Padamchand Kumar Jain, a kachori seller from Triveni Nagar, Jaipur, faced a major setback when his primary account with the Bank of Maharashtra was suddenly frozen on August 16. The action was taken following directions from the Telangana Cyber Crime Police. Since this account was used for his business transactions, the freeze caused serious disruption to his livelihood.
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High Court Intervention
Seeking relief, Padamchand approached the Rajasthan High Court. Justice Anoop Dhand’s bench heard the matter and directed the bank to defreeze the account. The Court also sought replies from the Centre and the Reserve Bank of India (RBI), raising a key legal question: Can a bank freeze an account solely on the instructions of an investigating agency? Further, the Court asked the Ministry of Home Affairs and RBI to provide existing guidelines regarding such actions.
Bank and Government’s Stand
Representing the bank, advocate Dharmveer Tholia argued that the account was linked to a cyber fraud case in Telangana. Six transactions related to the fraud had passed through Padamchand’s account, involving deposits totaling ₹5,000 from states including Telangana, Tamil Nadu, Odisha, and Himachal Pradesh. The bank claimed the freeze was necessary as part of the investigation.
Meanwhile, the state government informed the Court that Rajasthan Police follow the May 9, 2025, circular issued by the Cyber Police DGP in such matters.
Policy Concerns Raised
During the hearing, the Centre admitted that there is currently no uniform national policy on freezing bank accounts in cyber fraud cases. At present, such actions are carried out under the Ministry of Home Affairs’ circulars. The Court expressed concern over the lack of clear rules and directed both the RBI and the Centre to formulate a transparent and comprehensive policy. This, the bench noted, is crucial to prevent unnecessary hardships for traders and ordinary citizens whose accounts may be frozen without prior notice.