Gujarat HC Orders Partial Defreezing of Bank Account Frozen Over ₹1,100 Cyber Crime Transactions
Justice Niral R. Mehta held that freezing an entire salary account over two small credit entries of ₹500 and ₹600 was disproportionate and violated Article 21.
The High Court of Gujarat has directed HDFC Bank, Infocity Branch, Gandhinagar, to lift the debit freeze on a savings account that cyber crime authorities had caused to be frozen on account of two credit transactions totalling ₹1,100. Justice Niral R. Mehta, sitting singly, allowed the Special Civil Application on 4 May 2026, holding that a blanket freeze of an account used for salary, rent, EMIs and household expenses — when the suspected amount is only ₹1,100 and the account holder is not named as an accused — is disproportionate and infringes the right to livelihood and dignity guaranteed under Article 21 of the Constitution of India. The court directed that only a lien of ₹1,100 be marked on the account, leaving the rest freely operable.
The Account Freeze and the Petitioner's Position
Arjun Kuruveetil Peethambaran held a savings account bearing No. 50100252309114 with HDFC Bank's Infocity Branch in Gandhinagar. The account was his primary financial instrument, used for salary credits, household expenses, rent and EMI payments.
HDFC Bank debit-froze the account after receiving communications from cyber crime authorities. The freeze was linked to two cyber crime complaints identified by Acknowledgment Nos. 31609250128406 and 32909250054174. The transactions flagged as suspicious were a credit of ₹500 and a credit of ₹600 — together ₹1,100.
Counsel for the petitioner told the court that Peethambaran was neither named as an accused nor as a suspect in any proceedings arising from those complaints. Despite repeated representations to the authorities, no detailed reasons or documents were supplied to him. The entire account remained frozen, cutting him off from his lawful earnings.
The petitioner sought a direction to defreeze the account entirely, or at minimum to permit its operation while keeping only the disputed ₹1,100 on hold pending the investigation.
The State and Bank's Responses
Respondents 1 and 2 — the police authorities — were served but did not appear before the court.
The learned Additional Public Prosecutor appearing for the respondent State submitted that the account freeze had been undertaken in connection with a cyber crime investigation. The bank's counsel, appearing for respondent No. 3, stated that HDFC Bank had acted on instructions received from the investigating agency and left the question of appropriate relief to the court.
The Court's Reasoning on Proportionality and Article 21
Justice Mehta accepted that investigating agencies possess the power to direct the freezing of bank accounts during the course of an investigation. The judgment does not disturb that power. What the court examined was whether the power had been exercised in a reasonable, proportionate and lawful manner.
The court found that the transaction trail reflected the petitioner's account in connection with amounts of ₹500 and ₹600 only. Yet the entire account — containing salary credits and other lawful deposits — had been debit-frozen. The court observed that freezing an entire account without specifying the quantum of the suspected amount or without establishing the involvement of the account holder in any criminal activity results in undue hardship and adversely affects the fundamental rights of the citizen.
The court then applied Article 21 directly. Because the petitioner was not shown to be an accused in any criminal proceedings, and because the alleged suspicious amount was quantified at only ₹1,100, the blanket freeze of salary and lawful deposits was held to be disproportionate. The court held that such a freeze causes “serious prejudice affecting his right to livelihood and dignity” under Article 21.
The proportionality analysis was straightforward: the freeze should extend no further than the amount actually under suspicion. Restricting access to funds well beyond the disputed sum, without any finding of the account holder's involvement, could not be justified by the investigative interest at stake.
Directions Issued
The court allowed the petition and issued the following directions:
HDFC Bank, Infocity Branch, Gandhinagar, was directed to defreeze account No. 50100252309114. The bank was simultaneously directed to mark a lien of ₹1,100 (comprising ₹500 and ₹600) on the account. That lien is to remain in place subject to the outcome of the investigation in connection with Acknowledgment Nos. 31609250128406 and 32909250054174. The petitioner is permitted to operate the account fully except to the extent of the lien amount.
The petitioner was directed to cooperate with the investigating agency as and when required.
The court clarified that the order does not constitute any expression on the merits of the investigation.
Order
The Special Civil Application was disposed of on 4 May 2026. No order as to costs was made. The debit freeze on the account stands lifted, with a lien of ₹1,100 continuing until the investigation in the two cyber crime complaints is concluded.