Delhi High Court Limits Bank Account Freeze to Disputed Amount in Crypto-Cyber Probe
Delhi High Court noted Section 102 CrPC is intended as an evidentiary safeguard to preserve property connected to a crime, not as a punitive tool to choke a person's finances.
The Delhi High Court has recently ruled that investigative agencies cannot indiscriminately freeze entire bank accounts when the allegedly tainted amount is clearly identifiable. The court emphasized that while Section 102 of the Criminal Procedure Code empowers police to seize property, this power must be exercised through the prism of proportionality to avoid causing financial paralysis to citizens.
The order was passed by a bench of Justice Jasmeet Singh, while observing that Section 102 CrPC is intended as an evidentiary safeguard to preserve property connected to a crime, not as a punitive tool to choke a person's finances.
The bench noted, “power to freeze a bank account, though undoubtedly available, is a drastic one and must, therefore, be exercised with due application of mind and for cogent reasons, which ought to be reflected, at least briefly, in the communication directing such freezing.”
The petitioner, a full-time cryptocurrency trader, found his savings account completely frozen following instructions from police authorities in Bihar, Tamil Nadu, Haryana, and Delhi. These "liens" were placed after certain Peer-to-Peer (P2P) transactions were flagged in cyber-crime investigations.
The petitioner argued that he was not named as an accused in any of the FIRs. It was also submitted that the total disputed amount across all jurisdictions was approximately ₹1.63 Lakh, yet his entire account balance was made inaccessible. Such a blanket freeze violated his right to livelihood and the principle of proportionality, the petitioner argued.
Court noted that once the allegedly tainted sum is identified, the investigative purpose is served by placing a lien on that specific amount. Keeping the entire account frozen is manifestly disproportionate, especially when the account holder is not a primary accused and the funds are required for daily sustenance.
It further provided a detailed breakdown of the legitimate liens to be maintained by Kotak Mahindra Bank based on police notices and directed the bank to unfreeze the remaining balance immediately, allowing the petitioner to operate the account freely beyond the specified lien amount.
Case Title: Yadhuvir Singh Manhas v. Kotak Mahindra Bank and Ors..
Bench: Justice Jasmeet Singh
Order Date: January 13, 2026