Freeze the money, not the account: Himachal High Court

Freeze the money, not the account: Himachal High Court

Shimla, Nov 3,

Holding that blanket freezing of bank accounts in cybercrime investigations can seriously infringe an individual’s right to livelihood, the Himachal Pradesh High Court has directed the State Bank of India (SBI) to remove the complete debit freeze imposed on a government employee’s salary account while retaining a lien only on the disputed amount of Rs 21,000.

Justice Sandeep Sharma passed the order on October 30 while disposing of a petition filed by Shiv Singh, a Patwari in Shimla district, whose salary account had been frozen following communications from cybercrime authorities in Maharashtra.

The petitioner had downloaded an online gaming application, ‘Yono Games’, and received Rs 21,000 in his SBI salary account on July 9, 2026, as winnings from the application. Subsequently, the account was subjected to a complete debit freeze after being linked to two cybercrime complaints, one originating from Thane in Maharashtra and another from Malkajgiri in Telangana.

The freezing of the entire account, despite the disputed transaction involving Rs 21,000, left the petitioner unable to access his salary and savings. He told the Court that the freeze had affected his ability to meet household expenses, pay rent, children’s school fees and bank EMIs.

Taking note of the circumstances, the Court observed that while investigating agencies are competent to issue directions to banks for freezing accounts, they are expected to exercise “requisite care, caution and act with compassion.”

Significantly, the Court observed that the petitioner was neither alleged to be a suspect nor an accused in the cybercrime under investigation. It noted that he could possibly be an unintended beneficiary of a transaction and might not even be connected with the offence.

“Since passing of the order of freezing the bank account of an individual has serious implications and invades and encroaches upon his invaluable earning and to live with dignity, investigating agency is expected to at least issue Show Cause Notice to such a person, before passing blanket order of freezing his bank account,” Justice Sharma observed.

The Court further emphasised that where the disputed amount is identifiable, investigating agencies should explore the possibility of placing a lien on that particular sum rather than freezing the entire account.

“If investigating agency is permitted to issue blanket orders with regard to freezing of accounts, that too, without assigning any reasons, it can play havoc with the financial concerns of such account holders,” the judgment stated.

Referring to the fundamental rights guaranteed under the Constitution, the Court held that a complete debit freeze on the petitioner’s salary account violated his rights under Articles 14, 19(1)(g) and 21, particularly when no prior notice or opportunity of hearing had been provided.

The Court also observed that salary constitutes an essential component of the right to livelihood and that depriving a government employee of his monthly income for months without due process could not be sustained.

Relying on similar observations made by the Delhi High Court in Pawan Kumar Rai v. Union of India and the Kerala High Court in Dr. Sajir v. Reserve Bank of India, the Himachal Pradesh High Court underscored the need to balance cybercrime investigations with the protection of innocent account holders.

Also read: CBI warns of Rising Fake ‘WhatsApp–CBI’ scams; Himachal Cyber police Issues Alert

Allowing relief to the petitioner, the Court directed SBI to remove the complete debit freeze from his account, while keeping intact the lien on the disputed amount forming part of the ongoing investigation. The bank’s counsel was also directed to communicate the order to the concerned branch for immediate compliance.

The judgment brings into focus the hardship caused by blanket bank account freezes in cybercrime investigations, particularly when legitimate salary credits and personal savings are blocked along with the disputed transaction.

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