Daijiworld Media Network – New Delhi

New Delhi, Feb 27: The Delhi High Court has cautioned enforcement agencies against indiscriminate freezing of bank accounts, emphasizing the need to balance the rights of complainants with those of innocent account holders. It has also urged the central government to establish clear policies on the issue.

Justice Manoj Jain stressed that enforcement agencies must exercise "care, caution, and compassion" when freezing accounts, recognizing the severe financial hardships such actions can impose. The court directed the Union Ministry of Home Affairs to draft uniform guidelines and standard operating procedures (SOPs) to prevent undue hardships.

The observations came in response to a case where a company’s bank account was frozen over a suspicious transaction of just ?200. The court criticized such blanket actions, warning they could cause unnecessary financial disruption.

Justice Jain suggested that authorities should consider marking a lien on the disputed amount rather than freezing entire accounts, ensuring financial security for innocent parties while still securing disputed funds.

The court also highlighted concerns regarding cybercrime investigations, where fraudulent transactions often lead to mass account freezes, impacting many innocent recipients. It acknowledged that enforcement agencies have the right to recommend account freezes but stressed that they must provide clear reasons for such actions.

The ruling underscored the broader consequences of freezing bank accounts, particularly for small vendors and businesses, warning that such measures could lead to dishonored cheques, disrupted business operations, and economic distress.