Harish Bhatiya vs. Bank Of INDIA Through Its Branch Manager

Held

The Court held that the decisions in Malcolm Murayis and Archana would apply mutatis mutandis to the present case. The Court directed that the disputed amount in the petitioner's bank account shall be kept in a Fixed Deposit (FD). If any other complaint is received by the bank concerning other entries, the bank is permitted to take appropriate action in accordance with law, keeping in mind the 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. It is expected that the police agency will proceed in accordance with law under the relevant provisions of the BNSS or any other applicable law. Failing this, the amount kept in FD may be allowed to be withdrawn by the petitioner under intimation to the police agency. The bank account of the petitioner shall be unfrozen, and the petitioner will be permitted to operate the account. The ratio decidendi is that bank accounts frozen due to cyber fraud allegations should be handled with adherence to procedural fairness, including the SOP, and that a balance must be struck between investigation needs and the account holder's rights, with a time-bound mechanism for resolution.

Facts

The petitioner, Harish Bhatiya, filed a writ petition under Article 226 of the Constitution of India seeking the removal of an alleged illegal and arbitrary freeze on his bank account with the Bank of India. The petitioner contended that his bank account was frozen without lawful authority or order. He 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). The petitioner's grievance was that his bank account was frozen based on intimations from cyber cells of police stations, alleging involvement in cyber fraud, without prior notice to him. The Bank of India stated that it froze the account only upon instructions from the cyber cell police stations.

Key Issues

1. Whether the freeze imposed on the petitioner's bank account by the respondent bank, based on instructions from cyber cell police stations alleging cyber fraud, is lawful and justified, particularly in the absence of a prior notice to the petitioner and adherence to procedural requirements like Section 102 of Cr.P.C.? Petitioner's arguments: The petitioner argued that the freeze was illegal and arbitrary, as he was not issued any notice regarding his alleged involvement in any offense. He claimed to be lawfully carrying out his business and that the transactions might have been made by someone else through his account. He relied on the High Court's decision in Malcolm Murayis, which held that cyber crime cells failed to comply with Section 102 of Cr.P.C. and that banks are bound by such instructions. He also highlighted the Standard Operating Procedure (SOP) for grievance redressal in cyber crime cases. Revenue/State's arguments: The respondent bank contended that it froze the account solely on the instructions of various cyber cell police stations and is bound by those directives. The judgment does not record specific arguments from the cyber cell police stations.