Veer And Biotech vs. Idbi Bank

Held

The Court held that the decisions in Malcolm Murayis (supra) and Archana (supra) were applicable to the present case. The Court directed that the disputed amount of Rs. 4,22,091/- be kept in a Fixed Deposit (FD). The petitioner's bank account was to be unfrozen, allowing the petitioner to operate it. The FD would be liquidated only after orders from a competent Judicial Magistrate within three months. If the police agency failed to proceed in accordance with the law within this period, the amount in FD could be withdrawn by the petitioner, with intimation to the police agency. The Court also noted that if further complaints were received by the bank regarding other entries, the bank could take appropriate action in accordance with the law, keeping in mind the SOP. The judgment did not expressly leave any issue undecided.

Facts

The petitioner, Veer and Biotech, filed a writ petition seeking to unfreeze its current bank account held with IDBI Bank. The petitioner contended that its account was frozen without prior notice and that its business operations were severely impacted. The petitioner 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 due to allegations of cyber fraud. The Court also considered a subsequent judgment in Archana Vs. The State of Madhya Pradesh and Others, which discussed a Standard Operating Procedure (SOP) for grievance redressal in cases of bank accounts frozen due to cyber crime. The disputed amount in the present petition was Rs. 4,22,091/-.

Key Issues

1. Whether the freezing of the petitioner's bank account without prior notice and an opportunity to be heard is arbitrary and violates principles of natural justice, particularly in light of the judgment in Malcolm Murayis (supra)? 2. Whether the Standard Operating Procedure (SOP) dated 10.04.2026, issued by the Ministry of Home Affairs, should be applied to govern the grievance redressal mechanism for frozen bank accounts in cyber crime cases, as discussed in Archana (supra)? Petitioner's Arguments: The petitioner argued that the freezing of its bank account was done without any notice, hindering its business. It relied on the Malcolm Murayis case, where similar freezing orders were challenged. The petitioner sought immediate unfreezing of the account to resume operations. Revenue/State's Arguments: The judgment does not record specific arguments from the revenue or state. However, the context implies that the freezing was based on information from cyber crime agencies. The Court's consideration of the SOP suggests an attempt to balance investigation needs with account holder rights.