Shree Mayur Seeds And Agrictech vs. Idbi Bank

Held

The Court held that the decisions in Malcolm Murayis (supra) and Archana (supra) are applicable mutatis mutandis to the present case. The Court directed that the disputed amount of Rs. 3,56,900/- (from 26 transactions) mentioned in the petition shall be kept in a fixed deposit. If any other complaint is received by the bank regarding other entries, the bank is at liberty 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 Failing this, the amount kept in FD may also be allowed to be withdrawn by the petitioner under intimation to the police agency. Consequently, the bank account of the petitioner shall be unfrozen, and the petitioner shall be permitted to operate the account. No issue was expressly left undecided.

Facts

The petitioner, Shree Mayur Seeds and Agrictech, filed a writ petition seeking to unfreeze its current bank account (Account No. 008102000039260) with IDBI Bank, Ujjain, to allow operation. The petitioner argued its case was covered by previous High Court judgments, specifically Malcolm Murayis & Ors. Vs. State Bank of India and Others. In that case, petitioners involved in crypto and virtual currency trading had their accounts frozen by banks based on cyber cell intimations alleging involvement in cyber fraud. The petitioners in Malcolm Murayis had not received any notice and claimed to be conducting lawful business, suggesting that some fraudulent transactions might have passed through their accounts. The High Court in Malcolm Murayis, noting the lack of response from cyber crime cells and non-compliance with Section 102 of Cr.P.C., directed that disputed amounts be kept in fixed deposits pending judicial orders.

Key Issues

1. Whether the High Court can direct the unfreezing of a bank account that has been frozen by a bank based on an intimation from a cyber cell police station, and if so, under what conditions? (Article 226 of the Constitution of India, Section 102 of the Code of Criminal Procedure, 1973). Petitioner's Argument: The petitioner contended that its case is squarely covered by the decision in Malcolm Murayis & Ors. Vs. State Bank of India and Others, where the Court allowed operation of bank accounts after directing that disputed amounts be kept in fixed deposits pending judicial orders. The petitioner also relied on the subsequent judgment in Archana Vs. The State of Madhya Pradesh and Others, which discussed the Standard Operating Procedure (SOP) for grievance redressal in cyber crime cases. Revenue/State's Argument: The judgment does not record any specific arguments from the revenue or state. The banks' submission in the Malcolm Murayis case was that they froze accounts only upon instructions from cyber cell police stations and were bound by such directives.