Karnataka High Court Orders Defreezing Of Advocate's Bank Account; Says Police Increasingly Freezing Accounts Without Adequate Material

The Karnataka High Court has recently held that 'serious and drastic measures' such as freezing a bank account in entirety cannot be resorted to in 'a casual and mechanical' manner since it paralyses the financial autonomy of a person.The single judge bench of Justice Sachin Shankar Magadum, while partly allowing a writ petition filed by a practising advocate whose Karnataka Bank Account was frozen, based on a complaint registered at the Cyber Crime Police Station in Indore, Madhya Pradesh, noted as below:“..The primary object of directing debit freeze is to secure the alleged 'proceeds of crime' or to preserve the subject matter of investigation in relation to a cognizable offence. Therefore, such power must necessarily be exercised only when there exists a live and proximate nexus between the funds in the account and the alleged criminal activity, ordinarily backed by the registration of a First Information Report and supported by some tangible material indicating involvement in a cognizable offence”.The court added that complete defreezing without the aforesaid valid grounds 'trenches upon the fundamental right to carry on profession and to deal with one's property'.The High Court has also flagged the 'increasing tendency on the part of investigating agencies' to try and invoke debit freezing even when there isn't 'a slender piece of evidence' that the amounts in the accounts constitute proceeds of crime.Before the High Court, the 44-year-old lawyer argued that the amount of Rs 60,000/- was paid to him by one of his clients from Indore who wanted legal representation before the Securities Appellate Tribunal (SAT), Mumbai. The disputed amount has been collected by thim as professional fees, the petitioner argued. The petitioner-lawyer argued that the same client then lodged a false complaint with the Cyber Police, though the amount received was not in connection with any illegal activity.Thereafter, Karnataka Bank froze the lawyer's bank account after receiving intimation from Indore Cyber Police. However, the court opined that the complete freezing of the bank account was disproportionate in light of the absence of any cogent material linking the entire account balance to any cognisable offence.“…Such indiscriminate freezing, often without registration of an FIR or without any meaningful investigation, results in disproportionate hardship and amounts to an unwarranted invasion into the financial rights of citizens. The power to freeze, being drastic in nature, must be exercised with circumspection, guided by the principles of necessity, proportionality and procedural fairness…”, the court said.However, not to prejudice the ongoing investigation, the court ordered a lien to the tune of the disputed amount, i.e., Rs 60,000/- and directed the bank to defreeze the bank account. The petitioner can now operate the account over the lien amount, the court added.“….Having regard to the submission that the complaint is at a nascent stage, liberty is reserved to the petitioner to approach this Court for appropriate relief, in the event no First Information Report is registered or if the investigation does not progress in accordance with law within a reasonable time”, the court concluded.Appearance: Advocate Ranganath M.A. for the petitioner, AGA Aditya Diwakar for the State, Advocate K.V. Shyamprasada for the Bank.Case Title: Channakeshava D.R v. State of KarnatakaCase No: WP 1901/2026Click Here To Read/Download OrderCitation: 2026 LiveLaw (Kar) 179

Karnataka High Court Orders Defreezing Of Advocate's Bank Account; Says Police Increasingly Freezing Accounts Without Adequate Material

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Karnataka High Court Orders Defreezing Of Advocate's Bank Account; Says Police Increasingly Freezing Accounts Without Adequate Material

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