In a significant challenge to the sweeping use of investigative freeze powers, the Gujarat High Court stepped in to address a serious overreach by cyber crime authorities who had locked an innocent citizen out of his primary bank account, his sole means of accessing his salary, paying rent, and meeting daily expenses. The Court was confronted with a troubling question: can an entire bank account be rendered inaccessible to a person not named as an accused in any crime, merely because two small credits totalling Rs.1,100 passed through it? The answer, the bench suggested, lay in the bedrock constitutional guarantees of livelihood and dignity.
The controversy began when the applicant's HDFC Bank savings account at Infocity Branch, Gandhinagar, his primary account for salary credits, household expenses, rent, and EMIs, was debit-frozen pursuant to instructions issued by cyber crime authorities in connection with two complaints bearing Acknowledgment Nos. 31609250128406 and 32909250054174. The alleged suspicious activity? Two modest inward credits of Rs.500 and Rs.600, aggregating to Rs.1,100, which had surfaced somewhere in the transaction trail under investigation.
Counsel for the applicant argued that his client had no involvement whatsoever in any alleged cyber fraud, was neither named as an accused nor identified as a suspect, and had received no reasons or documentation from the authorities despite repeated representations. The State, for its part, defended the freeze as a legitimate step in an ongoing cyber crime investigation, while the bank straightforwardly submitted that it had merely acted on the investigating agency's instructions and left the matter to the Court's wisdom.
Justice Niral R. Mehta, hearing the petition, acknowledged that the investigating agency's power to direct account freezes during investigation is not in dispute, but swiftly turned to the manner of its exercise. The Court observed that "such power is required to be exercised in a reasonable, proportionate and lawful manner," and found that freezing an entire account without specifying the quantum of the suspected amount, or without establishing the account holder's involvement in any criminal activity, "results in undue hardship and adversely affects the fundamental rights of the citizen."
With the applicant unconnected to any criminal proceedings and the alleged suspicious amount pegged at a mere Rs.1,100, the Court held that immobilising the entirety of his salary and lawful deposits was disproportionate and "results in serious prejudice affecting his right to livelihood and dignity guaranteed under Article 21 of the Constitution of India."
Allowing the petition, the Court directed HDFC Bank to defreeze the account immediately, restrict the freeze to a lien of exactly Rs.1,100 tied to the two disputed transactions, and permit the applicant full operational access to the remainder of his funds pending the outcome of the investigation.
Case Title: Arjun Kuruveetil Peethambaran Vs. The Police Inspector & Ors.
Case No.: R/Special Civil Application No. 1961 of 2026
Coram: Hon’ble Justice Niral R. Mehta
Advocate for the Petitioner: Adv. Ronith Joy
Advocate for the Respondent: Adv. Rituraj Singh Chauhan, Adv. CR Abichandani
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