Is it possible to mention height restriction in a specific area on the PCB

Yes, add a Shape to Package Keepout, Top / Bottom. Then use Edit>Object Properties, select the Shape then select and set Package Height Min property. DRCs will be generated where Place Bound, Package Height Max exceeds Package Keepout Min.

Sounds bit confusing. If the package keepout is drawn, how will the component placement happen in the area ?

Hi Jordan,

It sounds confusing but does work if you think about the Z-Plane. Normally when you draw shapes they default to a z-plane of of zero, like the top etch of the board. But since shapes can have a minimum and maximum height  depending on the class used like placebound top or package keepout etc it becomes possible then to shift the z-plane in height.

Here is a pic. Area in blue is the Place-bound top with max height set. Area in green is the package keepout top but it's minimum height is set above what the package height is. One on the far right shows keepout drawn without properties attached and as expected a drc is produced.

All the best.