Bank accounts cannot remain frozen for disputed amounts without statutory compliance under Section 102 CrPC.

The petitioner, a student, holds a bank account with HDFC Bank (Respondent No. 1) used for scholarships and personal savings.

The bank placed a "debit freeze" on the account following a complaint from the Cyber Crime Cell, Bangalore, involving a disputed amount of Rs. 2,999.83.

The petitioner alleged that the freeze was implemented without prior notice, without an FIR, and without an opportunity for a hearing.

The petitioner further contended that the investigating agencies failed to comply with Section 102 of the Cr.P.C. by not informing the concerned Magistrate of the seizure.

1. Whether the unilateral freezing of the petitioner's entire bank account by the Respondent Bank based on a cyber crime complaint was legally sustainable without following statutory procedures.

2. Whether the disputed amount could be secured while allowing the petitioner to operate the remainder of the account to prevent undue hardship.

Section 102 of the Code of Criminal Procedure (Cr.P.C.) (now corresponding to Section 106 of the BNSS), which empowers police officers to seize property suspected to be stolen or linked to an offense, provided the seizure is reported to the Magistrate.

Principle of Natural Justice, specifically the right to be heard before adverse administrative actions, and judicial discretion in balancing investigative requirements with the fundamental rights of the account holder under Article 226 of the Constitution of India.

The court examined the disproportionate nature of freezing the entire account for a relatively small disputed amount of Rs. 2,999.83.

It referenced an earlier interim order (WP No. 1100/2024) where limited withdrawals were permitted in similar circumstances to balance interest.

The court reasoned that the investigating agencies must proceed strictly in accordance with Section 102 of the Cr.P.C., which includes notifying the Magistrate. By directing the disputed sum to be isolated into a fixed deposit, the court harmonized the petitioner’s right to access his lawful funds for education with the state's interest in securing potential proceeds of crime.

The petitioner was permitted to operate the remainder of the account. The holding specifies that the fixed deposit can only be liquidated upon orders from a competent Judicial Magistrate, who is requested to decide the matter within one week. If the cyber crime agencies fail to strictly comply with Section 102 of the Cr.P.C., the petitioner may be allowed to withdraw the FD amount under intimation to the said agencies.