Banks must limit account freezes to the amount linked to suspected transactions, absent lawful complete-freeze authority.

The petitioner maintained Current Account No. 39134083704 with the State Bank of India, Dhupdhara Branch. Since November 2025, the account was placed under a complete debit freeze.

The Bank informed the petitioner that the freeze was based on a suspicious credit transaction of ₹1,500 linked to Cyber Complaint No. 22906250047544 reported by the Cyber Cell, Tamil Nadu Police.

The petitioner requested that the account be unfrozen at least partially, with a lien limited to ₹1,500, so that he could operate the account during the investigation. No action was taken on his representation.

The Bank submitted that the freeze had been imposed pursuant to instructions from the Tamil Nadu Cyber Cell and that further suspicious transactions might subsequently be reported; it also referred to possible non-compliance with KYC requirements.

Whether the Bank could maintain a complete debit freeze over the petitioner’s account when the investigating authority had identified only a specific suspicious transaction of ₹1,500.

Whether the Bank was required to restrict the freeze by placing a lien only over the amount allegedly connected with the suspicious transaction and permit operation of the account concerning the remaining balance.

Whether the petitioner’s account could remain subject to lawful KYC requirements and any subsequent directions issued by a competent authority.

The Court relied on State of Maharashtra v. Tapas D. Neogy, [1999] 7 SCC 685, which recognised a bank account as “property” under Section 102 of the Code of Criminal Procedure, 1973, capable of being seized or frozen where it has a direct link with the offence under investigation.

It also relied on M.T. Enrica Lexie v. Doramma, [2012] 6 SCC 760, holding that seizure under Section 102 is confined to property alleged or suspected to be stolen, constituting the object of the crime, or having a direct link with the offence; property not connected with the investigated offence cannot be seized.

Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023, was noted to contain a corresponding provision.

Accordingly, where the investigating authority specifies a particular amount, the Bank must ordinarily place a lien over that amount and permit operation of the account concerning the remaining balance, unless the direction expressly requires complete freezing or a statutory mandate provides otherwise.

The Court held that the Bank’s power to freeze the account was not independent but was limited to implementing the investigating authority’s lawful direction while also acting as custodian of the customer’s account.

Since the only reported suspicious transaction concerned ₹1,500, the Bank’s apprehension that further complaints might arise could not justify withholding the entire account balance.

A complete freeze substantially affects the account holder’s ability to earn a livelihood and conduct business, implicating the constitutional right to life; therefore, freezing amounts unrelated to the identified suspicious transaction was disproportionate.

As the petitioner had not been shown to be arraigned as an accused and no direction for complete freezing was demonstrated, the Bank was required to limit the restriction to the amount connected with the investigation, subject to KYC compliance and any subsequent lawful direction.

The Bank was directed to maintain a lien over ₹1,500 and permit the petitioner to operate the account with respect to the remaining balance, subject to submission of the KYC form and any further lawful instruction by a competent authority.

The operative portion also states that the freeze was to be restricted “only to the extent of ₹11,500,” despite the judgment consistently identifying the suspicious amount as ₹1,500; this appears to be a numerical inconsistency in the text of the order.

No costs were awarded.