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khushi Yadavkhushi Yadav 

I should not be able to create the contact if the "Active" field of the account is "NO". Look Up ( User should not be able to see the those accounts on the lookup )

Arunkumar GnasekaranArunkumar Gnasekaran
put the  lookup filter on account lookup field in contact object

Account lookup filter on contact object

please mark this as  best answer if it is resolve your issue