Sanjana Seeds And Biotech vs. Idbi Bank

Held

The Court held that the principles laid down in the cases of 'Malcolm Murayis' and 'Archana' were applicable to the present case. The Court directed that the disputed amount of Rs. 3,52,061/- be kept in a Fixed Deposit (FD). The petitioner's bank account was to be unfrozen, allowing them to operate it. The FD would be liquidated only after orders were passed by the competent Judicial Magistrate within three months, with the expectation that the police agency would proceed according to law. If no such orders were passed within the stipulated time, the amount in FD could be withdrawn by the petitioner, subject to intimation to the police agency.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 law, keeping in mind the SOP.

Facts

The petitioner, Sanjana Seeds and Biotech, filed a writ petition seeking to unfreeze its current account held with IDBI Bank. The account was frozen based on an intimation from cyber cell police stations, alleging involvement in cyber fraud. The petitioner contended that they were unaware of any such involvement and were lawfully conducting their business. They relied on previous judgments from the High Court, specifically 'Malcolm Murayis & Ors. Vs. State Bank of India and Others' and 'Archana Vs. The State of Madhya Pradesh and Others', which dealt with similar issues of bank accounts being frozen due to cyber crime allegations. The disputed amount in this petition is Rs. 3,52,061/-.

Key Issues

1. Whether the High Court can direct the unfreezing of a bank account when it has been frozen by police authorities on allegations of cyber fraud, considering the provisions of Section 102 of the Cr.P.C. and the Standard Operating Procedure (SOP) dated 10.04.2026 issued by the Ministry of Home Affairs. Petitioner's Arguments: The petitioner argued that their bank account was frozen without prior notice and that they are engaged in legitimate business. They relied on the precedent set in 'Malcolm Murayis' and 'Archana' cases, which allowed for the operation of bank accounts with disputed amounts kept in fixed deposits, pending investigation or court orders. They emphasized that the police authorities did not comply with Section 102 of Cr.P.C. by informing the concerned Magistrate. Revenue/State's Arguments: The judgment does not record specific arguments from the revenue or state. However, the banks' stance, as reflected in the 'Malcolm Murayis' case, was that they froze accounts only upon instructions from cyber cell police stations and were bound by those instructions.