You try to pay a bill and the bank declines it. The branch says your account has been frozen “on the instructions of the cyber police”, often from a police station in another state, and that it can do nothing more. This happens to thousands of people in Mumbai: shopkeepers paid by UPI, freelancers, people who sold something online, or anyone who received money that, several transfers earlier, came from a fraud. This guide explains what the law in Maharashtra now says and what to do, in order.
Key facts
- Lien vs freeze
- A lien blocks only a stated amount. A debit freeze blocks the whole account
- Bombay High Court
- Police cannot debit-freeze an account under Section 106 BNSS; that needs a Magistrate’s order under Section 107 (November 2025)
- Banks
- May mark a lien on the disputed amount only, unless a competent authority orders more
- Grievance route
- MHA procedure of January 2026: the bank forwards your grievance within 7 days, then the investigating officer, district and state grievance officers
- Lost money to fraud yourself
- Call 1930 or report at cybercrime.gov.in
Why accounts get frozen
When a fraud victim reports a loss on 1930 or the National Cyber Crime Reporting Portal, the money is traced from account to account through the Citizen Financial Cyber Frauds Reporting and Management System (CFCFRMS), which links police and banks. Every account the money passed through can be flagged, even five or ten transfers later, and even if the holder knew nothing about the fraud. A police notice then goes to the bank, usually citing Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, which replaced Section 102 of the old Criminal Procedure Code.
Most people affected are not accused of anything. They simply received money that was traced back to a complaint.
What the courts have said
Bombay High Court: no debit freeze under Section 106
In Kartik Yogeshwar Chatur v. Union of India, decided on 20 November 2025 by the Nagpur Bench (Justices Anil L. Pansare and Raj D. Wakode), the Bombay High Court held that an investigating agency has no power to attach or debit-freeze a bank account under Section 106 BNSS. Section 106 is a power to seize, for example as evidence. Freezing an account so that the money is held back for the victim is an attachment, which falls under Section 107 BNSS and needs an order from a Magistrate. The court quashed the freeze orders, noted that banks may only mark a lien on the disputed amount unless a competent authority specifically orders otherwise, and left the account holders free to claim compensation.
Because this is a judgment of the Bombay High Court, it binds police and courts in Maharashtra.
Allahabad High Court: lien only for the disputed amount
The Allahabad High Court has taken a similar line. In January 2026 (Khalsa Medical Store v. Reserve Bank of India) it held that a blanket freeze of an entire account is impermissible: the police must state the specific amount suspected to be proceeds of crime and seek a lien only for that amount. In August 2026 (Ritesh Yadav v. Reserve Bank of India) it ordered a bank to unfreeze an account and keep a lien of only the disputed Rs 36,000, and directed banks to display the Home Ministry grievance procedure at branches and online.
Karnataka High Court: a different view
In August 2026 the Karnataka High Court held that police can debit-freeze accounts under Section 106 BNSS without a prior court order, provided they report it to the Magistrate. High Courts therefore disagree, and the question may eventually reach the Supreme Court. In Maharashtra, the Bombay High Court’s view applies. If your account was frozen by police in another state, the courts of that state may follow their own High Court.
What to do, step by step
- Ask the bank in writing. Request the name of the police station or agency, the complaint or acknowledgement number, the date of the notice, and whether it is a lien on a stated amount or a freeze of the whole account. Keep a copy of your letter or email.
- Contact the investigating officer. Explain the transaction and send proof: invoices, the order or chat with the buyer, your UPI or bank statement, and identity documents. Many liens are lifted once the officer is satisfied you were a genuine recipient.
- Use the grievance procedure. Under the Home Ministry’s standard operating procedure of January 2026, you approach your bank; after its due-diligence checks, the bank submits your grievance through the CFCFRMS grievance module within seven calendar days. It then goes to the investigating officer, the District Grievance Officer and, on appeal, the State Grievance Officer.
- Apply to the Magistrate. Where the lien or freeze continues, an application can be made to the Magistrate who has jurisdiction over the case, asking for release of the amount or for the freeze to be limited to the disputed sum. This court is often in the state where the complaint was filed.
- Writ petition in the High Court. If the whole account has been frozen without a Magistrate’s order, or a lien far exceeds the disputed amount, a writ petition under Article 226 of the Constitution is the remedy that succeeded in the Bombay and Allahabad cases.
What not to do
- Do not pay anyone who promises to get the account unfrozen through “contacts”. Release comes only from the investigating officer, the grievance officers or a court.
- Do not ignore a police notice asking you to appear or give documents. If you receive a notice under Section 35 BNSS, read what to do when you get a police notice.
- Do not move the disputed money out of another account or close the account in a hurry. It can look like you are hiding funds.
Documents to keep ready
- Bank statements for the period, with the flagged credit marked
- Invoices, delivery proof, chats or emails with the person who paid you
- Your PAN, Aadhaar and business registration (GST or Gumasta), if any
- Copies of every letter to the bank and the police, with acknowledgements
Frequently asked questions
The bank says it cannot tell me anything. Is that right?
The bank should at least tell you which agency asked for the freeze and how to contact it, so that you can approach the investigating officer. The Allahabad High Court directed banks to display the grievance procedure at branches and online.
Only Rs 5,000 of the money was disputed. Why is my whole account blocked?
Under the Bombay High Court’s judgment, police cannot debit-freeze a whole account under Section 106 BNSS, and banks may only hold the disputed amount under lien unless a competent authority orders otherwise. You can ask the bank and the officer to limit the lien to the disputed sum, and approach the court if they refuse.
The police station is in another state. Do I have to travel there?
Often the first steps, writing to the bank and to the officer and using the grievance procedure, can be done from Mumbai. A court application may have to be filed where the case is registered, while a writ petition can sometimes be filed in the Bombay High Court; which route fits depends on the facts.
I lost money to a fraud. Is this the right page?
No. See online or UPI fraud: what to do in the first hours.
Consultations are by appointment at the chambers in Malwani MHADA, Malad (West). To fix a time, telephone +91 99301 50560 or send a message on WhatsApp.
General information, not legal advice. Court decisions are as reported up to October 2026; the law in this area is changing quickly.