The Karnataka High Court has disposed of a public interest litigation that sought mandatory issuance of show-cause notices before freezing bank accounts during cybercrime investigations. The petitioner had argued that freezing a bank account is a severe measure that affects an individual’s financial rights, and therefore, authorities should first provide an opportunity for the account holder to respond.
A division bench led by the Chief Justice rejected the request, stressing that cybercrime cases operate within a highly sensitive timeframe often referred to as the “golden hour.” According to the bench, during this initial stage of investigation, any delay can result in irreversible loss of evidence. If authorities are required to wait for a show-cause reply, the suspect may rapidly move or withdraw funds, defeating the purpose of immediate intervention.
The Court emphasised that cyber-fraud investigations depend heavily on swift action because criminals frequently transfer misappropriated amounts across multiple accounts within minutes. Therefore, insisting on a prior notice requirement would seriously hamper effective investigation and recovery of funds. The bench remarked that such a system might allow offenders to “lose the money,” making recovery impossible.
During the hearing, the State informed the Court that a Standard Operating Procedure for dealing with the freezing and unfreezing of bank accounts in cybercrime cases is currently being drafted and circulated among stakeholders. Acknowledging this ongoing effort, the Court decided against issuing any specific directions that could overlap with or obstruct the policy-making process.
While declining the petitioner’s plea, the Court clarified that its order does not take away the rights of individuals whose accounts are frozen. Any person who feels aggrieved by a freezing order may seek legal remedies, including approaching the appropriate court or authority for relief, clarification, or modification. The bench reiterated that such individual grievances must be addressed on a case-by-case basis rather than through a broad directive imposed via a PIL.
The decision highlights the inherent tension between safeguarding financial rights and ensuring effective investigation of cyber offences. Some earlier High Court rulings across India have held that freezing an entire bank account without determining the specific suspicious amount may infringe the right to livelihood and trade. Such courts observed that authorities should quantify the alleged tainted amount before restricting access to funds. However, the Karnataka High Court in this case focused on the practical necessity for investigators to act quickly to prevent money laundering and dissipation of funds.
Ultimately, the Court prioritised investigative urgency over a pre-freeze hearing requirement, while leaving room for individual challenges. The ruling reflects a pragmatic judicial approach that balances constitutional rights with the operational realities of combating fast-evolving cybercrime.
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