Yash Shilawat vs. State Bank Of INDIA

Held

The Court held that the principles laid down in the cases of Malcolm Murayis and Archana would apply mutatis mutandis to the present case. The disputed amount of Rs. 4,140/- in the petitioner's account was directed to be kept in a Fixed Deposit (FD). If further complaints were received by the bank concerning other entries, the bank was 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 in FD was to be liquidated only after orders were passed by the competent Judicial Magistrate within three months. If the police agency failed to proceed in accordance with law within this period, the amount in FD could be withdrawn by the petitioner under intimation to the police agency. Crucially, the bank account of the petitioner was to be unfrozen, and the petitioner was permitted to operate the account. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Yash Shilawat, filed a writ petition seeking to unfreeze his bank account held with the State Bank of India. The account was frozen based on intimations from cyber cells of various police stations alleging involvement in cyber fraud. The petitioner contended that he was not served any notice and was lawfully conducting his business, suggesting that a fraudulent party may have transacted through his account. He relied on a previous High Court judgment in Malcolm Murayis & Ors. Vs. State Bank of India and Others, which dealt with similar issues of frozen bank accounts due to cyber crime allegations. The judgment in Malcolm Murayis, and a subsequent one in Archana Vs. The State of Madhya Pradesh and Others, which discussed a Standard Operating Procedure (SOP) for grievance redressal in cyber crime cases, were considered relevant.

Key Issues

1. Whether the bank account of the petitioner, frozen on the basis of cyber cell intimations without prior notice to the petitioner, should be unfrozen or subjected to specific directions for managing the disputed amount? (Mixed question of law and fact, concerning the procedure for freezing bank accounts under relevant criminal procedure and cyber crime laws). Petitioner's arguments: The petitioner argued that his bank account was frozen without any notice to him and that he was engaged in lawful business. He contended that the freezing was arbitrary and that the amounts involved in alleged cyber fraud were minimal compared to his account balance. He relied on the precedent set in Malcolm Murayis and the principles of natural justice. Revenue/State's arguments: The judgment does not explicitly record arguments from the State or revenue. The banks submitted that they froze the accounts solely on instructions from investigating authorities and were bound by those instructions.