Bank Account Freezing by Cyber Cell Subject to Section 102 CrPC Compliance and Segregation of Disputed Amounts.

The petitioner, engaged in the trading of crypto and virtual currency, filed a writ petition under Article 226 of the Constitution of India challenging the complete freezing of his bank account (No. 20289368198) with Fino Payments Bank.

The account was frozen following instructions from cyber cell police stations (Respondents 3-9) on allegations of involvement in cyber fraud.

The petitioner contended that no prior notice was served, he was conducting lawful business, and that investigating agencies failed to comply with statutory procedures regarding seizure and reporting to the Magistrate.

The respondent bank stated they were merely following instructions from law enforcement.

1. Whether the continued complete freezing of the petitioner's bank account by investigating agencies, without compliance with procedural safeguards or timely response to court proceedings, is sustainable.

2. Whether the disputed amount can be secured in a manner that allows the petitioner to operate the remainder of the account while the investigation proceeds.

Section 102 of the Code of Criminal Procedure (Cr.P.C.), which mandates that any seizure of property suspected to have been stolen or found under circumstances which create suspicion of the commission of any offence must be reported to a Magistrate.

Sections 106(3) and 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

Articles 14, 19(1)(g), 21, and 300A of the Constitution of India, which protect the right to trade and the right against arbitrary state action.

The Court noted that despite interim orders and communications sent by the banks to various cyber crime cells (including those in Bangalore, Karnataka), the agencies—except for one—failed to respond or show cause for the continued freeze.

The Court reasoned that the petitioner’s right to operate his account should not be indefinitely suspended due to administrative lethargy. By applying the principle of proportionality, the Court determined that the interests of justice would be served by isolating only the specific "disputed amount" allegedly linked to fraud, rather than keeping the entire account inaccessible.

The investigating agencies were given three months to proceed in accordance with Section 102 Cr.P.C. (or relevant law); failing such action within the stipulated time, the petitioner is permitted to withdraw the amount kept in the fixed deposit under intimation to the agencies.