DIGITAL TRANSACTIONS AND DUE PROCESS: A STAND AGAINST UNILATERAL DEBIT FREEZES

Access to banking services today is no longer a luxury—it is a basic necessity, on par with the right to shelter or healthcare.

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Introduction

The ability to deposit, withdraw, remit, and receive funds is essential for meaningful economic participation, social inclusion, and personal freedom. To ensure transparency and accountability, modern banking systems use Unique Transaction Identifiers (UTIs)—alphanumeric codes that track transactions and protect both consumers and institutions. Yet, despite these safeguards, bank accounts are frequently frozen by law enforcement agencies without judicial oversight or adherence to due process. Such arbitrary actions not only disrupt livelihoods but also violate core constitutional protections. Disturbingly, such arbitrary practices have become institutionalised, no longer isolated aberrations but commonplace occurrences.

The recent judgment delivered by the Hon'ble High Court of Kerala in Headstar Global Private Limited Vs State of Kerala reported in 2025 (4) KHC 181 reaffirms critical legal principles: banking rights are intrinsic to the right to life under Article 21 of the Indian Constitution, UTIs serve as irrefutable evidence of lawful transactions, and police authorities cannot freeze third-party accounts without adhering to the procedural safeguards outlined in the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

The right to access banking services is deeply intertwined with the constitutional guarantee of life and personal liberty under Article 21. The Supreme Court time and again have explicitly recognised that the right to livelihood is an integral component of the right to life. Banking services facilitate this livelihood by enabling wage payments, receiving remittances, and accessing credit—essentials for a dignified existence. Internationally, the Universal Declaration of Human Rights (Article 25) and the UN Principles on Identification (2017) reinforce the idea that financial inclusion is a cornerstone of an adequate standard of living.