The Himachal Pradesh High Court ruled that investigating agencies cannot freeze an individual's entire bank account over disputed credits, upholding the right to livelihood while permitting liens only on the specific amount under investigation.
High Court Ruling on Bank Account Freezes
The Himachal Pradesh High Court has ruled that investigating agencies cannot impose a blanket debit freeze on an individual's entire bank account over an incidental or disputed credit linked to a cybercrime investigation, particularly when the account serves as the person's sole source of livelihood. Justice Sandeep Sharma, while deciding a petition filed by Shiv Singh against the State of Himachal Pradesh and others, directed the State Bank of India (SBI) to immediately lift the complete debit freeze imposed on the petitioner's salary account, while allowing the bank to maintain a lien or hold on the specific amount under investigation.
The petitioner, a government employee working as a Patwari, had approached the court after his salary account was completely frozen following cybercrime complaints originating from Thane in Maharashtra and Malkajgiri in Telangana. According to the case, the petitioner had won Rs 21,000 through an online gaming application, Yono Games, and the amount was credited to his SBI salary account. The transaction was subsequently flagged during cybercrime investigations, leading to a complete debit freeze on his account.
Legal Grounds and Court Observations
Protecting the Right to Livelihood
The petitioner submitted that the freezing of his entire salary and savings had caused serious financial hardship, leaving him unable to meet routine household expenses, medical requirements, school fees and loan instalments. The court observed that although investigating agencies have the authority to freeze bank accounts in connection with cybercrime investigations, such powers must be exercised proportionately and with due consideration to the circumstances of the account holder. It emphasised that authorities should explore less restrictive measures, including placing a lien on the specific disputed amount, instead of freezing the entire account and depriving an individual of access to legitimate funds.
The court also highlighted the importance of protecting the right to livelihood, observing that salary constitutes a vital source of sustenance and that depriving an individual of access to it without adequate justification and due process raises serious constitutional concerns. Referring to legal precedents from the Delhi and Kerala High Courts, the bench underscored that the rights guaranteed under Articles 14, 19(1)(g) and 21 of the Constitution must be respected while exercising investigative powers. The court stressed that an individual receiving a disputed credit incidentally cannot automatically be deprived of access to his entire salary and savings without examining the circumstances and establishing the necessity of such a restrictive measure.
Directives to Financial Institutions
Allowing the petition, the High Court directed SBI to remove the complete debit freeze from the petitioner's account forthwith, enabling him to access his salary and other legitimate funds. However, the bank was permitted to retain a lien or hold on the specific disputed amount involved in the cybercrime investigation, ensuring that the investigation could continue without unnecessarily affecting the petitioner's livelihood. The judgment reinforces the principle that investigative measures must remain proportionate and that the legitimate financial interests and constitutional rights of individuals cannot be overlooked merely because a particular transaction has been flagged during a cybercrime probe.
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