Professional Fee Paid By Accused-Client Is Not 'Proceeds Of Crime' Unless Advocate Himself Is Complicit: Allahabad High Court

Sparsh Upadhyay

1 July 2026 12:07 PM IST

  • Professional Fee Paid By Accused-Client Is Not Proceeds Of Crime Unless Advocate Himself Is Complicit: Allahabad High Court

    An Advocate could be defending an accused who is indeed involved in a big scam or fraud but when fee is remitted by such an accused to his learned Counsel in account the money cannot be said to be proceeds of crime, High Court said.

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    In a significant observation, the Allahabad High Court has held that a fee remitted to an advocate from an accused for his professional duties cannot be arbitrarily classified as "proceeds of crime" unless the advocate is himself involved in a criminal offence.

    A bench of Justice JJ Munir and Justice Arun Kumar remarked thus while taking severe exception to the Cyber Cell freezing an advocate's entire bank account due to "some fraudulent transactions".

    Taking a stern view of the matter, the bench has called for a personal affidavit from the Additional Chief Secretary (Home), Uttar Pradesh, demanding an explanation on how the State plans to regulate such seizures by "sundry officers of the Police" to ensure they do not interfere with the dispensation of justice itself in Courts.

    Briefly put, the bench was hearing a writ petition filed by Ayush Bajpai, a practising advocate, challenging the freezing of his bank account on the instructions of the Uttar Pradesh Police's Cyber Cell, over alleged fraudulent transactions.

    It was his case that the credit in his account was the professional fee he received from his client, an accused.

    Taking into account the practical reality, the bench said that an advocate can be paid his fee by the Government, by a respectable man or a man who is not so respectable.

    It drew a clear distinction between money derived from illegal activities and the legitimate remuneration earned by a lawyer for discharging his statutory duties.

    "An Advocate could be defending an accused who is indeed involved in a big scam or fraud but when fee is remitted by such an accused to his learned Counsel in account the money cannot be said to be proceeds of crime."

    The Bench said that it is the "lawful remuneration" of the learned counsel which would be duly earned after the engagement is discharged.

    "If for the remittance of any sum of money, an Advocate's account is frozen describing it as a cyber fraud or the money as proceeds of a cyber fraud or other crime it could become very difficult for Advocates to discharge their professional duties under the Advocates Act. The functioning of the Court itself would be embarrassed", the bench remarked.

    The bench, however, clarified that it would be quite a different matter if an Advocate himself is involved in a criminal offence and has credits in his account that are proceeds of his own crime.

    In this regard, the bench also referred to the High Court's recent ruling in the cases of Khalsa Medical Store Thru. Prop. Yashwant Singh vs Reserve Bank Of India Thru. Governor and 3 Others 2026 LiveLaw (AB) 44 to stress that on account of a fraudulent transaction, the Cyber Cell cannot freeze the entire Bank Account except that which is the proceeds of a suspicious transaction or a crime.

    The bench noted that in the present case, the bank account had modest credits of sums of Rs. 20,000/- on 18th March, 2026, Rs. 3,700/- on 23rd April, 2026 and two other credits of Rs. 3,700/- on 23rd April, 2026. The total balance in the petitioner's account is a sum of Rs. 103071/-.

    Hence, seeking a personal affidavit from the ACS (Home), UP, the matter has been listed next as a fresh case on July 17, 2026.

    Sparsh Upadhyay

    Sparsh Upadhyay

    Sparsh Upadhyay is an Associate Editor with LiveLaw

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