Gujarat High Court Orders Bank Account Unfreezing, Says ₹1,100 Dispute Cannot Justify Blocking Entire Account

The Gujarat High Court has ruled that freezing an individual's entire bank account over a disputed amount of just ₹1,100 is disproportionate and violates fundamental rights, directing a bank to restore full access to the account while retaining a lien only on the amount under investigation.

Justice Niral R. Mehta passed the order while hearing a petition filed by Arjun Kuruveetil Peethambaran, whose savings account with HDFC Bank had been debit-frozen following communications from cybercrime authorities during an ongoing investigation. The account was reportedly used for receiving salary, paying rent, EMIs, and meeting other daily financial obligations.

According to the investigation, two transactions worth ₹500 and ₹600 were traced through the petitioner’s account. However, the court noted that the petitioner was neither named as an accused nor identified as a suspect in any criminal case. Despite this, the entire account had been frozen, preventing him from accessing his legitimate earnings and savings.

The High Court observed that while investigating agencies possess the authority to freeze bank accounts during criminal inquiries, such powers must be exercised reasonably and proportionately. Blocking access to an entire account without establishing the account holder’s involvement in wrongdoing, the court said, causes undue hardship and interferes with the constitutional rights to livelihood and dignity protected under Article 21.

Allowing the petition, the court directed the bank to immediately defreeze the account and permit normal operations. It ordered that only ₹1,100 be kept under lien pending the outcome of the cybercrime investigation, while clarifying that the ruling does not affect the merits of the ongoing probe.