Devnarayan Dangi vs. State Bank Of INDIA

Held

The Court held that the decisions in Malcolm Murayis and Archana were applicable mutatis mutandis to the present case. The Court directed that the disputed amount, as mentioned in the petition, shall be kept in a Fixed Deposit (FD). If the bank receives any further complaints regarding other entries, it may take appropriate action in accordance with law, keeping in mind the Standard Operating Procedure (SOP) issued by the Government. The disputed amount shall be allowed to be liquidated only after orders are passed by the competent Judicial Magistrate within three months. If no such orders are passed within this period, the amount in FD may be withdrawn by the petitioner under intimation to the police agency.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. The petition was disposed of with these directions.

Facts

The petitioner, Devnarayan Dangi, filed a writ petition seeking to unfreeze his savings bank account (No. 38809622434) with the State Bank of India. The account had been frozen based on intimations from cyber cells of various police stations alleging involvement in cyber fraud. The petitioner contended that he was unaware of any such involvement and was conducting lawful trading of crypto and virtual currency. He argued that the freezing was done without notice and without adhering to Section 102 of the Cr.P.C. The bank submitted that it acted solely on instructions from the investigating authorities. The Court referred to previous judgments in Malcolm Murayis and Archana, which dealt with similar issues of frozen bank accounts due to cyber crime allegations.

Key Issues

1. Whether the freezing of the petitioner's bank account by the respondent bank, solely on the intimation from cyber cells of police stations without prior notice to the petitioner and without adhering to procedural requirements like Section 102 of the Cr.P.C., is legally sustainable? 2. Whether the petitioner is entitled to operate his bank account, subject to appropriate measures for the disputed amount? Petitioner's arguments: The petitioner argued that the freezing was arbitrary and illegal as no notice was issued to him, and the police authorities failed to comply with Section 102 of the Cr.P.C. He asserted that his business was lawful and that any fraudulent transaction might have occurred through his account by a third party. He relied on the principles laid down in the case of Malcolm Murayis. Revenue/State's arguments: The respondent bank contended that it had frozen the accounts only upon receiving instructions from various cyber cell police stations and was bound by those directives. The judgment does not record specific arguments from the cyber cell police stations, other than their initial intimation to freeze the accounts.