Shree Rudraksha Traders Through Its Proprietor Rahul Dubey vs. Axis Bank

Held

The High Court held that the decisions in Malcolm Murayis and Archana were applicable mutatis mutandis to the present case. The Court directed that the disputed amount of Rs. 4,20,254/- be kept in Fixed Deposit (FD). If any other complaint regarding a different entry was received by the bank, it was open for the bank to take appropriate action in accordance with law, keeping in mind the Standard Operating Procedure (SOP) issued by the Government. The disputed amount was to be allowed to be liquidated only after orders were passed by the competent Judicial Magistrate within three months. It was expected that the police agency would proceed in accordance with law under the relevant provisions of the BNSS or any other applicable law. Failing this, the amount kept in FD could be withdrawn by the petitioner under intimation to the police agency. Consequently, the bank account of the petitioner was to be unfrozen, and the petitioner permitted to operate the account. No issue was expressly left undecided.

Facts

The petitioner, Shree Rudraksha Traders, through its proprietor Rahul Dubey, filed a writ petition seeking to unfreeze its current bank account with Axis Bank. The account was frozen based on an intimation from cyber cell police stations alleging involvement in cyber fraud. The petitioner contended that they were unaware of any such involvement and were lawfully conducting their business. They relied on previous High Court judgments, 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), which dealt with similar issues of bank accounts being frozen due to cyber crime allegations. The petitioner sought directions to allow them to operate their bank account.

Key Issues

1. Whether the High Court can direct the unfreezing of a bank account that has been frozen by police authorities on allegations of cyber fraud, in the absence of prior notice to the account holder or compliance with statutory procedures like Section 102 of Cr.P.C.? Petitioner's arguments: The petitioner argued that their bank account was frozen without any prior notice or opportunity to be heard. They contended that they were engaged in lawful business and that some unknown individual might have transacted through their account, linking it to cyber fraud. They relied on the principle that bank accounts should not be frozen mechanically and that investigating agencies must follow due process, including informing the concerned Magistrate as per Section 102 of Cr.P.C. They further submitted that their case was covered by the precedents set in Malcolm Murayis and Archana, which provided relief in similar circumstances. Revenue/State's arguments: The judgment does not record specific arguments from the revenue or state authorities regarding the petitioner's case. However, it notes that in the Malcolm Murayis case, the respondent banks submitted that they had frozen accounts only upon instructions from cyber cell police stations and were bound by those instructions.