In the case of Neelkanth Pharma Logistics Pvt. Ltd. vs Union of India & Ors., decided by the Delhi High Court on 20th February 2025, the petitioner challenged the freezing of its bank account by HDFC Bank based on a direction from the Vartaknagar Police Station, Thane, Maharashtra. The freeze was triggered due to a credit of merely Rs. 200, despite the account holding a balance exceeding Rs. 93.5 crores. The petitioner was not accused or even suspected in the cybercrime investigation that led to the freeze.
During the proceedings, it was informed that the police later directed the bank to remove the debit freeze while only marking a lien of Rs. 200. In view of this development, the petitioner withdrew the writ petition, but the Court made significant observations regarding the frequent misuse of blanket freezing powers.
The Court emphasized:
- Freezing entire bank accounts without reasons causes undue hardship and is often disproportionate to the disputed amount.
- A mere entry of Rs. 200 led to dishonoured cheques and halted business operations for the petitioner.
- Courts are witnessing a flood of such cases, including one where even a street vendor’s account was unjustly frozen, violating Article 21 of the Constitution.
- When a specific transaction is under scrutiny, only that amount should be preserved via lien, not by freezing the entire account.
- Similar concerns were raised by Kerala, Jharkhand, and Madras High Courts, and uniform guidelines were deemed necessary.
Key Citations:
- Pawan Kumar Rai vs Union of India, 2024 SCC OnLine Del 8936
- Dr. Sajir vs RBI, 2023 SCC Online Ker 9087
- Abdul Basith vs Cyber Crime Police, 2025 SCC OnLine Ker 83
- Mohammed Saifullah vs RBI, 2024 SCC OnLine Mad 5604
Direction to MHA:
The Court directed that a copy of the judgment be sent to the Ministry of Home Affairs (MHA) and suggested that the MHA take proactive steps to draft a uniform policy and SOP, in consultation with States/UTs, to avoid the blanket freezing of bank accounts and to balance the rights of complainants and innocent account holders.