Harsh Batu vs. Au Small Finance Bank

Held

The Court held that the decisions in Malcolm Murayis & Ors. Vs. State Bank of India and Others and Archana Vs. The State of Madhya Pradesh and Others were applicable mutatis mutandis to the present case. The Court directed that the disputed amounts of Rs. 2,275/- and Rs. 9,500/- be kept in Fixed Deposits (FDs). If further complaints were received by the bank regarding other entries, the bank was permitted to take appropriate action in accordance with law, keeping in mind the SOP issued by the Government as discussed in the Archana case. The disputed amounts were to be liquidated only after orders were passed by the competent Judicial Magistrate within three months. If the police agency failed to proceed in accordance with law within this period, the amount kept in FD could be withdrawn by the petitioner under intimation to the police agency. The Court further directed that the petitioner's bank account be unfrozen and the petitioner be permitted to operate it. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Harsh Batu, filed a writ petition seeking the removal of a hold/freeze on his bank account with AU Small Finance Bank. The disputed amount was Rs. 2,275/- and Rs. 9,500/-. The petitioner argued that his case was covered by previous High Court judgments, specifically Malcolm Murayis & Ors. Vs. State Bank of India and Others. The judgment also references a Standard Operating Procedure (SOP) framed by the Government for banks concerning accounts frozen due to cybercrime allegations, as discussed in the case of Archana Vs. The State of Madhya Pradesh and Others. The core issue was the freezing of bank accounts based on intimations from cyber cells, often without prior notice to the account holder.

Key Issues

1. Whether the High Court can direct the removal of a hold/freeze on a bank account when the freeze was imposed based on intimations from cyber cells, and if so, under what conditions? (Article 226 of the Constitution of India, Section 102 of Cr.P.C., Standard Operating Procedure dated 10.04.2026). Petitioner's Contention: The petitioner contended that the freeze on his bank account was illegal and arbitrary. He relied on the High Court's decision in Malcolm Murayis & Ors. Vs. State Bank of India and Others, arguing that his case was squarely covered by this precedent. He sought directions for the removal of the hold and the release of the disputed amount. Revenue/State's Contention: The judgment does not explicitly record arguments from the revenue or state. However, it references the actions of cyber cells and police authorities in requesting banks to freeze accounts, implying their role in the freezing process. The judgment also notes the banks' submission that they acted on instructions from investigating authorities.