In a significant ruling on the freezing of bank accounts during cybercrime investigations, the Allahabad High Court has held that police authorities cannot freeze an entire bank account unless the whole balance is linked to a suspected offence. The Court clarified that only the amount alleged to be connected with the offence can be put under restriction, while the rest must remain operational.
Background of the Case
A group of writ petitions was filed by multiple account holders whose bank accounts were frozen following directions issued by police and cyber-crime units. The petitioners argued that their accounts were frozen without notice, without specifying any amount under suspicion, and without informing the jurisdictional magistrate. Several petitioners claimed that their entire livelihood, salaries, or pensions were blocked.
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The banks maintained that they acted on directions from investigating agencies. The Union and State authorities contended that freezing was permissible under the law to prevent dissipation of suspected proceeds of cyber fraud.
The Division Bench comprising Justice Ajit Kumar and Justice Swarupama Chaturvedi examined the scope of Section 106 Bharatiya Nagarik Suraksha Sanhita and Section 107 . The Court noted that while police have the power to seize property during investigation, the provision does not permit blanket freezing of entire bank accounts without specifying the suspicious amount.
The bench observed:
“The power of seizure is limited to the extent of the alleged or suspicious amount and cannot be construed to permit freezing of the entire operation of the bank account.”
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It further explained that Section 106 BNSS allows police to seize property suspected to be connected with an offence, but requires mandatory reporting to the magistrate. The Court emphasized that seizure under Section 106 is temporary and investigative, while attachment under Section 107 is a more serious measure requiring a judicial order.
The Court added that although prior notice to the account holder is not mandatory before freezing, banks must inform customers once the account is restricted, including reasons and operational status.
Jurisdiction Clarified
On the question of jurisdiction, the Court held that the magistrate having jurisdiction over the location where the account is frozen would be competent to hear challenges, irrespective of where the disputed transaction originated.
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The Court issued the following directions:
- Banks must within one week place lien only on the amount specified by the investigating agency and restore full operation of the remaining funds.
- Account holders may approach the jurisdictional magistrate if freezing violates Section 106 BNSS or if the freeze is unjustified.
- Police must clearly specify the amount alleged to be involved in the offence when instructing banks to restrict accounts.
- Banks must inform customers of freezing, the reasons, and the operational impact.
The Court allowed several petitions with these directions, declared some petitions infructuous where accounts were already restored, and disposed of the rest accordingly.
Case Details
Case Title: Ashish Rawat & Ors. vs Union of India & Ors.
Case Number: Writ-C No. 1489 of 2026 and connected matters
Judges: Justice Ajit Kumar & Justice Swarupama Chaturvedi
Decision Date: 08 April 2026
