Odisha: Freezing entire account during investigation is wrong, says Odisha High Court
CUTTACK: The Orissa High Court has held that police authorities do have the power to freeze bank accounts during criminal investigations, but freezing the entire account of a running business without identifying the alleged illegal amount is excessive and unfair.
The ruling was given by a single judge bench of Justice SK Panigrahi while considering a petition filed by an authorised LPG distributor operating under Bharat Petroleum Corporation Limited in Gajapati district.
Noting a growing number of similar disputes, Justice Panigrahi also urged the Ministry of Home Affairs to consider creating a uniform national policy and standard operating procedure on freezing bank accounts during investigations. “The aim should be to balance the rights of a complainant. vis-a-vis the right of innocent and unwary account-holder made to face unwarranted hardship on account of blanket freezing of account,” the Judge observed.
The distributor had challenged the freezing of its current account by a nationalised bank at its Paralakhemundi branch. The bank had frozen the account on September 2, 2025, after receiving an email from the Cyber Crime police station in Thiruvananthapuram in connection with cyber fraud case.
The petitioner argued that the freeze had brought the LPG distributorship’s operations to a halt and was imposed without prior notice or clear legal authority. The distributor sought de-freezing of the account while allowing the bank to hold any amount suspected to be linked to the investigation.
