rs. 9.31 lakh across SBI, Axis, HDFC, and payment banks) were hit due to "illegal deposits from unknown sources." Priyanka Tiwari and Priyank Pratap Singh echoed hardships, unable to pay EMIs or sustain livelihoods. No FIRs, summons, or magistrate orders were shared; freezes stemmed from SHO directives, sometimes verbal. Writs sought mandamus to defreeze, citing Articles 226 rights and BNSS violations.

As reported by LiveLaw (AB) 210 , these cases highlighted a pattern: innocent "mule" accounts inadvertently routing fraud proceeds, crippling users amid multi-jurisdictional probes.

Petitioners' Cry: Arbitrary Chains on Legitimate Funds

Counsel like Senior Advocate S.F.A. Naqvi argued freezes were "de hors" BNSS Section 106 (seizure power), lacking magistrate intimation or proportionality. They invoked Kerala HC's Headstar Global Pvt. Ltd. v. State of Kerala (2025 SCC OnLine Ker 3546), Bombay HC's Kartik Yogeshwar Chatur v. Union of India (2025 SCC OnLine Bom 4778), and Delhi HC's Malabar Gold v. Union of India (2026 SCC OnLine Del 297), urging liens only on disputed sums, not blanket blocks.

Jurisdictional hiccups were flagged: Bengaluru complaints freezing Jhansi or Ballia accounts. No complicity was alleged; victims pleaded livelihood ruin without hearing.

State's Shield: Swift Action Trumps Notice in Cyber Shadows

Union counsel Tushar Kant defended via Ministry of Home Affairs' SOP (issued Jan 2, 2026), stressing freezes prevent laundering under Sections 106/94 BNSS. Standing Counsel Anubhav Chandra emphasized no pre-notice mandate in Section 106(1)—unlike Section 107's show-cause—allowing immediate police action, with post-seizure magistrate reports. Banks like SBI argued compliance with police requests; jurisdictional nod went to the branch locale, per Section 106(3).

Parsing Powers: Seizure vs. Attachment in BNSS Battlefield

Drawing on Supreme Court precedents like State of Maharashtra v. Tapas D. Neogy ((1999) 7 SCC 685)—affirming bank accounts as "property" under Section 102 CrPC (now 106 BNSS)—and Teesta Atul Setalvad v. State of Gujarat ((2018) 2 SCC 372)—no prior notice needed—the bench dissected:

  • Section 106 : Police seize suspected/stolen property sans notice for evidentiary preservation; report to SHO/magistrate post-facto.
  • Section 107 : Magistrate-led attachment of crime proceeds, with notices/hearings.

Distinguishing High Court views, the court rejected absolute bans on account freezes but limited scope: "Power of seizure is limited to the extent of the alleged or suspicious amount... entire amount lying in a bank account cannot be freezed."

SOP integration reinforced: Specify taint via CFCFRMS; banks notify holders post-freeze. Jurisdiction? Account's situs governs, quashing multi-state qualms.

Key Observations Straight from the Bench

"The police officer can instruct the freezing of the bank account... with full compliance of Section 106 BNSS and not dehors the same."

"Nowhere in the statutory scheme there is any requirement that prior notice must be given to the owner of the property... power to seize vests directly with the police officer."

"Sections 106 and 107 BNSS operate at distinct stages... Seizure under Section 106 is therefore immediate and investigatory... while attachment under Section 107 is precautionary."

"Bank account holders... are at least entitled to be informed of the seizure of their accounts... to protect themselves from hardships."

Relief Rolled Out: Liens, Not Locks

Eight petitions allowed: Banks must lien only specified suspicious sums within a week, restoring full operations. Petitioners free to approach jurisdictional magistrates for full defreezes. Two rendered infructuous (already defrozen); one ( Sarfaraj ) abides magistrate outcome.

This balances probe urgency with rights, curbing overreach in India's cyber fraud epidemic. Future cases? Expect precise liens, prompt bank alerts, and magistrate oversight—easing innocent pain while nabbing digital crooks.