Jai Rajput Trading Company Through Its Proprietor Jitendra Singh Rajput vs. Axis Bank

Held

The Court held that the decisions in 'Malcolm Murayis' and 'Archana' were applicable mutatis mutandis to the present case. Following the directions in these previous judgments, the Court ordered that the disputed amount of Rs. 5,48,921/- shall be kept in a Fixed Deposit (FD). The petitioner's bank account shall be unfrozen, and they shall be permitted to operate it. The FD is to be liquidated only after orders are passed by the competent Judicial Magistrate within three months. If the police agency fails to proceed according to law within this period, the amount in FD may be withdrawn by the petitioner under intimation to the police agency. The Court also noted that if any other complaint is received by the bank, it can take appropriate action in accordance with law, keeping in mind the SOP issued by the Government as discussed in the 'Archana' case. The Court clarified that any further action by the bank should adhere to the SOP and the guidelines laid down, ensuring reasoned orders for continued freezing.

Facts

The petitioner, Jai Rajput Trading Company, through its proprietor Jitendra Singh Rajput, filed a writ petition seeking to unfreeze its current bank account with Axis Bank. The account was frozen based on intimations from cyber cells of various 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 judgments of the High Court in similar matters, specifically 'Malcolm Murayis & Ors. Vs. State Bank of India and Others' and 'Archana Vs. The State of Madhya Pradesh and Others', which dealt with the freezing of bank accounts due to cyber fraud allegations and the subsequent Standard Operating Procedure (SOP) issued by the Ministry of Home Affairs.

Key Issues

1. Whether the freezing of the petitioner's bank account by the respondent bank, based on intimations from cyber cells without providing notice or an opportunity to be heard to the petitioner, is legally sustainable, particularly in light of Section 102 of the Cr.P.C. and the principles of natural justice? 2. Whether the Standard Operating Procedure (SOP) dated 10.04.2026, governing grievance redressal for frozen bank accounts in cyber crime cases, and the guidelines laid down in 'Archana Vs. The State of Madhya Pradesh and Others' should be applied to the present case? Petitioner's arguments: The petitioner argued that their bank account was frozen without any prior notice or opportunity to respond to the allegations of cyber fraud. They contended that they were engaged in lawful business and that the freezing was arbitrary. They relied on the judgments in 'Malcolm Murayis' and 'Archana' which provided relief in similar situations and highlighted the procedural lacunae in freezing accounts. They emphasized that the SOP and the guidelines in 'Archana' should be followed. Revenue/State's arguments: The judgment does not record specific arguments from the revenue or state. However, it notes that banks freeze accounts based on instructions from investigating authorities.