Chandigarh: The Punjab and Haryana High Court has delivered a significant judgment regarding banking rights, stating that freezing a person’s entire bank account based on a minor suspicious transaction is illegal. The court has directed HDFC Bank to reactivate the account of a petitioner, emphasizing that such drastic measures cannot be taken without following proper legal procedures. Justice Jagmohan Bansal’s bench presided over the hearing of Tripat Jit Singh’s petition, noting that freezing an entire account over a suspicious entry of only 5,000 rupees is unjustifiable.
The petitioner informed the court that his bank account was frozen without any prior notice following a single suspicious entry. He argued that there were no criminal cases registered against him, nor was he accused of involvement in any fraudulent activity. During the proceedings, the bank claimed the action was taken following instructions from law enforcement agencies. However, the bank admitted it did not possess a magistrate’s order and had no information regarding any criminal role played by the petitioner.
The High Court clarified that under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, a bank account cannot be frozen directly by a bank without a magistrate’s permission. The court observed that closing an innocent person’s entire account unnecessarily impacts their daily life and livelihood. While the court ordered the immediate restoration of the account, it specified that the disputed amount of 5,000 rupees will remain frozen and cannot be used for the time being. The court concluded that while future action could be taken if the account holder’s involvement in a crime is proven, the rights of citizens cannot be violated without adhering to statutory processes.
