The Allahabad High Court (Lucknow Bench) has quashed a debit freeze notice issued by the Cyber Crime Police, Hyderabad, ruling that a “blanket notice” to freeze an entire bank account without specifying the disputed amount or providing a seizure order is “illegal and arbitrary.”
The Division Bench comprising Justice Shekhar B. Saraf and Justice Manjive Shukla held that under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, investigating agencies cannot seek to block an entire financial account merely on suspicion. The Court directed the immediate de-freezing of the petitioner’s account, emphasizing that the police must strictly adhere to the procedure prescribed under Sections 94 and 106 of the BNSS.
Background of the Case
The writ petition was filed by Khalsa Medical Store through its proprietor, Yashwant Singh, challenging the freezing of his bank account maintained with Axis Bank. The debit freeze was initiated following a notice issued under Section 94/106 of the BNSS by the Investigating Officer, Cyber Crime Police Station, Rachakonda, Hyderabad, in connection with Crime No. 520/2025. The police alleged that the account was being used for fraudulent transfers of money from a victim’s account.
Counsel for the petitioner, Shri Jalaj Kumar Gupta, argued against the freezing of the account. Shri Amit Jaiswal Ojus, appearing for Axis Bank, submitted that the bank received the notice on November 21, 2025, seeking a debit freeze. However, the bank informed the Court that it had neither received any formal seizure order from the police nor any indication of the specific amount required to be put under lien. Despite the bank writing several letters to the Investigating Officer, no further documents or details were provided.
Notably, despite several notices, no one appeared on behalf of the Investigating Officer from Telangana.
Court’s Analysis and Observations
The High Court examined the provisions of Section 106 (Power of police officer to seize property) and Section 94 (Summons to produce document or other thing) of the BNSS, 2023.
The Bench referred to several precedents, including the Supreme Court’s decisions in State of Maharashtra v. Tapas D. Neogy (1999) and Teesta Atul Setalvad v. State of Gujarat (2018), which established that while bank accounts are considered “property” liable for seizure, a report must be submitted to the Magistrate.
The Court specifically relied on the principles laid down by the Rajasthan High Court in Dharmendra Chawra Harish Bhai Vs. State of Rajasthan and the Kerala High Court in Dr. Sajeer v. Reserve Bank of India, which held that freezing orders must be proportionate to the alleged crime proceeds and not cover the entire account.
Synthesizing the law, the Allahabad High Court laid down the following key principles for freezing bank accounts in cyber crime cases:
- Reasonable Belief: Section 106 of BNSS does not empower police officers to intervene based on “mere suspicion”; action must be bolstered by “reasonable belief.”
- Specific Amount: The notice under Section 106 may require marking a lien on a specific amount allegedly transferred. The Court stated: “In no case the police may ask or request any bank or payment system operator… to block or suspend entire financial account.”
- Mandatory Information: The police must provide the bank with a copy of the FIR and a seizure order.
- Magistrate Intimation: Information regarding the block or lien must be sent to the jurisdictional Judicial Magistrate within 24 hours. Failure to do so “may render such an action as void.”
The Decision
The Court observed that the Investigating Officer had failed to indicate any specific amount in the notice issued to the bank. Furthermore, neither the FIR copy nor the seizure order was provided to the bank, despite requests.
Justice Saraf, dictating the judgment, observed:
“In our view, this entire action is unjustified and illegal. One may understand a situation wherein there is a requirement for freezing an account for a limited period so that the proceeds of crime are not removed. However, even in these extreme cases, it is incumbent upon the Investigating Officer to provide the bank within three to four days the seizure order passed for putting a lien on the bank account, the case number on the basis of which such lien/freezing is being conducted, as well as, provide the amount on which the lien is sought to be created.”
Consequently, the Court quashed the impugned notice and directed the bank to “immediately de-freeze the accounts of the petitioner and allow the petitioner to carry on his normal banking activities.”
Case Details:
- Case Title: Khalsa Medical Store Thru. Prop. Yashwant Singh Versus Reserve Bank Of India Thru. Governor And 3 Others
- Case Number: WRIT-C No. 12211 of 2025
- Coram: Justice Shekhar B. Saraf and Justice Manjive Shukla
- Counsel for Petitioner: Jalaj Kumar Gupta
- Counsel for Respondent (Bank): Amit Jaiswal Ojus
