Chandra Shekhar Dayar vs. Hdfc Bank

Held

The Court held that the decisions in "Malcolm Murayis" and "Archana" were applicable to the present case. The Court directed that the disputed amount of Rs. 51,000/- be kept in a Fixed Deposit (FD). If any further complaints were received by the bank regarding other entries, the bank was permitted to take appropriate action in accordance with law, keeping in mind the Standard Operating Procedure (SOP) issued by the Government. The disputed amount in 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 in accordance with law under the relevant provisions of the BNSS or any other applicable law. Failing this, the amount in FD could be withdrawn by the petitioner under intimation to the police agency. Crucially, the Court directed that the bank account of the petitioner shall be unfrozen, and the petitioner be permitted to operate the account.

Facts

The petitioner, Chandra Shekhar Dayar, filed a writ petition seeking to unfreeze his bank account (No. 50200027559222 with HDFC Bank, Indore) which had been placed under lien. The petitioner argued that his case was covered by previous High Court judgments in "Malcolm Murayis & Ors. Vs. State Bank of India and Others" and "Archana Vs. The State of Madhya Pradesh and Others". These judgments dealt with similar situations where bank accounts were frozen based on information from cyber cells alleging involvement in cyber fraud. The petitioner contended that he had not received any notice and was lawfully conducting his business. The previous judgments had directed that disputed amounts be kept in fixed deposits pending further orders from a competent Magistrate, while allowing the petitioner to operate the rest of the account.

Key Issues

1. Whether the High Court has the jurisdiction to direct the unfreezing of a bank account when it has been placed under lien by law enforcement agencies based on allegations of cyber fraud, and if so, under what conditions? (Article 226 of the Constitution of India). The petitioner argued that the freezing of the account was arbitrary and without proper notice, and that the principles laid down in "Malcolm Murayis" and "Archana" should be applied. The petitioner relied on the fact that the alleged suspicious transaction amount was small compared to the total account balance. The State, represented by the Government Advocate, did not present specific arguments against the petitioner's plea but was implicitly represented by the actions of the cyber cell and the subsequent freezing of the account. The judgment indicates that the banks acted upon instructions from cyber cell police stations.