Jaipur: The Rajasthan High Court has barred indefinite blanket freezing of bank accounts in cybercrime investigations, directing police to establish a prima facie link between an account or transaction and the alleged offence before imposing financial restraints. A single bench of Justice Anand Sharma issued the directions while deciding more than 100 writ petitions challenging the freezing, debit-freezing and lien marking of bank accounts following cyber-fraud complaints. The judgement was pronounced Thursday. The court held that vague, unverified or cryptic communications cannot justify completely immobilising a bank account. Investigators must identify the disputed amount, wherever possible, and ensure that any restraint is proportionate and periodically reviewed. Where the disputed amount is identifiable, the court said the normal course should be to place a lien or hold on that amount instead of freezing the entire account. A wider freeze may be imposed only in exceptional circumstances, including where an account is deliberately operated as a mule account, involves repeated suspicious transactions, the account holder’s conscious involvement is apparent, or segregation of suspected proceeds is impracticable. Reasons for wider restraint must be recorded and periodically reviewed. Petitioners’ counsel, including advocate Ravindra Saini, argued that freezing an entire account is arbitrary and disproportionate when suspicion relates only to a particular transaction. They submitted that restraint should ordinarily be limited to the identifiable disputed amount. The court directed police and investigating agencies to include the investigating officer’s details, case reference, relevant legal provision, account details, transaction ID/UTR and disputed amount, wherever available, in communications to banks. The DGP and senior Cyber Crime officers have been directed to issue a statewide circular within four weeks and designate a senior officer to monitor prolonged or disproportionate freezes. Banks have also been asked to designate nodal or grievance officers. The Reserve Bank of India has been asked to issue an advisory for periodic training of banking officials. The DGP, Cyber Crime Wing and RBI must submit a compliance report to the High Court Registrar General within eight weeks, including the mechanism for supervisory review of prolonged freezes.
