Prashant vs. 1 Branch Manager State Bank Of INDIA Branch Bhamori Indore

Held

The Court held that the principles laid down in the cases of 'Malcolm Murayis' and 'Archana' were applicable to the present case. The Court directed that the disputed amount of Rs. 54,665/- be kept in a Fixed Deposit (FD). The bank account of the petitioner was ordered to be unfrozen, allowing the petitioner to operate the account. The FD was to be liquidated only after orders were passed by the competent Judicial Magistrate within three months. The Court expected the police agency to proceed in accordance with law under the relevant provisions or any other law they were relying upon. If the police agency failed to act within the stipulated time, the amount in FD could be withdrawn by the petitioner, with intimation to the police agency. The Court also noted that if any other complaint was received by the bank regarding other entries, the bank could take appropriate action in accordance with law, keeping in mind the SOP issued by the Government.

Facts

The petitioner, Prashant, filed a writ petition seeking to unfreeze his bank account. The account had been frozen by the State Bank of India based on intimation from cyber crime cells of various police stations, alleging involvement in cyber fraud. The petitioner contended that he was engaged in lawful trading of crypto and virtual currency and had not received any notice. He argued that if any fraud occurred, it was by a third party transacting through his account. The petitioner relied on previous High Court judgments, specifically 'Malcolm Murayis & Ors. Vs. State Bank of India and Others' and 'Archana Vs. The State of Madhya Pradesh and Others', which dealt with similar issues of frozen bank accounts due to cyber crime allegations and the subsequent Standard Operating Procedure (SOP) for grievance redressal.

Key Issues

1. Whether the High Court can direct the unfreezing of a bank account when it has been frozen by the bank on the instructions of investigating agencies alleging cyber fraud, and if so, under what conditions? (Article 226 of the Constitution of India, Section 102 of Cr.P.C.). Petitioner's Arguments: The petitioner argued that his bank account was frozen without prior notice and that he was engaged in lawful business. He contended that the freezing was done without complying with Section 102 of Cr.P.C. and that the amount in dispute was a small fraction of his total account balance. He relied on the principles laid down in 'Malcolm Murayis' and 'Archana' judgments, which emphasized the need for a balanced approach and adherence to the SOP. Revenue/State's Arguments: The judgment does not explicitly record arguments from the revenue or state. However, it notes that banks freeze accounts only upon instructions from investigating authorities and are bound by such directives. The court's discussion implies that the investigating agencies are responsible for the freezing and subsequent actions.