[Cites 2, Cited by 0]
Karnataka High Court
R Jyothi vs State Of Karnataka on 26 March, 2026
-1-
NC: 2026:KHC:17409
WP No. 4264 of 2026
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF MARCH, 2026
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO. 4264 OF 2026 (GM-RES)
BETWEEN:
R JYOTHI
W/O R LOKANANDHA NAIDU
AGED ABOUT 44 YEARS,
RESIDING AT 5TH CROSS,
MAIN ROAD, JAYANTHI NAGAR,
HORAMAVU, BENGALURU EAST,
KARNATAKA-560 043.
...PETITIONER
(BY SRI. SHREE HARI S., ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED HEREIN BY
Digitally THE STATE PUBLIC PROSECUTOR,
signed by BENGALURU, KARNATAKA-560001.
CHAITHRA A
Location: 2. THE STATION HOUSE OFFICER
HIGH NORTH REGION CYBER POLICE STATION,
COURT OF REPRESENTED BY
KARNATAKA
INVESTIGATING OFFICER/ INSPECTOR,
5VX6+WJH, KAANDIVALI,
SHIV SAGAR, KANDIVALI EAST,
MUMBAI-400 101.
3. AXIS BANK
REPRESENTED BY,
THE BRANCH MANAGER,
KALKERE BRANCH,
NO. 9, UPPER FLOOR,
-2-
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WP No. 4264 of 2026
HC-KAR
RAMAMURTHY NAGAR,
RICHES GARDEN MAIN ROAD,
KALKERE, BENGALURU 560 016
...RESPONDENTS
(BY SRI. ADITYA DIWAKARA, AGA FOR R1;
SRI. FRANCIS XAVIER, ADVOCATE FOR R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DIRECTING THE RESPONDENT TO DEFREEZE THE ACCOUNT OF
THE PETITIONER AND PERMIT THE PETITIONER HEREIN TO
USE AND OPERATE HAVING THE BANK SAVINGS
NO.923010054563776 A/C IFSCCODE UTIB0004822,
MAINTAINED IN AXIS BANK AND ETC.
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
ORAL ORDER
The captioned petition is filed seeking direction
against respondent No.3/Bank to defreeze the account of
petitioner and permit petitioner to operate the bank
account bearing A/c No.923010054563776, maintained
with respondent No.3/Bank.
2. The petitioner asserts that she is engaged in a
lawful and legitimate financial transactions involving
purchase and sale of cryptocurrency (USDT) through a
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recognized digital trading platform, namely Binance,
strictly in accordance with applicable platform norms and
regulations. The grievance of the petitioner emanates from
a communication issued by respondent No.2--
Investigating Officer, directing respondent No.3/Bank to
freeze the petitioner's bank account. It is contended that
acting solely on the basis of such communication, the
Bank has proceeded to freeze the entire account of the
petitioner, thereby bringing her business operations to a
standstill.
3. Heard the learned counsel appearing for the
parties. Perused the material on record with care and
circumspection.
4. A perusal of the records would indicate that
respondent No.2 has lodged a complaint with respondent
No.3/Bank seeking to secure the alleged proceeds of crime
by directing the Bank to mark a lien over the petitioner's
account to the extent of Rs.10,000/-. However, it is
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evident that the Bank, instead of confining its action to the
said quantified amount, has proceeded to freeze the entire
account of the petitioner. Such action, in the considered
opinion of this Court, travels beyond the scope of the
communication issued by the Investigating Officer.
5. It is trite that while the Investigating Agency is
vested with the authority to take necessary measures to
secure suspected proceeds of crime and to ensure
availability of funds during the course of investigation,
such power is not unbridled. The exercise of such power
must be proportionate and tailored to the exigencies of the
case. Freezing of an entire bank account, particularly when
the alleged amount involved is specifically quantified,
would amount to an excessive and unreasonable
restriction, impinging upon the petitioner's fundamental
right to carry on trade and business. The action of
respondent No.3/Bank, therefore, cannot be sustained to
the extent it results in a complete embargo on the
operation of the account.
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6. In the case on hand, the amount indicated by
respondent No.2 as being subject to investigation is
Rs.10,000/-. Therefore, the ends of justice would be
adequately met if the lien is restricted to the said amount.
At the same time, balancing the interest of the
investigation with the petitioner's right to carry on
business, it would be appropriate to direct that the
petitioner shall maintain a minimum balance equivalent to
the said amount in the account, pending completion of
investigation or until further orders are passed by the
competent authority.
7. In view of the foregoing discussion, this Court
proceeds to pass the following:
ORDER
(i) The writ petition is allowed in part;
(ii) The action of respondent No.3/Bank in
freezing the entire bank account of the petitioner
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is held to be arbitrary and disproportionate, and
is accordingly modified;
(iii) Respondent No.3/Bank is directed to
mark a lien on the petitioner's account bearing
No.923010054563776 to the extent of
Rs.10,000/- (Rupees Ten thousand only), which
shall remain in force subject to further orders;
(iv) The petitioner is permitted to operate
the bank account for all transactions, subject to
maintaining a minimum balance of Rs.10,000/-
therein during the pendency of the investigation
or until further orders by the competent
authority.
Sd/-
(SACHIN SHANKAR MAGADUM)
JUDGE
CA
List No.: 1 Sl No.: 56
