Captain Rakesh Walia(Retd.) And Anr. vs Union Of India And Ors.

$~88
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 19715/2025 and CM APPL. 82336/2025

Date of Decision: 17.02.2026
CAPTAIN RAKESH WALIA(RETD.) AND ANR .
.....Petitioners
(Through: Mr. Devadipta Das, Mr. Chaitanya Poonia, Advocates.)

versus

UNION OF INDIA AND ORS. .....Respondents

(Through: Ms Arunima Dwivedi CGSC, Ms Himanshi Singh, Ms
Monalisha Pradhan, Ms Priya Khurana Advocates for R-1.
Mr Amol Sharma and Mr Ateev Mathur Advocates for R-3.)


CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
J U D G E M E N T

PURUSHAINDRA KUMAR KAURAV, J. (ORAL)


The instant writ petition has been filed assailing the imposition of lien
dated 19.07.2025 and subsequent complete freezing dated 08.12.2025 of
ICICI Bank Account No. 00290150349 ( subject account ) maintained by the
petitioners with respondent No.3-ICICI Bank Ltd.
1. It is the case of the petitioners that the said freezing has been,
allegedly, imposed at the instance of respondent No.2-Maharashtra Police,
without disclosure of grounds, without issuance of any written order, and
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Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

without affording any opportunity of hearing, in violation of Articles 14, 19
and 21 of the Constitution of India.
2. It is stated that the Petitioners are senior citizens. Petitioner No.1 is a
65-year-old retired Army officer and petitioner No.2, his wife, aged 61
years, is critically ill and completely bedridden and dependent on continuous
oxygen support.
3. The facts manifest that on 11.07.2025, a sum of ₹24,78,950/- (Rupees
Twenty Four Lakh Seventy-Eight Thousand Nine Hundred and Fifty only)
was credited into the subject account through RTGS from M/s Aramco
Diamond & Gold, Karol Bagh, New Delhi, towards sale of personal
jewellery. Thereafter, on 19.07.2025, the petitioners received an SMS from
Respondent No.3 stating that a lien of ₹2,02,345/- (Rupees Two Lakh Two
Thousand Three Hundred and Forty Five only) ( Serial no. 16 of the
complaint received by r-2 ) had been marked on the account pursuant to
alleged directions from respondent No.2.
4. It is the case of the petitioners that no written communication,
complaint details, FIR particulars or statutory order were furnished.
Thereafter, on 08.12.2025, the petitioners were further informed that the
account had been completely frozen for “Regulatory/Other reasons,” thereby
converting the earlier lien into a total debit freeze.
5. Per contra , Respondent No.3, ICICI Bank Ltd., submits that it
marked a lien of ₹2,02,345/- on the Petitioner’s account on 19.07.2025
pursuant to a complaint received through the National Cyber Crime
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

Reporting Portal from Maharashtra Thane City Police regarding an alleged
fraudulent RTGS transaction. The Bank states that it conducted due
diligence, found the account inactive with a balance of ₹34,119/- as on
30.01.2026. After making an attempt through physical and telephonic
verification, they imposed a complete debit freeze on 08.12.2025 with SMS
intimation to the petitioners.
6. Thereafter, it is the stand of the bank that the petitioners duly visited
the bank and have complied with the Know Your Customer.
7. Heard learned counsel for the parties and have perused the record.
8. The issue is squarely covered by the decision of this Court in Malabar
1
Gold and Diamond Limited & Ors. v. Union of India & Ors., wherein the
Court clarified that freezing or attachment, being measures to secure alleged
proceeds of crime, can be undertaken only under the provisions of Section
107 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) and strictly
pursuant to an order of the competent Magistrate after following statutory
safeguards. An investigating agency has no independent power to direct a
debit freeze under Section 106.
9. In the present case, no order under Section 107 of BNSS has been
produced, nor is any Magistrate’s approval shown. The petitioners were not
furnished with complaint details, FIR particulars, or any written direction
forming the basis of the action. Though a lien of ₹2,02,345/- was initially
marked, the subsequent blanket debit freeze of the entire account is
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

unsupported by any sanction and thus falls outside the statutory framework
governing the freezing of accounts.
10. In Malabar Gold , it was also emphasized that freezing must be
proportionate and based on material indicating the account holder’s
complicity in the alleged cyber fraud. It was also reiterated that innocent
account holders cannot be penalised merely because disputed funds have
passed through their accounts. The relevant extract of the aforenoted
decision reads as under:-
“13.While interpreting the scheme of aforenoted sections of the BNSS,
High Court of Kerala at Ernakulam, in Headstar Global Pvt. Ltd. V.
State of Kerela1 , has held, inter alia, that freezing of bank accounts
must be proportionate, reasoned, and supported by material indicating
the account holder‟s involvement in the alleged offence. The relevant
extract of the aforenoted decision reads as under:-

“12. Going by Section 107 of BNSS, a police officer
investigating a crime has to approach the jurisdictional
Magistrate seeking attachment of any property believed to
be derived directly or indirectly from criminal activity or
the commission of an offence. The Magistrate may
thereupon order attachment after hearing all parties
concerned or issue an interim order for attachment, if
issuing notice to the owner will defeat the purpose of
attachment and seizure. After confirming that the attached
property is the proceeds of crime, the Magistrate can
direct the District Magistrate to distribute the property
among those affected by the crime. Thus Section 107
confers the jurisdictional Magistrates with explicit
authority to act swiftly in cases involving proceeds of
crime.
13. Another aspect of importance is that, while Section
106 speaks of seizure, Section 107 deals with attachment,
forfeiture and restoration. Seizure under Section 106 can
be carried out by a police officer and an ex post facto
report submitted to the Magistrate. On the other hand,

1
W.P.(C) 4198/2025 dt. 16.01.2025
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

attachment under Section 107 can be effected only upon
the orders of the Magistrate. The logic behind this
distinction being that the purpose of seizure is more to
secure the evidence during an investigation, whereas
attachment is intended to secure the proceeds of crime by
preventing its disposal and thus ensuring its availability
for legal procedure such as forfeiture and distribution to
the victim/s.
14. In the case at hand, the reason for directing the bank
to debit 1 2025 SCC OnLine Ker 3546 This is a digitally
signed order. The authenticity of the order can be re-
verified from Delhi High Court Order Portal by scanning
the QR code shown above. The Order is downloaded from
the DHC Server on 26/01/2026 at 12:33:41 freeze the
petitioner's account, as stated in Annexure B notice is the
transfer of some amount from the account of the accused
to the account of the company Headstar Trading LLP and
from there to the petitioner's account. Even accepting that
the Directors of the above mentioned three entities are
known to each other or are related to each other, it may,
at best, indicate that the money in the petitioner's account
is proceeds of the crime committed by the accused. If so,
the amount can be attached or the account frozen only by
following the procedure prescribed in Section 107 of
BNSS.”

14. The aforenoted judgment was challenged before the Supreme Court
in SLP being SLP (Cri.) No. 13433/2025, where the Supreme Court
declined to exercise the jurisdiction under Article 136 of the
Constitution.

15. In Kartik Yogeshwar Chatur v. Union of India2 , the Bombay High
Court, while relying on the decision of the High Court of Kerala at
Ernakulam in Headstar Global, held that an Investigating Agency has
no power to debit freeze or attach a bank account under Section 106 of
the BNSS, and that any such action can be taken only in accordance
with Section 107 of the BNSS upon orders of the competent Magistrate.
The relevant extract of the aforementioned decision reads as under: -

“13. That being so, the law stands well settled that under
Section 106 of the BNSS, an Investigating Agency has no
power to attach or debit freeze an account.

14. In that view of the matter, the orders, which are passed
by the Investigating Agency in respective petitions under
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

Section 106 of the BNSS are liable to be quashed and set
aside.
15. We may note here that there is, in place system to deal
with the financial fraud, which is titled as „Citizen
Financial Cyber Frauds Reporting and Management
System‟. This system has been published by the Indian
Cybercrime Coordination Centre, which comes under the
Ministry of Home Affairs, Government of India. Our
attention is invited to FAQs, particularly, FAQ No. 21. The
said question and answer would throw further light as to
how Banks should deal with reports/communications
received from an Investigating Agency. FAQ No. 21 and its
answer reads as under:
“21. Whether the Bank can block/withhold the funds on the
basis of the complaint's acknowledgement number that gets
reported on the helpline number or NCRP ? Yes,
Bank/intermediaries can put the disputed amount on lien on
the basis of the complaint's acknowledgement number so
that amount can be refunded later, after investigation of the
complaint by concerned State/Uts LEAs.”

16. As could be seen, Bank/intermediaries can put the
disputed amount on lien, but cannot debit freeze the
account.

17. Despite such status, some Banks upon receiving certain
communications from Investigating Agency, which does not
even call for debit freezing accounts, are proceeding to
debit freeze the accounts of the account holders resulting
into losses to their day-today affairs.

18. Put all together, it is abundantly clear that an
Investigating Agency has no power of attachment/debit
freezing a Bank Account under Section 106 of the BNSS.

19. The Investigating Agency may, however, proceed in
terms of Section 107 of the BNSS to debit freeze or attach a
Bank Account.”

16. Recently, this Court in Neelkanth Pharma Logistics (P) Ltd. v.
Union of India, 3 observed that freezing of an entire bank account
merely on account of a small and identifiable amount alleged to be
proceeds of cyber fraud having been credited therein, is a
disproportionate and arbitrary exercise of power, particularly when the
account holder is neither an accused nor even a suspect in the offence
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

under investigation. The Court emphasised that such blanket freezing,
without recording or communicating any reasons, results in grave civil
and financial consequences, including disruption of business
operations, dishonour of cheques and severe hardship, and directly
impinges upon the right to livelihood.

17. The Court further observed that innocent and unwary account
holders cannot be made to suffer merely because proceeds of crime
may have temporarily passed through their accounts, unless
investigation reveals their complicity or conscious receipt of such
funds. More importantly, taking note of the recurring nature of such
cases across various High Courts, the Court urged the Ministry of
Home Affairs, Government of India, to frame uniform policies,
standard operating procedures and guidelines, in consultation with all
stakeholders, to strike a balance between effective investigation of
cybercrime and protection of the rights and livelihoods of innocent
account holders.

18. Thus, it is fairly trite now that Section 106 of the BNSS empowers
the police only to seize property for evidentiary purposes and does not
confer any authority to attach or debit-freeze bank accounts.
Attachment or freezing of bank accounts, being measures directed at
securing alleged proceeds of crime, can be undertaken only under
Section 107 of the BNSS and strictly upon orders of a competent
Magistrate, after following the prescribed procedural safeguards.

19. In light of these provisions, it is also pertinent to note that any
blanket or disproportionate freezing of bank accounts, particularly
where the account holder is neither an accused nor even a suspect in
the offence under investigation, is manifestly arbitrary, and in the teeth
of the fundamental rights under Article 19(1)(g) and 21 and of the
Constitution of India, which encompass the right to livelihood and
freedom to carry on trade and business. Such indiscriminate debit
freezing, without any finding of complicity, has the inevitable effect of
paralysing the day-to-day business operations of an otherwise innocent
entity, resulting in loss of commercial goodwill and financial
consequences, thereby subjecting a non-complicit account holder to
punitive consequences.”

11. In the present case, the petitioners are neither accused nor shown to be
suspects, and only a limited sum is alleged to be disputed. Freezing the
entire account is therefore manifestly disproportionate.
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By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09

12. Accordingly, the continued blanket freeze, in the absence of
compliance with Section 107 of Bhartiya Nagarik Suraksha Sanhita, 2023
(BNSS), is unsustainable in law. The petition is disposed of with the
following directions:-
i) Respondent no. 3 to defreeze the account of the petitioners
ii) If any enforcement or investigating agency proposes to initiate
or is conducting an investigation against the petitioners, it shall be at
liberty to do so in accordance with the provisions of the BNSS, and the
petitioners undertake to fully cooperate with such investigation.
iii) In the event of finding a positive and specific material
indicating the petitioners’ complicity, respondent no.2 shall be at
liberty to pass fresh direction in accordance with law.


PURUSHAINDRA KUMAR KAURAV
(JUDGE)
FEBRUARY 17, 2026
Nc/amg
Signature Not Verified
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Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:26.02.2026
11:43:09