Introduction
The Gujarat High Court has held that freezing an entire bank account merely because it reflects a small suspicious transaction during a cybercrime investigation is disproportionate and can adversely affect a citizen’s fundamental rights. The Court directed the de-freezing of a man’s bank account after finding that only ₹1,100 was under suspicion and there was no material showing his involvement in any criminal activity.
Legal Issue
The issue before the Court was whether investigating agencies could freeze an individual’s entire bank account when the alleged suspicious transactions amounted to only ₹1,100 and the account holder was neither an accused nor a suspect in any criminal case.
Background
The petitioner approached the High Court seeking de-freezing of his bank account, which had been frozen following communications received by the bank from cybercrime authorities. The action was linked to a cybercrime complaint in which two transactions of ₹500 and ₹600, totaling ₹1,100, appeared in the transaction trail.
The petitioner argued that he had no connection with any cybercrime investigation and was not named as an accused. He further submitted that the account was his primary bank account used for receiving salary, paying rent, household expenses, EMIs, and other day-to-day financial commitments.
According to the petitioner, despite repeated representations, authorities neither provided detailed reasons for the freeze nor supplied relevant documents. As a result, he was denied access to his lawful earnings and savings because of two small transactions under investigation.
Court’s Decision
Justice Niral R. Mehta observed that while investigating agencies undoubtedly possess the power to freeze bank accounts during criminal investigations, such powers must be exercised reasonably, proportionately, and in accordance with law.
The Court noted that the suspicious transactions identified in the present case were limited to ₹500 and ₹600, aggregating to ₹1,100. Despite this, the entire bank account had been frozen, preventing the petitioner from accessing his legitimate funds.
The Court found that the petitioner was not shown to be an accused in any criminal proceeding and there was no material indicating his involvement in any criminal activity. In such circumstances, freezing the entire account, including salary deposits and lawful earnings, was held to be excessive and disproportionate.
The Court emphasized that such action adversely affects a person’s right to livelihood and dignity protected under Article 21 of the Constitution. It held that restricting access to all funds for a disputed amount of only ₹1,100 causes undue hardship and cannot be justified without proper legal basis.
Conclusion
Allowing the petition, the Gujarat High Court directed the bank to de-freeze the account and permit the petitioner to operate it freely. However, the Court ordered the bank to retain a lien of ₹1,100, representing the disputed amount under investigation, until the investigation is concluded.
The judgment reinforces that while cybercrime investigations may require freezing of suspected funds, authorities must adopt proportionate measures and cannot unnecessarily restrict access to a citizen’s legitimate earnings and savings without evidence of criminal involvement.
Case Name
Arjun Kuruveetil Peethambaran v. The Police Inspector and Ors.
