M/S. Osiz Technologies Private LTD vs. The Cyber Crime Station

Facts

M/s. Osiz Technologies Private Ltd. (Petitioner) filed a writ petition seeking a direction to unfreeze its bank accounts. The Petitioner's accounts were frozen by Respondent No. 2 (Karur Vysya Bank) and Respondent No. 3 (Axis Bank) based on an email from Respondent No. 1 (Cyber Crime Station). The Petitioner contended that this action was illegal and violated their fundamental rights. Subsequently, Respondent No. 1 issued a revised email on May 16, 2023, directing the banks to de-freeze the accounts. However, the banks had not yet complied with this revised instruction. The Petitioner sought an order to compel Respondents No. 2 and 3 to de-freeze the accounts as per the revised communication.

Held

The Court held that the writ petition could be disposed of by directing Respondent Nos. 2 and 3 to consider the revised email proceedings/letter issued by Respondent No. 1 on May 16, 2023. The Court reasoned that since Respondent No. 1 had already issued instructions to de-freeze the accounts, the banks should act accordingly and pass appropriate orders in accordance with the law. The Court did not delve into the legality of the initial freezing or the specific provisions of GST law that might have been invoked, as the matter was resolved based on the subsequent communication from the Cyber Crime Station. The ratio decidendi is that banks must act promptly on revised official communications directing the de-freezing of accounts, especially when such communications supersede earlier directives. The operative direction was to dispose of the writ petition with the observation that Respondent Nos. 2 and 3 should consider the revised email and act accordingly.

Key Issues

1. Whether the action of Respondent No. 1 in sending an email to the respondent bank authorities, leading to the freezing of the petitioner's bank accounts, was illegal, arbitrary, and in breach of the petitioner's fundamental rights under Articles 14, 19, and 21 of the Constitution of India? 2. Whether Respondent Nos. 2 and 3 are bound to act upon the revised email proceedings/letter issued by Respondent No. 1 on May 16, 2023, to de-freeze the petitioner's accounts? Petitioner's Contentions: The Petitioner argued that the initial freezing of their accounts was illegal and violated their fundamental rights. They further contended that Respondent Nos. 2 and 3 ought to comply with the subsequent revised email from Respondent No. 1 dated May 16, 2023, which directed the de-freezing of the accounts, enabling the Petitioner to operate their accounts and pay salaries to employees. The Petitioner relied on the principles of natural justice and their constitutional rights. Revenue/State's Contentions: The learned Government Pleader for Home, appearing for Respondent Nos. 1 and 5, contended that Respondent No. 1 had indeed issued revised email proceedings on May 16, 2023, to Respondent Nos. 2 and 3, directing them to de-freeze the petitioner's accounts.