The freezing of a business account requires identification of the tainted amount to ensure proportionality, and blanket freezes violate constitutional protections against arbitrary state action.

JUDGMENT :

Sanjeeb K.Panigrahi, J.

1.In the present Writ Petition, the Petitioner seeks issuance of an appropriate writ directing Opposite Party No.6, namely State Bank of India, Paralakhemundi Branch, to forthwith de-freeze the Petitioner’s Current Account No.00000034083697729, which is stated to have been frozen without prior notice and without any lawful authority. The Petitioner further prays for a direction permitting operation of the said account, subject to lien, if any, over the specific amount duly identified in connection with any pending investigation, and to allow full and unrestricted operation of the remaining balance therein.

I. FACTUAL MATRIX OF THE CASE:

2. The Petitioner is a duly appointed LPG distributor operating under the name and style of M/s. Sairam Bharat Gas, engaged in the supply of domestic as well as commercial LPG cylinders to households and business establishments throughout Gajapati District, Odisha. The distributorship functions under the aegis of Bharat Petroleum Corporation Limited and is stated to be carrying on business in accordance with the terms and conditions governing such appointment. The Petitioner’s establishment is duly registered under the provisions of the Goods and Services Tax Act, 2017 and also holds a valid MSME registration, thereby evidencing its lawful commercial operations with due statutory compliances.

3. The Petitioner maintains a current account bearing No.00000034083697729 with the State Bank of India, Paralakhemundi Branch for all lawful business operations, including deposits, withdrawals, supplier payments, and statutory compliance. On 2nd September 2025, the Petitioner was shocked to find that its bank account was debit-frozen without any notice, order, or any intimation. Upon oral inquiry, the Petitioner was informed by the Branch Manager of the Bank that the freezing was done pursuant to an email the Cyber Crime Police Station, Kerala, in connection with Crime No. 69/2025/CCFS/TC-S of 2025 relating to an alleged cyber-fraud. Hence, this case.

II. PETITIONER’S SUBMISSIONS:

4. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions.

(i) The Petitioner contends that it has no nexus whatsoever with the alleged offence under investigation and has neither been arrayed as an accused nor treated as a suspect in any criminal proceeding. It is further submitted that the Petitioner carries on bona fide commercial transactions in the ordinary course of its LPG distributorship business, including payments received through digital modes such as UPI and bank transfers. In this regard, a transaction with one Mr. Amit Bajubandho, a customer, has been specifically verified, and the said individual has executed an affidavit/written declaration affirming that the transaction was purely business-related and legitimate in nature, without any connection to unlawful activity.

(ii) It is further contended that the freezing of the Petitioner’s bank account has been undertaken mechanically and without jurisdiction. The investigating agency has neither quantified nor identified the alleged “tainted amount,” if any, nor has any opportunity been afforded to the Petitioner to explain or clarify the nature of the transaction prior to taking such coercive action. The indiscriminate freezing of the entire account has effectively paralysed the Petitioner’s business operations. Salaries of employees, payments to suppliers, and discharge of statutory liabilities have been adversely impacted, thereby severely disrupting LPG distribution in the district. Such action, it is urged, has directly infringed the Petitioner’s right to carry on trade and busines