The Jaipur Bench of the Rajasthan High Court has observed that freezing an entire bank account in cyber fraud cases merely because a disputed amount was deposited into it is unjustified. The court stated that investigating agencies and banks are empowered to freeze only the disputed amount, and restricting access to the remaining funds amounts to an infringement of constitutional and commercial rights.
Justice Vinod Kumar Bharwani made the observation while hearing a petition filed by Banwari Lal Jat, proprietor of Sarpanch Filling Station. The court directed the bank to defreeze the petitioner’s account within three days while retaining the disputed amount in the account. The petitioner was also directed to cooperate with investigating agencies whenever required.
Advocates Premchand Devanda and Abhishek Devanda argued that the petitioner operates a petrol pump and that his current account with Bank of Maharashtra had been frozen following cyber fraud complaints from Karnataka, West Bengal, and Gujarat. Around ₹7.5 lakh in the account was frozen, severely affecting daily business operations, including employee salaries and supplier payments.
The petitioner contended that he had not committed any fraud and that if any unlawful transaction had occurred through a third party’s UPI transaction, he could not be held responsible. He further argued that the disputed amount was limited, whereas the majority of the funds in the account were from legitimate business transactions. Therefore, freezing the entire account was arbitrary and excessive.
Representing the bank, advocate Himanshu Tholia submitted that approximately ₹53,000 in the account was linked to alleged cyber fraud complaints. He stated that under the National Cyber Crime framework, accounts are automatically frozen if more than three cyber fraud complaints are received. The petitioner, however, disputed only ₹18,000 of the alleged amount.
After hearing both sides, the court observed that freezing an entire bank account of an individual or business is an extremely harsh measure. It emphasized that if any amount needs to be secured for investigation purposes, only that specific amount should be frozen, and there is no justification for blocking operations of the entire account.
