Bharat Lal Bairwa Son Of Shri Samaliya Ram vs. State Bank Of INDIA

Held

The Court held that while the freezing of bank accounts in cybercrime investigations causes prejudice, it cannot be termed arbitrary solely on the ground of lack of prior notice, given the nature of cyber offenses and the potential for rapid fund transfers. However, such power must be exercised with circumspection and proportionality, and the restraint cannot continue indefinitely without review. The Court noted the existence of a Standard Operating Procedure (SOP) dated 02.01.2026 issued under the National Cyber Crime Reporting Portal and Citizen Financial Cyber Fraud Reporting and Management System, which provides a structured grievance redressal mechanism. This mechanism includes consideration by a District Grievance Officer, an appeal to a State Grievance Officer, and recourse to the jurisdictional court. The Court also referred to the judgment in Madna Ram Vs. RBI & Anr. (12.08.2026), which outlines similar directions. Consequently, the Court found that a writ petition seeking de-freezing without first availing the remedies under the SOP would ordinarily be premature. The authorities are required to adhere to the SOP's safeguards and timelines. The ratio of Madna Ram (supra) was made part of this order. The Court permitted parties to contest their cases before the respondents.

Facts

Multiple petitioners, including individuals and businesses, filed writ petitions before the Rajasthan High Court at Jaipur. They were aggrieved by the freezing of their bank accounts, allegedly due to cybercrime complaints. The respondents included the State of Rajasthan, various banks (State Bank of India, UCO Bank, HDFC Bank, South Indian Bank, AU Small Finance Bank, IDFC First Bank, ICICI Bank, Bank of Baroda), and police authorities, particularly Cyber Crime units. The petitioners sought the de-freezing of their accounts. The petitions were consolidated as they involved similar issues.

Key Issues

1. Whether the freezing of bank accounts by investigating agencies in connection with cybercrime complaints, without prior notice to the account holder, is arbitrary and illegal? 2. Whether the existing grievance redressal mechanism for account holders whose accounts are frozen is adequate and effective? Petitioner's arguments (implied): The petitioners argued that the freezing of their bank accounts was causing them prejudice and that the action was arbitrary, likely due to the lack of prior notice. They sought immediate intervention from the High Court to unfreeze their accounts. Revenue/State's arguments (implied): The respondents, particularly the police and state authorities, likely contended that the freezing of accounts was a necessary preventive measure in cybercrime investigations, given the rapid transfer of funds. They would have also pointed to the existence of a grievance redressal mechanism.