Probe agencies can't be high-handed in freezing bank A/Cs: Allahabad HC

Allahabad HC flags procedural lapses in cyber fraud probes, seeks clear rules and 24-hour intimation to customers when banks freeze accounts

The Allahabad High Court has observed that there can be no room for discrimination or high-handedness when investigating agencies instruct banks to freeze accounts during cyber fraud probes.

A division bench of Justice Atul Sreedharan and Justice Siddharth Nandan is examining the procedures adopted by authorities in such cases. The court noted that banks often freeze accounts without providing much information to the holders.

The observation came during the hearing of a writ petition filed by a man named Tarkeswar Tiwari.

"Various writ petitions before us disclose that banks have frozen the accounts and when the customers approach them, they are only informed that the accounts have been frozen on the letter either by the police authorities or the cyber crime. However, the said letters till date have not been brought on record in spite of the specific instructions on the previous dates," the court said.

 

The court has directed the Union government to address these concerns, noting that despite various judicial rulings, procedural anomalies continue to exist.

"We find that courts have dealt with issues with respect to powers of the investigating agencies but the issue which is being considered in the present batch of writ petitions, needs to be addressed to settle the said procedural anomaly, for the contingencies under which the bank account are being frozen and which is a necessary step towards ensuring that the banks concerned and the bank account holders, may continue to operate and retain the mutual trust, with their hard-earned money," the court said, adding that the only exception to such a procedure, will be a procedure prescribed by law, with no element of discrimination and element of high-handedness.

In its order passed on February 10, the court recorded that the Union government has undertaken to address these issues by way of an affidavit.

Key points to be included in the affidavit include the contingency under which an account can be frozen, that is, the procedure prescribed under any statute, rules or regulations; ensuring the amount to be frozen shall be specifically indicated in each order. If not specified, the concerned bank will be at liberty to seek instructions and freeze only the amount indicated. Upon receiving a communication to freeze an account, the bank shall be under an obligation to intimate the same within 24 hours to the account holder on his given address or preferred mode of communication.

The court has also asked for a standard operating protocol (SOP) dated January 2, 2026, to be brought on record, with specific indication as to the procedure, if any, with respect to what should be done prior to freezing of the bank accounts.

The matter is listed for its next hearing on February 26.