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2026 DAILYLAW 27290 (ORI)

Sairam Bharat Gas, Gajapati v. Union of India

2026-02-13

Sanjeeb K Panigrahi

body2026
JUDGMENT : Sanjeeb K.Panigrahi, J. 1.In the present Writ Petition, the Petitioner seeks issuance of an appropriate writ directing Opposite Party No.6, namely State Bank of India, Paralakhemundi Branch, to forthwith de-freeze the Petitioner’s Current Account No.00000034083697729, which is stated to have been frozen without prior notice and without any lawful authority. The Petitioner further prays for a direction permitting operation of the said account, subject to lien, if any, over the specific amount duly identified in connection with any pending investigation, and to allow full and unrestricted operation of the remaining balance therein. I. FACTUAL MATRIX OF THE CASE: 2. The Petitioner is a duly appointed LPG distributor operating under the name and style of M/s. Sairam Bharat Gas, engaged in the supply of domestic as well as commercial LPG cylinders to households and business establishments throughout Gajapati District, Odisha. The distributorship functions under the aegis of Bharat Petroleum Corporation Limited and is stated to be carrying on business in accordance with the terms and conditions governing such appointment. The Petitioner’s establishment is duly registered under the provisions of the Goods and Services Tax Act, 2017 and also holds a valid MSME registration, thereby evidencing its lawful commercial operations with due statutory compliances. 3. The Petitioner maintains a current account bearing No.00000034083697729 with the State Bank of India, Paralakhemundi Branch for all lawful business operations, including deposits, withdrawals, supplier payments, and statutory compliance. On 2nd September 2025, the Petitioner was shocked to find that its bank account was debit-frozen without any notice, order, or any intimation. Upon oral inquiry, the Petitioner was informed by the Branch Manager of the Bank that the freezing was done pursuant to an email the Cyber Crime Police Station, Kerala, in connection with Crime No. 69/2025/CCFS/TC-S of 2025 relating to an alleged cyber-fraud. Hence, this case. II. PETITIONER’S SUBMIS SIONS: 4. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions. (i) The Petitioner contends that it has no nexus whatsoever with the alleged offence under investigation and has neither been arrayed as an accused nor treated as a suspect in any criminal proceeding. It is further submitted that the Petitioner carries on bona fide commercial transactions in the ordinary course of its LPG distributorship business, including payments received through digital modes such as UPI and bank transfers. In this regard, a transaction with one Mr. It is further submitted that the Petitioner carries on bona fide commercial transactions in the ordinary course of its LPG distributorship business, including payments received through digital modes such as UPI and bank transfers. In this regard, a transaction with one Mr. Amit Bajubandho, a customer, has been specifically verified, and the said individual has executed an affidavit/written declaration affirming that the transaction was purely business-related and legitimate in nature, without any connection to unlawful activity. (ii) It is further contended that the freezing of the Petitioner’s bank account has been undertaken mechanically and without jurisdiction. The investigating agency has neither quantified nor identified the alleged “tainted amount,” if any, nor has any opportunity been afforded to the Petitioner to explain or clarify the nature of the transaction prior to taking such coercive action. The indiscriminate freezing of the entire account has effectively paralysed the Petitioner’s business operations. Salaries of employees, payments to suppliers, and discharge of statutory liabilities have been adversely impacted, thereby severely disrupting LPG distribution in the district. Such action, it is urged, has directly infringed the Petitioner’s right to carry on trade and business and its right to livelihood. (iii) The impugned action is stated to be a blanket freezing order, passed without identification or segregation of the alleged suspect amount. Such disproportionate and arbitrary exercise of power, unaccompanied by procedural safeguards, is violative of Articles 14, 19(1)(g), and 21 of the Constitution of India, as it imposes unreasonable restrictions on lawful commercial activity and deprives the Petitioner of access to its own funds without due process of law. (iv) Learned counsel for the Petitioner relied on the judgment of the High Court of Delhi in Neelkanth Pharma Logistics Pvt. Ltd. V. Union of India &Anr ., W.P.(C) 17905/2024, decided on20.02.2025, wherein it has been held that blanket freezing of accounts is wholly unjustified when the alleged disputed amount is identifiable, and that the appropriate measure is to mark a lien on the specific suspected amount rather than freezing the entire balance. (v) In Pawan Kumar Rai V. Union of India &Anr ., 2024 SCC OnLine Del 8936 it was observed that freezing entire bank accounts “has a serious and adverse implication and invades and encroaches upon the right to earn and live with dignity”, which is a component of Article 21.Article 21 of the Constitution encompasses the right to livelihood, as held by the Constitution Bench in Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 180 . Freezing of a business account deprives the Petitioner of its means of livelihood and, therefore, violates its fundamental right. (vi) The Kerala High Court in Dr. Sajir v. Reserve Bank of India & Ors ., 2023 SCC OnLine Ker 9087, held that where the exact amount suspected is known, there is no justification to freeze the entire account, and such actions should be guided by proportionality and fairness. (vii) It is further contended that the impugned action of freezing the Petitioner’s bank account has neither been preceded by issuance of any show-cause notice nor accompanied by any form of judicial oversight. The said action is thus alleged to be arbitrary, violative of the principles of natural justice, and devoid of procedural sanctity. The Petitioner further submits that in the absence of any demonstrated nexus between the alleged cyber-crime under investigation and the transactions undertaken in the course of its lawful business, the freezing of the entire account constitutes a disproportionate and excessive measure. Such action, it is contended, fails to satisfy the constitutional requirements of reasonableness, fairness, and proportionality that govern administrative and investigative powers. (viii) In view of the aforesaid submissions and the serious prejudice caused to its ongoing business operations, the Petitioner prays that this Court may be pleased to allow the Writ Petition and grant appropriate relief by directing de- freezing of the account, subject to such safeguards as this Court may deem fit in the interest of justice. III. OPPOSITE PARTYS ’ SUBMISSIONS: 5. Per contra, the learned counsel for the Opposite Parties earnestly made the following submissions in support of his contentions: (i) It appears from the record that a communication bearing Crime No. 69/2025/CCPS/TC-S dated 14.07.2025 was issued by the Cyber Crime Police Station, Thiruvananthapuram City, PTC Building, Thiruvananthapuram, Kerala, addressed to the Nodal Officer of State Bank of India. Per contra, the learned counsel for the Opposite Parties earnestly made the following submissions in support of his contentions: (i) It appears from the record that a communication bearing Crime No. 69/2025/CCPS/TC-S dated 14.07.2025 was issued by the Cyber Crime Police Station, Thiruvananthapuram City, PTC Building, Thiruvananthapuram, Kerala, addressed to the Nodal Officer of State Bank of India. By the said letter, the Bank was directed to furnish details of the Petitioner’s account maintained at its Paralakhemundi Branch, along with necessary certification under the Bankers’ Books Evidence Act, 1891, to the Inspector of Police, Cyber Crime Police Station, Thiruvananthapuram, Kerala. (ii) The said communication further instructed the Bank to place a “debit freeze” on Account No. 34036977299 and to intimate compliance to the investigating authority, so as to enable submission of a report before the competent Court. A complaint has been registered at Cyber Crime Police Station, Thiruvanthapuram by Mr. Abraham Thambi Raja as Crime No. 69/2025 in the said account under Section 318 (4),319 (2) and 3 (5) of the BNS Act, 2023 and Section 66 (D) of the I.T. Act. On the basis of the said complaint, investigation is being carried out by the said police station and during the said investigation, the Police Authority has directed the Opposite Party Bank to carry out their order for freezing the account of the petitioner. The Opposite Party Bank has lawfully acted as per the directions given by the Police Authority. (iii) It is submitted on behalf of the Bank that under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), the investigating officer is empowered to issue directions to a bank for freezing an account in connection with a criminal investigation. In view of such statutory authority, once a lawful communication is received from the competent police authority directing a “debit freeze”, the Bank is obligated to comply with the same. (iv) It is further contended that unless an appropriate order is passed by the jurisdictional Magistrate or competent Criminal Court directing de-freezing of the account, the Bank cannot unilaterally lift the freeze merely at the request of the Petitioner, as the account has been restrained pursuant to investigative proceedings. (iv) It is further contended that unless an appropriate order is passed by the jurisdictional Magistrate or competent Criminal Court directing de-freezing of the account, the Bank cannot unilaterally lift the freeze merely at the request of the Petitioner, as the account has been restrained pursuant to investigative proceedings. (v) The complaint has been registered under Section 3 1 8(4) of the BNS Act is the replacement of Section 420 of I.P.C. Hence, the penalties for cheating is 3-7 years of imprisonment, which needs detail investigation and trial for finding the truth. Therefore, any action for de-freezing the account. Section 319 (2) of BNS Act, prescribes the punishment for cheating by personation up to 5 years and fine, hence, it also needs detail investigation and trial. Any action for de-freezing the account of the petitioner may be fatal to the prosecution. (vi) It is further contended that the investigation in Crime No. 69/2025 is still pending before the competent police authority, and at this stage, the possibility of the Petitioner’s complicity cannot be conclusively ruled out. In such circumstances, it is urged that the appropriate remedy available to the Petitioner is to approach the jurisdictional Magistrate or the competent Criminal Court seeking release of the property or de-freezing of the bank account in accordance with the procedure contemplated under the Bharatiya Nagarik Suraksha Sanhita, 2023. (vii) It is, accordingly, submitted that recourse to the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution for directing de-freezing of the account is not warranted, particularly when an efficacious statutory remedy lies before the jurisdictional Magistrate or competent Criminal Court and the investigation is admittedly in progress. It is further contended that the Petitioner’s allegation that the freezing of the account is unlawful or mechanical is wholly misconceived. The restraint has been imposed pursuant to a complaint registered before the Cyber Crime Police Station, Thiruvananthapuram, Kerala, and in exercise of statutory powers by the investigating agency. (viii) The Bank has merely acted in compliance with the directions issued by the police authority and has not independently initiated any such action. Therefore, the freezing of the Petitioner’s account is neither arbitrary nor at the instance of the Opposite Party Bank, but is a consequence of lawful investigative measures undertaken by the competent police authority. (viii) The Bank has merely acted in compliance with the directions issued by the police authority and has not independently initiated any such action. Therefore, the freezing of the Petitioner’s account is neither arbitrary nor at the instance of the Opposite Party Bank, but is a consequence of lawful investigative measures undertaken by the competent police authority. In Criminal cases, no show cause is required to be given and the principle of natural justice will be followed during the trial, when the petitioner can put-forth its plea or points to get its account de-freezed. The action of the Bank is not at all arbitrary, violative of natural justice or without any procedural sanctity as alleged. (ix) It is contended that the freezing of the Petitioner’s current account pursuant to directions issued under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023, cannot be termed illegal per se. The legality, propriety, or continuation of such freezing falls within the domain of the jurisdictional Magistrate or the competent Criminal Court before whom the investigation is reportable, and not within the ambit of the writ jurisdiction of this Court at the first instance. (x) It is further submitted that the Opposite Party Bank, namely State Bank of India, has not acted in excess of its authority or exercised any independent discretion in freezing the account. The Bank has merely complied with the directions issued by the competent Police Authority in the course of investigation, and such compliance is in accordance with law. The affidavit given by one Amit Bajubandho being one of the customer of the petitioner, that the transaction between the said person and the petitioner is purely business related and legitimate transaction, the said affidavit or affirmation or declaration given by the said person can only be tested before the trial court to find out the truth, so, it may not be decided through a writ petition. (xi) In view of the aforesaid submissions, it is contended that the Writ Petition filed by the petitioner lacks merit. Hence, the same may be dismissed. IV. EXAMINATION OF THE LEGAL MATRIX: 6. Heard learned counsel for the parties and perused the materials placed on record. (i) It is true that ordinarily when a statutory remedy is available, this Court would be slow in exercising its writ jurisdiction. Hence, the same may be dismissed. IV. EXAMINATION OF THE LEGAL MATRIX: 6. Heard learned counsel for the parties and perused the materials placed on record. (i) It is true that ordinarily when a statutory remedy is available, this Court would be slow in exercising its writ jurisdiction. However, the existence of an alternative remedy is not an absolute bar where the impugned action is alleged to be wholly without jurisdiction, violative of fundamental rights, or manifestly arbitrary. (ii) The freezing of a bank account directly affects the right to carry on trade and business under Article 19(1)(g) and has civil consequences. Therefore, this Court is competent to examine whether the action meets the constitutional threshold of reasonableness and proportionality. (iii) It is also equally important to note that Section 106 of the BNSS empowers a police officer to seize property suspected to be connected with an offence. The power to direct freezing of a bank account is traceable to such provision. Therefore, the mere act of freezing an account during investigation cannot be said to be illegal per se. However, statutory power must be exercised in a manner that is fair, proportionate and not excessive. The authority must demonstrate a rational nexus between the property frozen and the alleged offence. (iv) The core grievance of the Petitioner is that the account has been frozen without quantifying the alleged “tainted amount.” It is not in dispute that the Petitioner is an LPG distributor operating under the name M/s Sairam Bharat Gas under the aegis of Bharat Petroleum Corporation Limited and that the account is used for day-to-day commercial transactions. (v) While investigation in Crime No. 69/2025 is pending before the Cyber Crime Police Station, Thiruvananthapuram, the record does not indicate that the alleged fraudulent amount has been specifically identified and/or segregated. The freezing of an entire operational current account of a running business, without limiting the restraint to the suspected amount, prima facie appears to be disproportionate. (vi) The Delhi High Court in Neelkanth Pharma Logistics Pvt. Ltd (supra) and in Pawan Kumar Rai(supra) has emphasized that blanket freezing of accounts, when the disputed amount is ascertainable, is excessive and violative of constitutional protections. The Kerala High Court in Dr. Sajir v. Reserve Bank of India (supra) has also underscored that investigative measures must adhere to proportionality. (vi) The Delhi High Court in Neelkanth Pharma Logistics Pvt. Ltd (supra) and in Pawan Kumar Rai(supra) has emphasized that blanket freezing of accounts, when the disputed amount is ascertainable, is excessive and violative of constitutional protections. The Kerala High Court in Dr. Sajir v. Reserve Bank of India (supra) has also underscored that investigative measures must adhere to proportionality. (vii) Further, the Constitution Bench in Olga Tellis v. Bombay Municipal Corporation (supra) recognized that the right to livelihood forms an integral facet of Article 21 and in the present case, it does not affect the right to life. Freezing a business account effectively disabling lawful operations must therefore satisfy strict standards of reasonableness (viii) As regards the role of State Bank of India, the Bank has merely acted in compliance with the communication issued by the Cyber Crime Police Station. There is no material to show independent arbitrariness on its part. The Bank cannot unilaterally lift the freeze without appropriate orders once a lawful investigative direction is received. (ix) It is correct that the Petitioner has the liberty to approach the jurisdictional Magistrate seeking appropriate relief under the BNSS. However, relegating the Petitioner to such remedy without examining the proportionality of the impugned action would defeat the constitutional safeguards available under Article 226, especially where fundamental rights are implicated. (x) The writ jurisdiction is discretionary and equitable. The Court must strike a balance between safeguarding investigation and protecting constitutional freedoms. 7. In view of the foregoing analysis, this Court holds that the power of the police to freeze the account under Section 106 BNSS cannot be declared illegal per se. However, freezing the entire current account of a running LPG distributorship business, without identification or quantification of the alleged suspect amount, is disproportionate. The investigative interest can be adequately protected by marking a lien over the specific amount suspected to be connected with the offence. The Cyber Crime Police Station, Thiruvananthapuram, shall within a period of two weeks quantify and communicate the specific amount alleged to be tainted. 8. State Bank of India, Paralakhemundi Branch, shall mark lien to the extent of such quantified amount. 9. Upon such lien being marked, the remaining balance in the Petitioner’s Current Account No.00000034083697729 shall be permitted to be operated by the Petitioner for lawful business purposes. 10. 8. State Bank of India, Paralakhemundi Branch, shall mark lien to the extent of such quantified amount. 9. Upon such lien being marked, the remaining balance in the Petitioner’s Current Account No.00000034083697729 shall be permitted to be operated by the Petitioner for lawful business purposes. 10. The Petitioner shall maintain proper accounts and shall not withdraw or transfer the lien-marked amount without leave of the jurisdictional Court. 11. It is clarified that this order shall not prejudice the ongoing investigation or trial in Crime No.69/2025 and that the investigating agency shall be at liberty to proceed in accordance with law. 12. In light of the frequent filing of such matters concerning blanket freezing of the accounts, this Court feels that Ministry of Home Affairs, Government of India should take proactive steps to address the same. It may consider consulting all concerned stakeholders, including respective States/UTs and then, with consensus of everyone, to chalk-out a uniform policy, standard operating procedures and guidelines to ensure that such matters are handled with requisite consideration and compassion. The aim should be to balance the rights of a complainant in any such criminal investigation vis-a-vis the right of innocent and unwary account- holder, made to face unwarranted hardship on account of blanket freezing of account, despite being completely innocent and unaware of commission of any crime. 13. The Writ Petition is, thus, disposed of in the above terms. No order as to costs. 14. Interim order, if any, passed earlier stands vacated.