De-freeze film producers’ bank accounts, keep ₹30 crore under freeze; blanket freeze violates Article 21: Raj HC

Jodhpur: The Rajasthan High Court on 19 March 2026 directed that the bank accounts of two Mumbai-based film professionals be de-frozen to the extent beyond the ₹30 crore disputed amount, holding that a police investigating agency cannot impose a blanket freeze on the entirety of a person’s accounts when only a specific quantified sum is alleged to be tainted. Justice Farjand Ali, sitting as a single bench, found that such omnibus freezing — without establishing a nexus between the individual accounts and the alleged offence — was neither justified nor proportionate, and constituted a grave infringement of fundamental rights under Articles 21 and 19(1)(g) of the Constitution.

Shwetambari Vikram Bhatt and her husband Vikram Praveen Bhatt, both film professionals residing in Andheri West, Mumbai, had entered into a business arrangement with a complainant for the production of multiple films through an LLP — BSB LLP — in which the complainant retained dominant financial control. A Term Sheet dated 24 May 2024 fixed a total budget of ₹40 crores (₹15 crores for a biopic and ₹25 crores for another film). An additional ₹7 crores was subsequently sought for four films within a revised budget of ₹47 crores, with projected profits of ₹100–200 crores. The complainant made total payments of approximately ₹44.28 crores to various vendors as directed. Of the four films, only one was released; the second was partially completed; the third was 25 per cent complete; and the fourth had not been commenced.

The complainant registered FIR No. 213/2025 at Police Station Bhupalpura, Udaipur, alleging that Vikram Bhatt, Shwetambari Bhatt, Dinesh Kataria and others had conspired to siphon funds by raising inflated and fabricated vendor bills, misrepresenting expenses, and diverting money through associated entities — thereby misappropriating approximately ₹30 crores. Offences of cheating, criminal breach of trust, and conspiracy were alleged. During the investigation, the Investigating Officer, Dy. S.P. Chhagan Purohit, communicated with HDFC Bank and IDFC First Bank, directing them to freeze and thereafter block the savings bank accounts of the petitioners — including accounts not directly connected to the alleged transactions. The petitioners filed connected writ petitions (S.B. Criminal Writ Petition No. 1081/2026 and 1082/2026) before the Rajasthan High Court at Jodhpur, seeking directions to de-freeze their accounts.

Counsel for the petitioners, Mr. Mrigraj Singh Rathore and Mr. Manvendra KS Bhati, submitted that the amounts received by the petitioners were legitimate professional fees duly accounted for, and that the investigating agency had acted without adherence to due process by freezing accounts that had no nexus with the alleged disputed transactions. It was contended that the blanket freezing had caused severe financial hardship, impairing the petitioners’ ability to meet household expenses, service loans, pay employee salaries, and attend to basic sustenance. Counsel urged that any freezing order must be strictly proportionate to the allegedly tainted sum, and that an omnibus direction without identifying a direct connection between specific accounts and the offence was manifestly arbitrary and violative of fundamental rights.

Counsel for the State, Mr. N.S. Chandawat (Deputy Government Advocate), supported the investigating agency’s action, relying on the statutory framework that empowers the police to request banks to freeze accounts during the pendency of investigation. Counsel for HDFC Bank, Mr. Arpit Mehta, was also heard on behalf of the respondent-bank.

Justice Farjand Ali acknowledged that the statutory framework does empower the investigating agency to request banks to freeze accounts during the pendency of investigation, but emphasised that such power is “neither unfettered nor capable of being exercised in an unbridled or mechanical manner.” The Court held that the authority to interdict the operation of a bank account is “an extraordinary measure, which must be invoked sparingly, with due circumspection, and strictly in consonance with the safeguards enshrined under law.” Any freezing order, the Court held, cannot be permitted to continue without apprising the account holder of the reasons, the nature of allegations, the extent of freezing, and its duration — failing which it would “offend the principles of natural justice” and result in “manifest arbitrariness.”

The Court further held that freezing a citizen’s bank account without cogent reasons, and without establishing even a prima facie nexus between the account and the cognizable offence, amounts to a “grave, unwarranted and excessive intrusion into the sacrosanct fundamental rights guaranteed under the Constitution.” Invoking the Supreme Court’s ruling in Maneka Gandhi v. Union of India (1978 AIR 597) — which held that any procedure depriving a person of life or liberty must be just, fair and reasonable — Justice Farjand Ali held that the power to freeze a bank account, being drastic in nature, must be exercised only upon recording reasons which demonstrate “a live, proximate and direct nexus between the account sought to be frozen and the alleged criminal activity.” He further held that such blanket freezing also directly impinges upon the freedom to carry on trade, occupation and business guaranteed under Article 19(1)(g).

A bank account is not a mere repository of money but the very bloodstream of an individual’s economic existence. To freeze the entire account without justification is akin to throttling the financial breath of a person, leaving them in a state of helplessness and undue hardship, which the law neither contemplates nor countenances.

On the facts, the Court noted that while only ₹30 crores had been identified as the disputed amount, the Banks had proceeded on the basis of a “blanket and sweeping direction” to freeze the petitioners’ accounts in their entirety — rendering them completely unable to access their own funds, meet household obligations, pay salaries, service loans, or attend to medical and educational expenses. This, the Court found, was a disproportionate exercise of power that the law did not sanction.

The Court directed that the ₹30 crores identified by the investigating agency as the disputed amount shall continue to remain under freeze. However, the petitioners were permitted to operate their bank accounts freely for all other lawful transactions. The respondent-Banks were directed to ensure that only debit operations to the extent of the disputed amount remain interdicted, with the accounts otherwise remaining fully operational. Four specific accounts — two HDFC Bank accounts and one IDFC First Bank account of Shwetambari Bhatt, and one HDFC Bank account of Vikram Bhatt — were directed to be de-frozen subject to this limitation. The SHO concerned was directed to forthwith communicate the order to the concerned bank authorities and ensure prompt compliance. Both writ petitions and all pending applications stood disposed of accordingly.

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