The Delhi High Court has directed the Union Ministry of Home Affairs (MHA) to consider formulating guidelines and standard operating procedures (SOPs) for freezing bank accounts in cyber fraud cases. The directive was issued by Justice Manoj Jain while hearing a plea concerning the blanket freezing of accounts, which has become a recurring concern in courts.
The case involved Neelkanth Pharma Logistics Pvt. Ltd, whose HDFC Bank account was frozen on the instructions of Vartaknagar Police Station, Maharashtra, after a suspicious credit transaction of Rs 200. The petitioner approached the court, highlighting the undue hardship caused by such indiscriminate account freezes.
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Recognizing the increasing frequency of such cases, the Court emphasized that the MHA should take proactive measures by consulting stakeholders, including State and Union Territory authorities, to develop a uniform policy. The Court further stressed the need for compassionate handling of such matters by law enforcement agencies.
Justice Jain remarked that while investigating agencies have the discretion to freeze bank accounts, they must justify their actions. Unjustified account freezes can severely impact individuals and small businesses, potentially jeopardizing their financial stability. The Court suggested that instead of completely freezing accounts, marking a lien on the disputed amount should be the preferred interim measure to prevent undue hardship.
During the case proceedings, the Maharashtra Police instructed the bank to de-freeze the petitioner’s account, marking a lien of ₹200 instead. As the primary issue was resolved, the Court disposed of the petition.