Prithviraj Songara vs. Indian Overseas Bank Through Branch Manager

Held

The Court held that the decisions rendered in Malcolm Murayis & Ors. Vs. State Bank of India and Others and Archana Vs. The State of Madhya Pradesh and Others are applicable mutatis mutandis to the present case. Following the principles established in these cases, the Court directed that the disputed amount in the petitioner's bank account be kept in a Fixed Deposit (FD). The Court further stipulated that if any other complaint is received by the bank regarding other entries, the bank may take appropriate action in accordance with law, keeping in mind the Standard Operating Procedure (SOP) issued by the Government as discussed in the Archana case. The disputed amount shall be allowed to be liquidated only after orders are passed by the competent Judicial Magistrate within three months. If the police agency fails to proceed in accordance with law within this period, the amount kept in FD may be allowed to be withdrawn by the petitioner under intimation to the police agency. Crucially, the Court directed that the petitioner's bank account shall be unfrozen, and the petitioner shall be permitted to operate the account.

Facts

The petitioner, Prithviraj Songara, filed a writ petition seeking an order to unfreeze his bank account (Account No. 066201000007884) held with Indian Overseas Bank. The petitioner argued that his case was covered by previous judgments of the High Court, specifically Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No.1100 of 2024) and Archana Vs. The State of Madhya Pradesh and Others (dated 27.07.2026). In the Malcolm Murayis case, petitioners involved in crypto trading had their accounts frozen by banks based on intimations from cyber cells, alleging involvement in cyber fraud. The petitioner in the present case seeks similar relief to operate his bank account, which has been frozen.

Key Issues

1. Whether the High Court can direct the unfreezing of a bank account based on previous High Court judgments when the account has been frozen by a bank on the intimation of cyber cell police stations alleging involvement in cyber fraud? 2. Whether the principles laid down in Malcolm Murayis & Ors. Vs. State Bank of India and Others and Archana Vs. The State of Madhya Pradesh and Others are applicable mutatis mutandis to the present case? Petitioner's Arguments: The petitioner contended that his situation is squarely covered by the decisions in Malcolm Murayis and Archana. He argued that the bank accounts were frozen without prior notice and that he was lawfully conducting his business. He relied on the relief granted in the cited cases, which involved directing the banks to keep disputed amounts in fixed deposits and allowing the operation of the remaining account balance or unfreezing the account under certain conditions. Revenue/State's Arguments: The judgment does not record specific arguments from the revenue or state. The banks' counsel in the cited Malcolm Murayis case had submitted that they froze accounts only upon instructions from cyber cell police stations and were bound by those instructions.