01 / ANALYSIS
Overview of the Case
The Islamabad High Court held that BankIslami Pakistan Limited had unjustifiably blocked Muhammad Usman's account without any freezing direction from the National Cyber Crime Investigation Agency. The court nevertheless ordered the bank to pay Rs300,000 in litigation costs within one month and emphasised the requirement of lawful authority before restraining access to deposited funds.
02 / ANALYSIS
Brief Facts
Muhammad Usman maintained an account with BankIslami Pakistan Limited. The National Cyber Crime Investigation Agency registered Inquiry No. 1283 of 2024 following a complaint by Shakil Adnan Malik concerning alleged financial fraud connected with another individual, Mohammad Omar. Investigators emailed the bank seeking account records concerning that individual and family members. The bank placed a debit block on Muhammad Usman's account despite receiving no instruction to freeze it. In its report to the Islamabad High Court, the bank acknowledged that the block was applied in error as a precaution. The agency also confirmed that it had not requested any freeze. The bank removed the restriction during the hearing of W.P. No. 1553 of 2026. Usman sought relief and submitted a litigation-cost affidavit for Rs300,000.
03 / ANALYSIS
Questions of Law
- May a bank impose a debit block merely as a precaution when an investigating agency asks for information but gives no lawful account-freezing direction?
- Can the court grant redress after the bank removes the block during litigation?
04 / ANALYSIS
The Court's Answers
May a bank impose a debit block merely as a precaution when an investigating agency asks for information but gives no lawful account-freezing direction?
Answer. No. Deposits constitute property protected by Articles 23 and 24 of the Constitution, and banks must verify that a restriction has a legal basis. A record-production request is not itself an authorisation to freeze an unrelated customer account.
“A restriction upon operation of a citizen’s bank account cannot be founded merely upon internal apprehensions, administrative caution or speculative concerns.”
Can the court grant redress after the bank removes the block during litigation?
Answer. Yes. Although no further unfreezing direction was needed, the court ordered the bank to pay the petitioner's proved Rs300,000 litigation costs within one month. It also called upon SBP to examine whether circulars or guidance were appropriate to avoid unsupported account restrictions.
“The said amount shall be paid to the petitioner by the respondent Bank within a period of one month from the date of this judgment”
05 / ANALYSIS
Practical Relevance
Banks, fintechs and financial-investigation teams should distinguish requests for information from directions restraining assets, document the statutory power relied upon, check identity and scope, and provide a rapid process to correct mistaken holds. Costs exposure may remain after an erroneous restriction is lifted.