Salman Khan vs. Indusind Bank

Held

The Court held that the decisions rendered in Malcolm Murayis and Archana would apply mutatis mutandis to the present case. Following these precedents, the Court directed that the disputed amount in the petitioner's bank account should be kept in a Fixed Deposit (FD). If any other complaints were received by the bank concerning other entries, the bank was permitted to take appropriate action in accordance with the law, keeping in mind the SOP issued by the Government as discussed in the Archana case. The disputed amount would be allowed 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 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 Failing this, the amount kept in FD could be withdrawn by the petitioner under intimation to the police agency. Crucially, the Court directed that the bank account of the petitioner shall be unfrozen, and the petitioner be permitted to operate the account.

Facts

The petitioner, Salman Khan, filed a writ petition seeking the removal of an illegal and arbitrary freeze imposed on his bank account with Indusind Bank. The petitioner contended that his bank account was frozen without lawful authority or order. He relied on a previous judgment by the same High Court in the case of Malcolm Murayis & Ors. vs. State Bank of India and Others, which dealt with similar issues of bank accounts being frozen based on intimations from cyber cells of police stations alleging involvement in cyber fraud. The petitioner argued that he had not received any notice and was lawfully carrying out his business. The Court noted that the Malcolm Murayis case was decided in light of a Standard Operating Procedure (SOP) framed by the Government for handling grievances related to bank accounts frozen in cyber crime cases, as discussed in another co-ordinate bench judgment in Archana vs. The State of Madhya Pradesh.

Key Issues

1. Whether the freeze imposed on the petitioner's bank account was lawful and justified, considering the absence of prior notice or proper procedure, and whether it violates the petitioner's right to conduct business under Article 19(1)(g) of the Constitution of India? Petitioner's Arguments: The petitioner argued that the freeze was arbitrary and illegal, as no lawful authority or order was provided. He contended that his business activities were legitimate and that he had not been notified of any wrongdoing. He relied on the principles laid down in Malcolm Murayis and Archana, which emphasized the need for due process and adherence to the SOP for freezing bank accounts. Revenue/State's Arguments: The judgment does not explicitly record arguments from the revenue or state. However, it refers to the actions of cyber cells and police stations in requesting banks to freeze accounts based on allegations of cyber fraud. The banks' stance, as noted in the Malcolm Murayis case, was that they acted upon instructions from investigating authorities.