A bank account may be defrozen while the disputed amount remains under lien.

Facts

The petitioner held a savings account with the State Bank of India’s Tikrikilla Branch. The Bank froze the account after receiving a complaint from Ahmedabad City Karaj Police Station concerning an alleged fraudulent UPI transaction of ₹10,000; the disputed amount had been placed on hold.

Source reference: pp. 2–3, paras. 2–3

The petitioner sought permission to operate the account, but it remained frozen, prompting this writ petition.

Source reference: p. 3, para. 3

The petitioner argued that the entire-account freeze was disproportionate, while the Bank maintained that it had acted on the police direction and that the full scale of the alleged fraud was not yet known.

Source reference: pp. 3–6, paras. 4, 9

Issues

Whether the petitioner should be permitted to operate the savings account despite the police complaint concerning an alleged fraudulent transaction.

Source reference: p. 6, paras. 10–12

Whether the disputed amount could remain secured by a lien while the petitioner was allowed to operate the account.

Source reference: pp. 6–7, paras. 12–14

Law Applied

The Court applied the principle that, in cases involving an account freeze connected to cyber-fraud investigations, a balance must be struck between the interests of the investigation and those of a bona fide account holder.

Source reference: p. 6, para. 12

It considered the petitioner’s reliance on *Mohammed Saifullah v. Reserve Bank of India & Ors.* (Madras High Court), *Neelkanth Pharma Logistics Pvt. Ltd. v. Union of India & Anr.* (Delhi High Court), and *Mr. Kartik Yogeswar Chatur v. Union of India & Ors.* (Bombay High Court), concerning blanket account freezes, account-holder hardship, and freezing under Section 106 of the BNSS.

Source reference: pp. 4–5, paras. 5–8

The judgment does not identify a statutory provision as the basis for its operative directions.

Source reference: no citation

Reasoning

The account had been frozen following a police complaint, and the Bank submitted that the investigation might reveal transactions beyond the ₹10,000 then identified.

Source reference: p. 6, paras. 9–10

The Court considered that leaving the entire account frozen would burden the account holder, while releasing the disputed amount could affect the investigation. It therefore balanced those interests by permitting operation of the account while retaining a lien over ₹10,000.

Source reference: pp. 6–7, paras. 12–13

Holding

The Court disposed of the writ petition and directed the Bank to defreeze the petitioner’s savings account forthwith, while maintaining a lien over ₹10,000 until further directions were issued by Respondent No. 1.

There was no order as to costs.

Source reference: p. 7, para. 14