Bank Account Lien Due to Online Fraud Complaint: Can It Affect Your Salary Account?

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Rohan Gupta, a software professional from Pune, found himself in a deeply unsettling situation in early March 2025. A close acquaintance of his, Priya Verma, had fallen victim to an online investment scam. During the course of the fraud, the scammer had instructed Priya to transfer funds through Rohan's Kotak Mahindra Bank savings account, which he had allowed without fully understanding the implications. Priya promptly filed a cybercrime complaint, and within days, the Pune Cyber Crime Cell placed a lien on Rohan's savings account.

Rohan had just accepted a new position at a Nagpur-based subsidiary of Infosys and was informed that his salary account would be opened with the same Kotak Mahindra Bank branch. Alarmed, he tried approaching the branch manager and then a local general practitioner advocate, neither of whom could give him a clear picture of whether the lien would extend to his new salary account or how to get it lifted. The matter remained unresolved for nearly three weeks.

When Rohan approached Advocate Sudhir Rao, the situation was assessed carefully. A formal representation was drafted to the bank's nodal officer and to the investigating officer, clearly establishing that Rohan was not a beneficiary of the fraud and that the fund transfer had been inadvertent. Simultaneously, a petition was filed before the jurisdictional Magistrate seeking release of the lien. The lien on the savings account was lifted within a reasonable timeframe, and Rohan was clearly advised on the legal position regarding his proposed salary account. The specialised handling, which required understanding both banking law and criminal procedure simultaneously, made a material difference to how quickly the matter moved.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Contact the Bank's Nodal Officer in Writing: Don't rely on verbal conversations with the branch manager. Submit a written representation to the bank's nodal officer explaining your position, attaching all transaction records, and specifically asking whether the lien will extend to any new account opened with the same bank. A written trail matters enormously if the matter escalates.

Cooperate Fully with the Investigation: Give your statement to the investigating officer voluntarily and promptly. Establish clearly that you were not a knowing participant in the fraud. Courts and banks both respond more favourably when a lien-holder demonstrates transparency early — and frankly, delay here only makes you look worse.

Seek a Court Order for Lien Release: If the bank and investigator don't act quickly, a Magistrate can direct the release of the lien once your innocence as a conduit (not a beneficiary) is established. This step requires an advocate who regularly handles cybercrime and banking law intersections, because procedural and evidentiary nuances in such matters are frequently missed by general practitioners unfamiliar with this domain.

Applicable Sections of Law

This case sits at the intersection of criminal law (cybercrime complaint triggering the lien) and civil banking law (the lien's effect on accounts). The following provisions are directly relevant:

• Section 4 and Section 5, Banking Regulation Act, 1949: Govern the rights and obligations of banks with respect to customer accounts, including the bank's general lien over deposits.
• Section 102, Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023: Empowers police to seize or attach property, including bank accounts, during investigation of a cognizable offence.
• Section 317, Bharatiya Nyaya Sanhita (BNS), 2023: Covers cheating by personation, which is frequently invoked in online fraud cases where funds pass through third-party accounts.
• Section 66C and Section 66D, Information Technology Act, 2000: Specifically deal with identity theft and cheating by personation using computer resources, both of which are applicable in online scam scenarios.

Now, before you act, understand something. These provisions don't automatically make you an accused just because money moved through your account. The question is always whether you had criminal intent. That distinction is what a good lawyer will hammer home from day one.

Jurisdiction — Where to File the Case

For the criminal aspect (the underlying fraud complaint), jurisdiction lies with the Cyber Crime Police Station or the jurisdictional police station in the city where the fraudulent transaction originated or where the victim is located. In cases involving online fraud, Section 180 BNSS permits the complaint to be filed at the place where the victim received the fraudulent communication.

For seeking release of the account lien through a court order, the petition is filed before the Chief Judicial Magistrate (CJM) or Judicial Magistrate First Class (JMFC) having territorial jurisdiction over the location of the concerned bank branch. Jurisdiction matters. A wrong forum can cause significant and avoidable delays, and I've seen cases drag for months simply because someone filed in the wrong court.

What if Police Refuse to File FIR?

It happens. Here are your options:

• Approach the Superintendent of Police (SP) or Deputy Commissioner of Police (DCP) with a written complaint under Section 173(4) BNSS, requesting registration and proper investigation.
• File a private complaint directly before the Judicial Magistrate under Section 175(3) BNSS, setting out the facts and seeking appropriate directions to the police.
• File a writ petition before the High Court under Article 226 of the Constitution if both the above remedies fail and there is a clear violation of your fundamental rights or legal rights.
• Send a written representation to the State Cyber Crime Helpline (1930) documenting your grievance and keeping a copy for record.

Rights of the Accused

If you're being treated as a suspect in the underlying fraud case (even inadvertently), your rights are clearly protected. And here's the thing — most people in Rohan's position don't even know these rights exist until it's too late:

• Right against self-incrimination: Under Article 20(3) of the Constitution, you cannot be compelled to be a witness against yourself. As affirmed in Selvi v. State of Karnataka, 2010, this right is absolute.
• Right to legal representation: Article 22 of the Constitution guarantees you the right to consult and be defended by an advocate of your choice from the moment of arrest.
• Right to be produced before a Magistrate within 24 hours: Section 58 BNSS mandates this without exception.
• Right to know grounds of arrest: Section 47 BNSS requires police to inform you of the grounds for arrest.
• Right to a copy of the FIR: Under Section 173 BNSS, you are entitled to a free copy of the FIR once registered.

Bail Provisions

Online fraud cases under the IT Act and BNS can be non-bailable depending on the specific offence and quantum involved. Here's the practical picture:

• Offences under Section 66C and 66D IT Act are bailable and triable by a Magistrate, which makes bail relatively accessible.
• However, if Section 317 BNS (cheating) is invoked with aggravating circumstances, bail may require a sessions-level application.
• Anticipatory bail under Section 482 BNSS is advisable the moment you anticipate arrest, and should be filed promptly.
• Regular bail under Section 480 or Section 483 BNSS can be sought after arrest before the Magistrate or Sessions Court respectively.
• Typical bail conditions include surrendering your passport, not leaving the jurisdiction without permission, and appearing before the investigating officer as directed.

Quashing of FIR / Case

If an FIR names you as an accused despite clear evidence that you were merely an unknowing conduit, quashing is a viable remedy. Under Section 528 BNSS, the High Court exercises inherent powers to quash proceedings to prevent abuse of process or where continuance would be an injustice.

Grounds for quashing in a case like this typically include: absence of prima facie criminal intent (mens rea), documentary evidence establishing that you received no benefit from the fraud, and the complainant's own confirmation that your role was inadvertent. As held in State of Haryana v. Bhajan Lal, 1992, the High Court can quash an FIR where the allegations, even taken at face value, do not constitute the offence alleged. Early legal intervention is critical here.

If You Are the Victim

And here's the thing — even if you are the one whose account was placed under lien (not the fraud victim), you are still a victim of circumstances and have actionable remedies:

• File a written representation immediately to the bank's nodal officer requesting details of the lien, the authority under which it was placed, and the procedure for its removal.
• Obtain a certified copy of the FIR or complaint that triggered the lien so your advocate can assess the actual allegations made against your account.
• File a representation before the Investigating Officer, through your advocate, establishing that the funds passed through your account without your knowledge of their fraudulent origin.
• Approach the Magistrate for an interim direction to the bank to keep any new salary account free of any lien derived from the existing investigation order.
• Document all correspondence with the bank, police, and employer in writing. Oral communication is easily denied later.

Documents You Must Keep Ready

• Aadhaar card and PAN card (identity proof)
• Complete bank statements of the savings account under lien, covering the relevant transaction period
• Screenshots, UPI records, and transaction receipts of all payments that passed through your account from the complainant
• Any WhatsApp or email communication between you and the person who asked you to facilitate the transfer
• Your employment offer letter confirming the salary account requirement
• The bank's lien notice or any written communication from the bank regarding the freeze
• A copy of the FIR or cybercrime complaint, if available
• Proof of your residential address (utility bill or rental agreement)

What Evidence Is Required?

• Primary documentary evidence: Bank account statements clearly showing the inflow and outflow of the disputed funds, with no retention or personal benefit to you
• Digital transaction records: UPI transaction IDs, IMPS/NEFT reference numbers, and timestamps that correlate with the complainant's transfers
• Communication evidence: WhatsApp messages, emails, or call records showing the context in which the transfers were requested and facilitated
• Witness statement: A statement from the original fraud victim (Priya Verma in the example) confirming that they requested the transfer through your account
• Bank's lien order: The actual bank communication or court/police order under which the lien was placed
• Negative benefit evidence: Proof that the funds were not retained by you — that they were passed on as instructed

How the Police Behave in Such Cases

Make no mistake — cyber crime cells are under significant pressure to act quickly when fraud complaints come in, and freezing connected accounts is often their first reflex. Police may treat every account that touched the transaction chain as suspect, without immediately distinguishing between the fraudster and an innocent conduit. Getting your statement recorded early, with supporting documents, is therefore critical. Police tend to be more responsive when approached through counsel, and the investigation moves faster when the innocence of the conduit is established through documentary evidence rather than verbal explanations at the police station.

Timeline of Legal Process

• Step 1 — Complaint filed and account frozen: Police receive cybercrime complaint and direct bank to place lien (Day 1 to Day 7)
• Step 2 — Legal representation to bank and police: Your advocate submits formal representations establishing your innocence as a conduit (Week 1 to Week 2)
• Step 3 — Statement recorded by police: You give your statement with documentary support (Week 2 to Week 3)
• Step 4 — Magistrate petition for lien release: If bank and police do not act, petition filed before JMFC (Week 3 to Week 5)
• Step 5 — Magistrate hearing and order: Court hears the matter and may direct release of lien (Week 5 to Week 8)
• Step 6 — Bank compliance: Bank lifts the lien upon receiving court order (within 7 to 14 days of order)
• Step 7 — Ongoing investigation closure: If you are cleared, final report filed by police (3 to 6 months)

How Long Will the Investigation Take?

In cybercrime matters, the investigation timeline under BNSS requires a chargesheet to be filed within 60 days of arrest (or 90 days for serious offences). Where no arrest is made, the investigation can stretch to 3 to 6 months. For an innocent conduit seeking lien release, practical resolution through legal representation typically happens within 4 to 8 weeks, provided the matter is handled promptly and all supporting documents are in order from the outset.

Understanding the Costs

The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.

A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.

Facing a similar matter? Speak to a criminal lawyer in Delhi — Advocate Sudhir Rao appears in bail, trial and appellate matters before the Delhi District Courts, the Delhi High Court and the Supreme Court of India.