What began as a routine digital sale quietly turned into a prolonged financial crisis for a small nursery owner in Faridabad, highlighting a serious gap in how cyber fraud investigations affect innocent citizens.
A single UPI payment of ₹150 was enough to freeze the nursery owner’s bank account for over 1 year, even though no allegation or complaint was made against him. The account was restored only after he approached the High Court, which ruled that bank accounts cannot be frozen without an order from a jurisdictional magistrate.
The issue started in November 2024, when the nursery owner sold a plant and a flower pot to an unknown customer. The customer paid ₹150 via UPI and left. A few days later, the nursery owner discovered that his bank account had been blocked. Bank officials later told him that the amount credited to his account was allegedly linked to a cyber fraud case registered at Chandrapur police station in Chhattisgarh.
Under existing cybercrime procedures, all bank accounts through which fraudulent money passes are frozen to stop further movement of funds. This includes accounts of people who unknowingly receive such money during genuine business transactions.
The nursery owner said he had no way of knowing the source of the UPI payment. Like many small traders, he had no system to verify payments at the point of sale. Despite repeated visits to local police and cybercrime offices, the account remained frozen.
The freeze blocked access to more than ₹1 lakh in his account, disrupting both his business and personal expenses. With no relief, he moved the High Court in January 2025 through his counsel.
After hearing the case, the court ordered the immediate unfreezing of the account. It clearly stated that freezing a bank account without prior approval from the area magistrate is not legally valid. The observation is being seen as a key safeguard for innocent account holders caught in cybercrime probes.
Cybercrime officials admit the problem is widespread. Hundreds of complaints are received every month from small shopkeepers whose accounts are frozen after routine UPI transactions. Many are forced to travel across districts or states to reach the police station handling the original case.
In October 2025, a cyber fraud involving ₹4.43 crore led to nearly 36,000 bank accounts being frozen across several states. Most account holders later turned out to be unaware recipients. In another case, a Mumbai garment shop owner lost access to his account after receiving ₹2,000 via UPI.
Officials say freezes are triggered when victims report fraud through the national cybercrime helpline 1930, prompting the Ministry of Home Affairs to trace and block all linked accounts. While meant to protect victims, the process often harms legitimate businesses.
Legal experts say the ruling could help thousands of traders, but warn that clearer rules are urgently needed to protect trust in digital payments.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
