After 7-Month Freeze, Madras HC Orders Banks to Let Event Firm Use Account Balances While Retaining Liens of ₹48,581 and ₹17,979

The petitioner, a proprietor operating as “Event 360,” maintained current accounts with Utkarsh Small Finance Bank and AU Small Finance Bank.

The accounts were debit-frozen on 23 April 2026 and 12 March 2026, respectively, in connection with disputed amounts of ₹48,581 and ₹17,979. The petitioner sought directions to restore account operation. Despite service of notice, neither bank appeared.

The Court recorded that the freezes had continued beyond the 90-day period contemplated by the National Cyber Crime Reporting Portal’s SOP, without further intimation of orders from the law-enforcement agencies.

The Court relied on the National Cyber Crime Reporting Portal’s SOP, which provides for a debit-freeze order to remain in force for 90 days and permits a bank to defreeze the account after that period if no further order has been issued by the law-enforcement agency or a court.

It also applied the principle that, where the disputed amount is less than the account balance, the bank should retain a lien only for the amount in dispute and permit operation of the account for the balance.

The Court found that the freezes had remained in place beyond the SOP’s 90-day period and that no further order or intimation had been communicated. It therefore held that continuing the freezes was not legally justified.

Since the amounts in dispute were ₹48,581 and ₹17,979, the banks were directed to retain liens only for those sums and allow the petitioner to operate the accounts as to the remaining balances.

The banks were also directed to contact the authorities that imposed the freezes and wait two weeks; if no fresh intimation concerning further orders was received within that period, they were to allow operation of the accounts without any lien.