The Madhya Pradesh High Court has ruled that a bank account should not remain fully frozen merely because a specific transaction has been flagged in a cybercrime investigation. The court directed State Bank of India (SBI) to unfreeze a woman’s account while keeping Rs 2,01,263.58 linked to the alleged fraud in a fixed deposit.
Justice Sandeep N Bhatt passed the order while hearing the woman’s plea against the debit freeze imposed on her account following an alleged suspicious cybercrime linked transaction.
The court said, “Within three months, as it is expected from the cybercrime police to proceed in accordance with law under Section 102 of CrPC, or any other law on which they are relying, failing which the amount so kept in FDs may also be allowed to be withdrawn by the petitioners under intimation to the cybercrime agencies.”
The order was passed on Aug 31. The court observed that freezing the entire account was not necessary when only a particular amount had been identified as suspicious.
Woman challenges account freeze
The woman approached the court after her SBI account was placed under a debit freeze following information from cybercrime authorities about a suspicious transaction. She sought removal of the freeze while agreeing to have the disputed amount separately secured.
She said she is involved in trading crypto and virtual currency and has accounts with SBI and ICICI Bank. According to her, both accounts were suddenly frozen following communications from cyber cells of various police stations over allegations of involvement in cyber fraud.
Her counsel argued that the woman had not received any notice from any police station regarding such alleged involvement. The counsel also said she was lawfully conducting her trading business and that the disputed transaction may have been made by another person involved in fraud.
The petitioner requested permission to operate the account, with the amount allegedly linked to cyber fraud placed in a separate FD until she received a clean chit.
Only disputed amount to remain in FD
The court said the case was covered by its earlier decision in Malcolm Murayis v State Bank of India, concerning bank accounts frozen over cybercrime allegations.
Following that order, SBI was directed to keep only Rs 2,01,263.58 in an FD. The amount can be released only after an appropriate order from the competent Judicial Magistrate within 3 months.
The remaining balance can be accessed by the petitioner.
The court further stated, “Bank can keep the disputed amount i.e. Rs 2.01 lakh as informed to him by the crime agencies in fixed deposits, which shall be allowed to be liquidated only after the orders are passed by the competent Judicial Magistrate within three months as it is expected from the police agency to proceed in accordance with law…failing which the amount so kept in FD may also be allowed to be withdrawn by the petitioner under intimation to the Police agency,”
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