The New Master Cut Man Salon vs. Rbl Bank LTD
Held
The Court held that the decisions in Malcolm Murayis and Archana were applicable to the present case. The Court directed that the disputed amount of Rs. 19,241/- (related to five disputed entries) should be kept in a Fixed Deposit (FD). If the bank received further complaints regarding other entries, it was open to take appropriate action in accordance with law, keeping in mind the SOP. The disputed amount would be allowed to be liquidated only after orders were passed by the competent Judicial Magistrate within three months. If no such orders were passed within this period, the amount in FD could be withdrawn by the petitioner, with intimation to the police agency. Crucially, the Court directed that the bank account of the petitioner shall be unfrozen, and the petitioner shall be permitted to operate the account. The ratio decidendi is that bank accounts should not be frozen mechanically, and a balance must be struck between investigation needs and the rights of account holders, with adherence to established SOPs and procedural safeguards.
Facts
The petitioner, The New Master Cut Man Salon, filed a writ petition under Article 226 of the Constitution of India seeking the removal of an illegal and arbitrary freeze imposed on its bank account with RBL Bank Ltd. The petitioner argued that its bank account was frozen without lawful authority or order. The petitioner's case was stated to be covered by the High Court's previous decisions in Malcolm Murayis & Ors. Vs. State Bank of India and Others and Archana Vs. The State of Madhya Pradesh and Others. The judgment also references a Standard Operating Procedure (SOP) dated 10.04.2026 issued by the Ministry of Home Affairs concerning grievance redressal for frozen bank accounts in cyber crime cases.
Key Issues
1. Whether the freeze imposed on the petitioner's bank account was lawful and justified, considering the absence of any notice or order to the petitioner and the alleged lack of compliance with Section 102 of the Cr.P.C. by the investigating agencies? (Question of law and fact, turning on principles of natural justice and procedural law). 2. Whether the directions issued in the cases of Malcolm Murayis and Archana are applicable mutatis mutandis to the present case? (Question of law). Petitioner's arguments: The petitioner contended that the freeze was arbitrary and without lawful authority. They relied on the decision in Malcolm Murayis, arguing that they had not received any notice regarding involvement in any offense and were lawfully conducting business. They also highlighted the non-compliance with Section 102 of the Cr.P.C. by the investigating agencies. They further pointed to the SOP and the decision in Archana as supporting their claim for de-freezing. Revenue/State's arguments: The judgment does not record specific arguments from the revenue or state. It notes that the banks froze accounts based on instructions from cyber cell police stations and were bound by such instructions. The judgment primarily relies on the previous High Court decisions and the SOP.
Sections Cited
Section 102
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Cause title — parties, addresses and appearances
ORDER This writ petition has been preferred by the petitioner under Article 226 of the Constitution of India praying for the following reliefs: "a) This petition may kindly be allowed with cost. b) Direct the Respondents to remove the illegal and arbitrary freeze/hold imposed on the petitioner’s bank accounts, namely RBL Bank Ltd Bank, Account No. 409002045604 IFSC Code RATN0000164 which have been frozen without any lawful authority or order. c) Issue such other orders, writ, and direction as this Hon’ble court deems fit in the interest of justice in favor of petitioner."
Learned counsel for the petitioner has submitted that the case of the petitioner is squarely covered by the decision rendered by this Court in the case of Malcolm Murayis & Ors. Vs. State Bank of India and Others Malcolm Murayis & Ors. Vs. State Bank of India and Others passed in W.P. No.1100 of 202
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