Ayan Khan vs. Bandhan Bank

Held

The High Court held that the principles laid down in the cases of Malcolm Murayis and Archana would apply mutatis mutandis to the present case. The Court directed that the disputed amount in the petitioner's bank account shall be kept in a Fixed Deposit (FD). If any further complaints are received by the bank regarding other entries, the bank is permitted 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 would be allowed to be liquidated only after orders are passed by the competent Judicial Magistrate within three months. The Court further directed that the petitioner's bank account shall be unfrozen, and the petitioner shall be permitted to operate the account. The Court expected the police agency to proceed in accordance with law under the relevant provisions of the BNSS or any other applicable law. If the Magistrate does not pass orders within three months, the amount kept in FD may be allowed to be withdrawn by the petitioner under intimation to the police agency.

Facts

The petitioner, Ayan Khan, filed a writ petition seeking the removal of a freeze imposed on his Bandhan Bank account (Account No. 50230031114096). The petitioner contended that the freeze was imposed without lawful authority. He relied on the High Court's decision in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No.1100 of 2024), which dealt with similar issues of bank accounts being frozen based on cyber crime allegations. The judgment in Malcolm Murayis noted that banks freeze accounts on intimation from cyber cells, often without prior notice to account holders, and that investigating agencies sometimes fail to comply with Section 102 of the Cr.P.C. The High Court also referred to a subsequent decision in Archana Vs. The State of Madhya Pradesh and Others, which discussed a Standard Operating Procedure (SOP) for grievance redressal concerning frozen bank accounts in cyber crime cases.

Key Issues

1. Whether the freeze imposed on the petitioner's bank account is illegal and arbitrary, warranting intervention under Article 226 of the Constitution of India? Petitioner's Argument: The petitioner argued that the freeze was imposed without any lawful authority or proper procedure. He contended that his case is squarely covered by the High Court's previous decisions in Malcolm Murayis and Archana, which addressed similar grievances regarding the arbitrary freezing of bank accounts. The petitioner sought the immediate removal of the freeze to allow him to operate his account. Revenue/State's Argument: The judgment does not record any specific arguments from the revenue or state. However, the context implies that the freeze was initiated based on information from cyber crime agencies. The banks, as respondents, stated they froze accounts only upon instructions from cyber cell police stations and were bound by those instructions. The High Court's decisions in Malcolm Murayis and Archana, which were relied upon, discussed the procedures and shortcomings of cyber crime investigations and bank account freezes.