Bank accounts must be unfrozen beyond the disputed amount, subject to investigation-related safeguards.

The petitioner maintained Current Account No. 913010026073482 with Axis Bank, Sakti Branch, Chhattisgarh.

Crime No. 593/2024 was registered in relation to offences under Section 420 of the Indian Penal Code and Section 66-D of the Information Technology Act. The allegation concerned an amount of ₹4,000 out of ₹37,000 deposited into the petitioner’s account, which was treated as an excess or disputed payment.

The complaint arose from a communication dated 12 September 2024 concerning a cyber/depository fraud complaint made by a person in Kerala. Although the petitioner was not directly named in the complaint, the bank account number was referred to in the relevant documents.

On the basis of a communication issued by the Kerala Police under Section 94 of the Bharatiya Nagarik Suraksha Sanhita, 2023, Axis Bank imposed a blanket debit freeze on the petitioner’s entire account.

The petitioner asserted that approximately ₹2 lakhs was lying in the account and sought permission to operate it, subject only to retention of the disputed ₹4,000.

1. Whether the petitioner’s entire bank account should remain frozen when the disputed amount identified in the investigation was only ₹4,000.

2. Whether the bank should be directed to unfreeze the account and permit its operation subject to retaining a hold over ₹4,000 during the investigation.

3. What conditions should govern the petitioner’s operation of the account pending completion of the investigation and submission of the final report.

The Court considered the offences alleged under Section 420 of the Indian Penal Code and Section 66-D of the Information Technology Act, as well as the communication issued under Section 94 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

The governing principle applied was that a bank-freezing measure should remain proportionate to the disputed or allegedly tainted amount; where the investigation concerns a specific and limited sum, continued freezing of the entire account may be avoided by retaining an equivalent hold or lien, subject to safeguards that preserve the investigation and the authority of the competent criminal court.

The Court noted that the communication dated 12 September 2024 identified the disputed amount as only ₹4,000, whereas the petitioner claimed that approximately ₹2 lakhs was otherwise available in the account.

In these circumstances, a blanket freeze of the entire account was considered disproportionate to the nature and monetary extent of the dispute.

The Court therefore balanced the petitioner’s need to access his funds against the interests of the ongoing investigation by directing that the account be unfrozen while preserving a hold over ₹4,000.

To prevent obstruction of the investigation or dissipation of funds, the relief was made conditional upon the petitioner’s cooperation, restrictions on major withdrawals, and furnishing updated contact details to the bank.

Axis Bank was directed to unfreeze the petitioner’s account and permit him to operate it, subject to retaining a hold over ₹4,000 until submission of the final report by the Kerala Police or further orders of the competent criminal court.

The petitioner was required to fully cooperate with the investigation, refrain from making major withdrawals without permission of the concerned court, and provide his current residential address and telephone number to the bank.