Introduction

Reaffirming its consistent jurisprudence against indiscriminate bank account freezes, the Rajasthan High Court, Jaipur Bench, has once again ruled that banks cannot freeze an entire account when only a limited disputed amount is under investigation.

The ruling was delivered in Jagdish Prasad v. State of Rajasthan & HDFC Bank, decided on 28 January 2026, strengthening constitutional safeguards for individuals affected by cybercrime investigations.

Case Background

The petitioner, Jagdish Prasad, aged about 41 years and a resident of Bharatpur, Rajasthan, approached the High Court challenging the complete freezing of his bank account maintained with HDFC Bank Ltd., Matsya Industrial Area Branch, Alwar.

The bank account was frozen pursuant to a notice issued by the SHO, Cyber Police Station, North West Delhi, in connection with an alleged cybercrime transaction. While the entire account was rendered inoperative, the amount allegedly involved in the investigation was only ₹4,514.

Aggrieved by the blanket freezing and the resulting financial hardship, the petitioner invoked the writ jurisdiction of the High Court under Article 226 of the Constitution of India, alleging violation of his fundamental rights under Articles 14, 19(1)(g), and 21, as well as breach of principles of natural justice.

Issues Before the Court

• Whether freezing the entire bank account of the petitioner was legally justified when only a specific disputed amount was involved.
• Whether such blanket freezing amounts to an arbitrary and unconstitutional restriction on the petitioner’s rights.
• What is the legally permissible extent of bank account freezing during cybercrime investigations.

Petitioner’s Submissions

The petitioner submitted that:

• He had never misused his bank account for illegal or fraudulent transactions.
• He was not involved in any cybercrime.
• Freezing the entire account was arbitrary, unlawful, and disproportionate.
• He was ready and willing to cooperate with the investigating agencies and bank authorities as and when required.
• At most, only the disputed amount could be frozen, and the remaining balance should be released for lawful use.

Respondents’ Submissions

The respondent bank contended that:

• The account was frozen strictly in compliance with the notice issued by the Cyber Police Station, North West Delhi.
• As per information available, the disputed amount was approximately ₹4,514.
• The petitioner should be directed not to close or discontinue the bank account until completion of investigation or conclusion of criminal proceedings.

The petitioner’s counsel agreed to these limited safeguards.

Observations of the High Court

After hearing both sides, the High Court observed that:

• There was no prima facie material to indicate the petitioner’s involvement in fraudulent or illegal activity.
• Freezing the entire bank account imposes serious prejudice on the rights and livelihood of the account holder.
• The bank is legally entitled to retain a lien only to the extent of the disputed amount related to the alleged offense.
• Blanket freezing of bank accounts is disproportionate and unsustainable in law.

The Court reiterated that investigative measures must remain preventive in nature and cannot operate as punishment.

Final Order and Directions

The writ petition was disposed of with the following directions:

• The respondent bank was directed to defreeze the petitioner’s bank account.
• The petitioner was allowed to operate and transact through the account normally.
• Only the disputed amount of ₹4,514 shall remain frozen.
• The petitioner shall cooperate with the bank authorities and investigating agencies and appear whenever required.
• The petitioner shall not close or discontinue the bank account without prior permission.
• If, after investigation, the petitioner is found involved in any illegal transaction, he shall be liable to face action in accordance with law.
• All pending applications, if any, stood disposed of.