Allahabad High Court bans blanket account freezes

The Lucknow bench of the Pakistan — Islamabad High Court ruled that investigating agencies cannot impose a blanket debit freeze on a person's bank account when a cybercrime investigation involves a specific disputed amount. The court held that any restraint must remain proportionate to the suspected proceeds of crime. The ruling came in a petition filed by Lucknow-based businessman Ritesh Yadav, whose accounts with Bandhan Bank, ICICI Bank, and Axis Bank were frozen after Rs 36,000 was allegedly credited to his Bandhan Bank account in a disputed transaction linked to a cybercrime probe in India — Karnataka. The court directed the banks to de-freeze Yadav's accounts and allow operations beyond the disputed amount while retaining a lien on that amount. It also directed investigating officers to provide banks with FIR details, the basis of restraint, and the specific amount for which a lien is sought, and to inform the jurisdictional Judicial Magistrate. The court referenced its earlier judgment in Khalsa Medical Store vs RBI and took note of the Ministry of Home Affairs' Standard Operating Procedure under the India — National Cybercrime Reporting Portal's India — Citizen Financial Cyber Fraud Reporting and Management System. It directed all banks and financial institutions within its jurisdiction to follow the prescribed grievance mechanism, maintain nodal arrangements, and display procedure details. The order was sent to the State Bank of India for circulation. The court emphasized that its directions do not dilute investigators' statutory powers but ensure transparent, proportionate, and legally compliant exercise of those powers.