Freezing a bank account without evidence of direct involvement in fraud violates the right to conduct business under the Constitution.

Order

08/07/2025

1. The petitioner has approached this Court with a grievance that in spite of the fact that he has not been found involved in fraudulent transactions; any illegal activities or a Cyber crime, the respondent-Bank has frozen his bank account without any intimation/prior notice.

2. Learned counsel for the petitioner at this juncture prayed that the issue as to whether the Investigating Agency can freeze the account and stop all the debit transactions in petitioner’s bank account, without there being any direct nexus with the offence or the offender, can be decided at later point of time; however, a direction be issued to respondent-bank to allow the petitioner to operate his bank account, may be with a stipulation that the Bank would keep a lien over the disputed amount or the amount which is alleged to be receipt(s) of offence.

3. Having heard learned counsel for the petitioner and considering that the petitioner is not directly involved in the fraudulent transaction or with cyber fraudster, this Court is of the view that simply because in one form or other, the amount has been transferred to petitioner’s bank account, consequent to bonafide business transactions, freezing of the entire bank account and the complete embargo on the transactions, amounts to violation of fundamental right of the petitioner to carry business, guaranteed under Article 19(1)(g) of the Constitution of India .

4. Issue notice. Issue notice of the stay application as well, returnable on 04.08.2025.

5. Meanwhile, the respondent-bank shall keep lien of the amount to the extent it relates to receipt(s) of offence. Keeping such amount under lien, the respondent-Bank shall allow the petitioner to operate his bank account over and above such amount in accordance with law.

6. In case, where the respondent-bank has not received the exact amount, which the Investigating Officer alleges to be receipt(s) of crime or offenders, the bank shall send a communication to the corresponding Investigating Officer/authority to indicate the amount to be earmarked for lien, while endorsing a copy of the order instant.

7. It shall be required of the concerned Investigating Officer/authority to apprise the respondent-bank about the amount to be kept in lien within a period of seven days of receiving the communication from the respondent-bank. The respondent-bank shall thereafter do the needful as directed hereinabove.