Bank must unfreeze accounts and secure only the disputed amounts in fixed deposits if authorities fail to follow Section 102 CrPC.

The petitioner, a proprietary concern, filed a writ petition under Article 226 of the Constitution of India challenging the action of Bandhan Bank in freezing/placing a lien on its current bank account.

The freeze was reportedly implemented based on instructions from police authorities regarding a single suspicious entry credited by an unknown source.

The petitioner contended that no prior notice or reasons were provided by the Bank for this action.

An interim order had previously allowed for the withdrawal of Rs. 50,000 per month.

Despite the Bank notifying various cyber crime cells, most agencies failed to respond to the court proceedings.

1. Whether the unilateral freezing of a bank account by a bank, based on police instructions without formal notice or adherence to statutory procedure, is sustainable.

2. Whether the court should direct the de-freezing of the account while protecting the disputed amount during an ongoing investigation.

The court primarily relied on the constitutional remedy under Article 226 of the Constitution of India.

Statutory requirements for investigation and seizure of property under Section 102 of the Code of Criminal Procedure (Cr.P.C.) [now corresponding to Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023], which mandates police authorities to follow specific legal procedures when freezing bank accounts.

The Court observed that while the Bank acted on the request of cyber crime agencies, the agencies demonstrated a "poor functioning and irresponsible approach" by failing to respond to judicial notices or emails.

The Court reasoned that an indefinite freeze without a formal legal proceeding or response from the investigating agencies was unjustifiable.

It held that the interests of justice would be served by balancing the petitioner's right to operate the account with the investigative requirement to secure the disputed funds.

Consequently, the Court determined that only the specific disputed amount should be secured in a fixed deposit, rather than keeping the entire account frozen, to ensure the petitioner can continue business operations.

The Bank was ordered to keep only the specific "disputed amount" (as informed by cyber crime agencies) in a fixed deposit, which can only be liquidated upon orders from a Competent Judicial Magistrate within three months.

If the cyber crime agencies fail to proceed in accordance with law (Section 102 Cr.P.C.) within this period, the petitioner may be allowed to withdraw the FD amount under intimation to the agencies.

The Court granted the respondents liberty to proceed according to law if any material evidence was suppressed by the petitioner.