M/S Kashiram Fuels Lole Propritorship Firm Through Proprietor Swati vs. Bank Of INDIA

Held

The High Court held that the decisions in Malcolm Murayis and Archana, as well as the SOP dated 10.04.2026, are applicable mutatis mutandis to the present case. The Court directed that the disputed amount of Rs. 4,69,919/- shall be kept in a Fixed Deposit (FD). If any other complaint is received by the Bank regarding other entries, the Bank is open to taking appropriate action in accordance with law, keeping in mind the SOP. The disputed amount shall be allowed to be liquidated only after orders are passed by the competent Judicial Magistrate within three months. If the Police agency fails to proceed in accordance with law within this period, the amount kept in FD may be allowed to be withdrawn by the petitioner under intimation to the Police agency. Crucially, the bank account of the petitioner shall be unfrozen, and the petitioner shall be permitted to operate the account. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s. Kashiram Fuels Lole Proprietorship Firm, through its proprietor Swati, filed a writ petition seeking to unfreeze its current bank account (No. 955430110000096) held with Bank of India (Respondent No. 1) and to release a lien of Rs. 4,69,919/-. The petitioner argued that its case was covered by previous High Court judgments, 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). These judgments dealt with the freezing of bank accounts based on cyber crime allegations and the subsequent Standard Operating Procedure (SOP) issued by the Government for grievance redressal. The petitioner sought directions for the release of funds and unfreezing of the account.

Key Issues

1. Whether the High Court can direct the unfreezing of a bank account and release of funds when the account has been frozen based on allegations of involvement in cyber fraud, and if so, under what conditions? (Relates to the inherent powers of the High Court under Article 226 of the Constitution of India and the principles laid down in previous judgments). 2. Whether the Standard Operating Procedure (SOP) dated 10.04.2026, issued by the Ministry of Home Affairs, governing grievance redressal for frozen bank accounts in cyber crime cases, is applicable and should be followed by the respondents? (Relates to the application of administrative procedures and judicial pronouncements). Petitioner's arguments: The petitioner contended that their case is squarely covered by the decisions in Malcolm Murayis and Archana, which provide a framework for dealing with frozen bank accounts. They relied on the principles that accounts should not be frozen mechanically and that a balance must be struck between investigation needs and the account holder's rights. They sought directions for the release of funds and unfreezing of their account as per the established procedure. Revenue/State's arguments: The judgment does not explicitly record arguments from the revenue or state. However, it references the actions of cyber crime cells and police stations in requesting the freezing of accounts, implying their role in the dispute.