Faridabad: A ₹150 UPI payment was enough to paralyse the banking life of a Faridabad nursery owner for over a year, after his account was frozen in connection with a cyber fraud case—despite no allegation against him. The account was finally restored only after he approached the High Court, which ruled that bank accounts cannot be frozen without an order from a jurisdictional magistrate.
The case has brought renewed attention to a growing problem affecting thousands of small shopkeepers, street vendors and traders, whose accounts are routinely frozen when cyber fraud money briefly passes through them during routine digital transactions.
Certified Cyber Crime Investigator Course Launched by Centre for Police Technology
According to the case details, the nursery owner sold a small plant and a flower pot to an unknown customer for ₹150 in November 2024. The customer paid through UPI and left. Days later, the nursery owner discovered that his bank account had been blocked. Bank officials later informed him that the amount credited to his account was allegedly linked to a cyber fraud case registered at Chandrapur police station in Chhattisgarh.
Under current cybercrime protocols, all accounts through which fraudulent money travels are frozen to prevent further dissipation of funds. This includes accounts of individuals who unknowingly receive such money during legitimate business transactions.
Account frozen despite no complaint or case
The nursery owner maintained that he had no knowledge that the payment he received was linked to fraud. Like most small traders, he had no way of verifying the source of UPI payments at the time of sale. Despite repeatedly approaching local police and cybercrime officials, his account remained frozen.
The freeze left him unable to access more than ₹1 lakh deposited in the account, disrupting his business and personal finances. With no relief forthcoming, he finally approached the High Court in January 2025 through his counsel.
After hearing the matter, the court ordered the immediate restoration of the account and made a significant observation: bank accounts cannot be frozen without prior authorisation from the area magistrate. The ruling has been seen as a crucial safeguard for innocent account holders caught in cybercrime investigations.
A widespread and recurring problem
Cybercrime officials acknowledge that this is not an isolated case. Hundreds of similar complaints reach cyber police stations every month. Most victims are small shopkeepers who accept UPI payments for everyday transactions and later find their accounts frozen without prior notice.
In many cases, traders are unaware of the reason behind the freeze and are forced to travel across districts or states to approach the police station where the original cybercrime case was registered.
Earlier cases underline the scale
In October 2025, a cyber fraud case involving ₹4.43 crore led to the freezing of nearly 36,000 bank accounts across multiple states, including Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, Maharashtra, West Bengal, Gujarat, Delhi, Himachal Pradesh, Uttarakhand and Karnataka. Investigations later revealed that most account holders had no knowledge that the money credited to them was fraudulent.
In another instance, a Mumbai-based garment shop owner received ₹2,000 via UPI for a clothing sale. Days later, his account was frozen in connection with a cybercrime case registered in Faridabad. Although his account was eventually restored after police verification, he remained without access to his primary business account for several days.
Why accounts get frozen
Cybercrime officials explain that when victims report fraud by calling the national cybercrime helpline 1930, the Ministry of Home Affairs initiates an immediate trail of the stolen money. Every account in the transaction chain is temporarily frozen to prevent withdrawal or laundering.
While the mechanism is intended to protect victims, officials admit it often causes severe hardship to innocent recipients. Senior officers have acknowledged the issue and said representations have been sent to higher authorities seeking a more balanced approach that protects fraud victims without crippling legitimate businesses.
Call for systemic reform
Legal experts say the High Court’s ruling could offer relief to thousands of traders, but warn that clearer guidelines are urgently needed. As digital payments become ubiquitous, the absence of safeguards for innocent recipients risks undermining trust in cashless transactions.
For small traders, the Faridabad case stands as a stark reminder that even the smallest digital transaction can have life-altering consequences—unless policy catches up with technology.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
