Bank accounts should be defreezed where the disputed amount can be secured by lien.

The petitioner, who operated a paying-guest accommodation for girl students, maintained Savings Account No. 50100737561431 with HDFC Bank, Panbazar Branch, and used Google Pay linked to that account for transactions.

The account was blocked pursuant to directions issued by the Cyber Crime Police, Thrissur, Kerala, in connection with suspected cyber-fraud transactions.

The petitioner’s husband requested the Cyber Crime Police to lift the restriction, and the police subsequently furnished a statement indicating that ₹7,100 had been credited to the account, of which ₹7,000 was treated as the disputed amount.

The petitioner contended that the entire account could not be frozen without notice or determination of the alleged fraudulent amount and submitted a representation dated 20 April 2025 to the Superintendent of Police, Criminal Investigation Department, Kerala, but received no relief.

She therefore approached the Gauhati High Court seeking defreezing of the account.

The Bank submitted that the freezing was pursuant to police directions and that the full extent of the suspected fraudulent transactions had not yet been ascertained.

1. Whether the petitioner’s entire savings bank account could remain frozen in connection with a cyber-crime investigation when the suspected disputed amount had been identified, without permitting her to operate the undisputed balance.

2. Whether the interests of the cyber-crime investigation could be adequately protected by retaining the disputed amount under lien while allowing the petitioner to operate the bank account.

The Court applied the principle that investigative powers relating to freezing or attachment of bank accounts must be exercised proportionately and cannot ordinarily justify an indefinite blanket restraint over an entire account without quantifying the amount or period involved, particularly where such restraint affects the account holder’s fundamental rights and livelihood.

The Court relied on Mohammed Saifullah v. Reserve Bank of India & Ors. , where the Madras High Court held that freezing an entire account under the guise of investigation, without quantifying the amount or duration, may violate fundamental rights; Neelkanth Pharma Logistics Pvt. Ltd. v. Union of India & Anr. , where the Delhi High Court emphasised balancing the complainant’s interests against the hardship caused to an innocent account holder by blanket freezing; and Mr. Kartik Yogeswar Chatur v. Union of India & Ors. , concerning the application of Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to attachment or freezing of bank accounts.

The governing principle was that a balance must be maintained between effective investigation of cyber-fraud and protection of a bona fide account holder from disproportionate financial restraint.

The Court accepted that the account had been frozen in connection with complaints being investigated by the Cyber Crime Police, Thrissur, and recognised the seriousness of cyber-fraud investigations.

However, it also considered the petitioner’s claim that the account was being used for a lawful paying-guest business and that the freezing of the entire account was causing substantial hardship to her business and livelihood.

Since the police statement identified ₹7,100 as the relevant amount requiring protection, the Court held that the investigative interest could be preserved by placing that amount under lien rather than continuing a blanket freeze over the entire account.

This approach struck a proportionate balance between safeguarding the suspected fraudulent proceeds and allowing the petitioner, whose bona fides had not been finally determined adversely, to conduct ordinary banking operations.

It further directed the Bank to keep ₹7,100 under lien until further directions were issued by the Cyber Crime Police, Thrissur, Kerala.

No order as to costs was made.