The Allahabad High Court held that an advocate’s bank account cannot be fully frozen merely because it receives client funds or shows suspicious transactions. The Court ruled that professional fees paid to a lawyer cannot be treated as “proceeds of crime.”
The Allahabad High Court, constituted by a bench of Justice J.J. Munir and Justice Arun Kumar, has held that an advocate’s bank account cannot be fully frozen merely due to suspicious transactions or because the account receives client money as professional fees.
The Court clarified that professional remuneration paid to a lawyer does not amount to proceeds of crime.
The ruling came in a case concerning the freezing of an advocate’s account by the Uttar Pradesh Police Cyber Cell.
The Court directed the Additional Chief Secretary (Home), Uttar Pradesh, to submit a personal affidavit detailing how police action in matters involving advocates’ bank accounts would be regulated. The purpose is to ensure that such action does not interfere with the administration of justice.
The dispute began when the Branch Manager of State Bank of India, Krishna Nagar Branch, Kanpur reported that the petitioner’s account had been frozen by the Cyber Cell of the Uttar Pradesh Police following allegations of fraudulent activity. The petitioner, Ayush Bajpai, is a practising advocate.
The Court noted that the account showed only modest credits, including a sum of Rs. 20,000 on March 18, 2026, and three separate credits of Rs. 3,700 one on April 23, 2026 and two others on the same date. The total balance standing in the account was Rs. 1,03,071.
The petitioner was represented by counsels Archit Mishra and Saurabh Chaturvedi. The respondents including the State of Uttar Pradesh and two others were represented by the Standing Counsel, who accepted notice on behalf of respondents 1 and 3.
The High Court first examined the extent of the Cyber Cell’s power to freeze bank accounts. Relying on two earlier Division Bench decisions Khalsa Medical Store through Prop.
Yashwant Singh Vs. Reserve Bank of India through Governor and 3 others (2026:AHC-LKO:3701-DB) and Marufa Begum Vs. Union of India and 5 others (2025:AHC:190289-DB) the bench reiterated the principle that,
“on account of a fraudulent transaction the Cyber Cell cannot freeze the entire Bank Account except that which is the proceeds of suspicious transaction or a crime.”
The Court then considered the petitioner’s professional status as an advocate.
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Observing that advocates are entitled to receive professional fees from their clients irrespective of the clients’ background, the bench held,
“An Advocate could be defending an accused who is indeed involved in a big scam or fraud but when fee is remitted by such an accused to his learned Counsel in account the money cannot be said to be proceeds of crime. It is the lawful remuneration of the learned counsel which would be duly earned after the engagement is discharged.”
The Court also expressed concern that freezing advocates’ accounts could have a chilling effect on the legal profession and the functioning of the justice system, stating,
“If for the remittance of any sum of money, an Advocate’s account is frozen describing it as a cyber fraud or the money as proceeds of a cyber fraud or other crime it could become very difficult for Advocates to discharge their professional duties under the Advocates Act. The functioning of the Court itself would be embarrassed.”