From a retired government pensioner in Ballia to a schoolteacher in Jaunpur, ordinary Indians have found their bank accounts frozen without notice, without explanation, and without recourse , until the courts finally said enough.
Last evening, a young law intern, Harshit, spirited and social-media savvy, lamented before me that his Facebook account, newly monetized and credited with modest international remittances, had been abruptly frozen, leaving him in distress amidst his independent student life in Lucknow. In another instance, a jeweller friend, proud custodian of a boutique, was cruelly deceived by a cyber-criminal who, armed with a stolen card and counterfeit credentials, procured jewels worth lakhs. The aftermath was harsher still: the jeweller’s business account, holding vital working capital, was summarily frozen by the bank, without notice.
Such tales are not solitary. Even paltry transfers have led to wholesale freezing of accounts, ensnaring ordinary citizens, professionals, and even lawyers who transact online for fees. In this climate of sudden seizures and hostile police actions, the recent pronouncement of the Hon’ble Allahabad High Court delivered on April 8, 2026, by a Division Bench of the Allahabad High Court, comprising Hon’ble Justice Ajit Kumar and Hon’ble Justice Swarupama Chaturvedi, in the batch matter of Ashish Rawat v. Union of India confronts this crisis head-on.
The judgment is meticulous, principled, and overdue. It deserves to be read and understood by every bank manager, every Investigating Officer, and every citizen who lives in fear of a frozen account. It is with this judgment, read, reflected upon, and now shared with added insights, that we seek to illuminate the path forward for in our profession, knowledge shared is knowledge multiplied.
The Double Jeopardy of the Digital Age
India’s digital payment revolution has been nothing short of spectacular. Hundreds of millions of citizens now live, transact, and earn through the medium of online banking. But with this revolution has come a shadow, an epidemic of cybercrime that has, in turn, spawned a second epidemic: the arbitrary, indiscriminate, and often indefinite freezing of bank accounts of innocent citizens by police authorities acting on nothing more than a transactional trace.
The victim of cybercrime loses money. That is a tragedy. But the person whose account receives a tainted credit, without knowledge, without consent, often in amounts as trivial as one rupee, loses something equally precious: access to their own savings, their salary, their pension, their livelihood. They are punished twice, and punished without trial.
The Human Face of This Crisis
Before engaging with the law, the judgment takes care to record the human reality before it. Among the petitioners: a retired government employee whose pension and agricultural income were locked across five bank accounts totalling Rs. 9,31,759 on instructions from the Cyber Crime Police Station, Ballia without any FIR served on him, without any summons, and without any magistrate’s order. A government school teacher whose salary account, the very account from which his home loan EMI was auto-debited , was frozen since November 2024, after a single credit of Rs. 10,000 from Bengaluru, which the petitioner contends was a clerical error. An account holder whose entire HDFC account was blocked indefinitely on the basis of a Cyber Police Portal Acknowledgement, without being named as an accused, without being shown any FIR, and without any hearing whatsoever.These are not criminals. They are collateral damage in a war against cybercrime that has been fought without rules of engagement.
“The petitioner contends that his entire account has been blocked indefinitely, which is severely affecting his livelihood and family obligations, without the authorities supplying him any FIR, complaint, or judicial order in that regard.”
Allahabad HC, recording the case of petitioner in Writ-C No. 648 of 2026
The Legal Framework: What the Law Actually Says
Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which replaces Section 102 of the erstwhile CrPC empowers a police officer to seize property alleged or suspected to have been stolen, or found under circumstances giving rise to suspicion of an offence. The Supreme Court, in State of Maharashtra v. Tapas D. Neogy (1999) 7 SCC 685, settled that a bank account is ‘property’ within this meaning and may be seized if it has a direct link to the commission of an offence. That much is clear, and the Allahabad High Court does not disturb this position.
But what is equally clear from the statutory text, and what police authorities have wilfully ignored, is that Section 106 is not a blanket licence. The Court spells this out across four questions it identifies for determination: whether ‘property’ means the entire account or only the suspected amount; whether prior notice to the account holder is necessary; how Sections 106 and 107 BNSS operate distinctly from each other; and where jurisdictional authority lies in inter-state cybercrime cases.
Question I: The Entire Account Is Not a Crime Scene
The most consequential holding of the judgment is on the first question. Police authorities have, as a matter of routine practice, frozen entire bank accounts when only a small, sometimes microscopic amount is alleged to be tainted. The Court firmly rejects this practice.
“The power of seizure is limited to the extent of the alleged or suspicious amount and cannot be construed to permit freezing of the entire operation of the bank account… Property being a specific amount, the entire amount lying in a bank account cannot be freezed and operation of bank account cannot be denied.”
— Para 36, Ashish Rawat v. Union of India (2026)
Consider the grotesque proportionality of what was being done. In Writ-C No. 2691 of 2026, an account was frozen over two transactions, one of Rs. 60 and another of Rs. 1. The entire account, with all the petitioner’s savings, was rendered non-operational over sixty-one rupees in alleged suspicious credits. The Court’s holding that the freeze must be limited to the suspect amount, is not merely a legal position; it is a demand for basic proportionality and common sense.
This principle aligns with the Madras High Court in Mohammed Saifullah v. Reserve Bank of India, which held that a blanket freeze violates fundamental rights to trade, business, and livelihood. It echoes the Delhi High Court in Neelkanth Pharma Logistics v. Union of India, where freezing an entire account over a small disputed amount was held disproportionate, and placing a lien on the specific disputed amount was declared the legally appropriate interim measure.
Question II: No Prior Notice, But Post-Seizure Intimation Is Mandatory
The Court holds that prior notice to the account holder is not a legal requirement before seizure, consistent with the Supreme Court’s ruling in Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372. The rationale is pragmatic: requiring advance notice would allow funds to be dissipated before the freeze takes effect.
But, and this is a crucial ‘but’ , the mandatory requirements of Section 106(2) and 106(3) BNSS, reporting the seizure to the officer in charge and forthwith reporting to the jurisdictional Magistrate, must be complied with. And banks must inform account holders after the seizure is effected:
Bank account holders, being consumers of the banks, are at least entitled to be informed of the seizure of their accounts, which renders them non-operational, so as to protect themselves from hardships and to take appropriate legal recourse.”
— Para 40, Ashish Rawat v. Union of India (2026)
This observation is in fact a recognition of a basic consumer right. A person whose account is frozen without any intimation cannot protect themselves, arrange alternative financial arrangements, approach a lawyer, or petition a court. The information blackout is not a procedural technicality, it is a denial of agency.
Question III: Seizure vs. Attachment- A Distinction That Protects Liberty
One of the more technically significant contributions of this judgment is its delineation of the two-stage framework under the BNSS. Section 106 is a seizure power- immediate, investigatory, temporary, exercisable by the police officer. Section 107 is an attachment power more severe, longer-term, requiring a Magistrate’s application, a show-cause notice to the account holder, and a judicial finding that the property represents proceeds of crime.
“Seizure under Section 106 is therefore immediate and investigatory in nature, while attachment under Section 107 is precautionary and may be invoked independently at both stages. It follows that the applicability of one provision does not automatically trigger the other.”
— Para 50, Ashish Rawat v. Union of India (2026)
Investigating agencies had been using Section 106 to effect what are, in substance, long-term attachments without magisterial orders, without show-cause notices, and without findings on proceeds of crime. The Court rejects this conflation. If an agency wishes to freeze funds for the duration of a trial, it must follow the rigorous process under Section 107, with full judicial oversight. Section 106 cannot be used as a backdoor to achieve the effect of Section 107 without the safeguards of Section 107.
The Bombay High Court in Kartik Yogeshwar Chatur v. Union of India (2025 SCC OnLine Bom 4778) held that an investigating agency has no power of debit-freezing under Section 106 at all. The Delhi High Court in Malabar Gold and Diamond Limited v. Union of India (2026 SCC OnLine Del 297) held that blanket freezing of accounts of persons who are neither accused nor suspects violates Articles 19(1)(g) and 21 of the Constitution.
Question IV: Jurisdiction Follows the Bank, Not the Transaction
In many of these cases, the suspicious credit originated from a police station in a different state, Karnataka, Telangana, Gujarat, West Bengal,while the account itself was in Uttar Pradesh. The Court resolves this swiftly: jurisdiction vests with the Magistrate where the account is situated, regardless of where the transaction originated.
There is no iota of doubt that the jurisdiction is of the place where the account is being seized irrespective of the place from where the transfer or deposit is being made.”
— Para 53, Ashish Rawat v. Union of India (2026)
To hold otherwise would leave account holders in Uttar Pradesh with no accessible magistrate to approach, while requiring them to travel to Karnataka or Telangana to seek redress. The digital nature of transactions does not export jurisdiction away from the place where the citizen’s account and the citizen’s hardship is located.
The Court’s Four-Point Charter for Account Holders
The judgment’s operative directions (Para 55) constitute a practical charter of protection:
1. Lien, not blanket freeze: Banks must place under lien only the specific amount identified by the Investigating Officer, and must restore full operation of the account within one week.
2. Right to approach the Magistrate: Petitioners are free to approach the jurisdictional Magistrate wherever the account is frozen in non-compliance with Section 106 BNSS, or even where compliant if they believe the freeze is unjustified.
3. Specificity in seizure orders: Police and investigating agencies must clearly specify the suspected amount when issuing directions to a bank under Section 106 BNSS. Vague or blanket freeze orders are impermissible.
4. Bank’s duty to inform: Banks must, upon effecting any seizure, freezing, or lien, promptly inform the account holder of the action, the reason, and the operational status of the account.
A National Chorus of Judicial Concern
The Allahabad High Court does not stand alone. What we are witnessing is a consistent national judicial response to a systemic abuse. The Kerala High Court was among the first to draw the line in Headstar Global Pvt. Ltd. (2025), holding that proceeds of crime may only be attached under Section 107, with magisterial sanction. The Bombay High Courtin Kartik Yogeshwar Chatur (2025) quashed all debit-freeze orders issued under Section 106. The Delhi High Court in Malabar Gold (2026) held that freezing innocent third parties’ accounts violates fundamental rights.
The Supreme Court in State of West Bengal v. Anil Kumar Dey (2025 SCC OnLine SC 2753) reaffirmed that freezing orders under Section 106 can only operate to aid investigation, and their continuation beyond investigation is not automatic. Earlier, Delhi courts had directed the Ministry of Home Affairs to frame a uniform national policy, a call that resulted in the MHA’s Standard Operating Procedure dated January 2, 2026.
What Remains to Be Done
The judgment, admirable as it is, cannot solve everything alone. The MHA’s SOP of January 2026, while a welcome step, operates only prospectively. Questions remain about enforcement: will Investigating Officers actually report seizures to Magistrates? Will banks actually inform account holders? Will Magistrates, when approached, have the capacity and will to provide timely relief?
The systemic answer lies in three directions. First, accountability: banks and investigating officers who violate Section 106’s safeguards must face consequences, not just quashing of the freeze, but civil liability for the harm caused. Second, awareness: most citizens whose accounts are frozen do not know they have a right to approach the jurisdictional Magistrate, and fewer still can afford legal assistance. Third, technology: the systems that enable cybercriminals to route funds through innocent accounts can be used to automate compliance generating automatic Magistrate intimations, tracking lien amounts, and setting statutory deadlines for de-freezing.
Until then, the courts remain the last line of defence for the ordinary citizen caught in the crossfire of the digital economy’s darkest problem. The Allahabad High Court, in this judgment, has made that line of defence considerably stronger.
Cases cited:
Ashish Rawat v. Union of India, WRIT-C No. 1489/2026 (All. HC, Apr. 8, 2026); State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685; Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372; Nevada Properties Pvt. Ltd. v. State of Maharashtra, (2019) 20 SCC 119; State of West Bengal v. Anil Kumar Dey, 2025 SCC OnLine SC 2753; Headstar Global Pvt. Ltd. v. State of Kerala, 2025 SCC OnLine Ker 3546; Kartik Yogeshwar Chatur v. Union of India, 2025 SCC OnLine Bom 4778; Malabar Gold and Diamond Limited v. Union of India, 2026 SCC OnLine Del 297; Neelkanth Pharma Logistics Pvt. Ltd. v. Union of India, 2025 SCC OnLine Del 1055.
SM Haider Rizvi, Advocate, High Court, Lucknow Bench, Lucknow. [Email: myvakil@gmail.com]