Gujarat High Court orders Axis Bank to unfreeze account, keep lien of Rs 18,413 only

The Gujarat High Court on 16 October 2026 directed Axis Bank and the investigating authority to defreeze the current account of a firm that had been frozen after a cyber crime complaint. The court allowed the bank to keep a lien, or hold, only on Rs 18,413.95 until the investigation ends.

What Happened

According to the order, the firm sold gold in November 2024 and in December 2024 received an email from Axis Bank saying a lien of Rs 7,96,810 had been marked on its account, along with a cyber crime complaint dated 30 November 2024. The firm told the court it gave the police its GST invoices as proof of sale. In August 2025, Rs 7,96,810 was debited from the account, and the bank later said this followed a judicial order. In a letter of 28 July 2026, the bank stated that the remaining lien was Rs 18,413.95 and that the account had been under freeze since 21 August 2025.

The respondents did not appear in court despite being served. The court said investigating agencies may ask banks to freeze accounts during an investigation, but an account cannot be frozen perpetually without telling the holder why and to what extent. It held that freezing an entire account without quantifying the amount and the period violates the citizen's fundamental right to trade, business and livelihood, and undermines the right to live with dignity under Article 21 of the Constitution. The court allowed the firm to operate its account fully, except for the lien amount, and disposed of the petition with no order as to costs.

What It Means

Account holders whose entire account is frozen over a cyber crime complaint may find this ruling relevant: the court held that a freeze should be limited to the disputed amount and should not run indefinitely without intimation. The order also notes that continued freezing without showing that the holder is an accused, an accomplice or a knowing recipient of illegal funds cannot be sustained. Customers with complaints about how a bank handled their account can approach the bank first and then the RBI at https://cms.rbi.org.in. Victims of cyber fraud can report at https://cybercrime.gov.in or call 1930.

Source: High Court judgment