Supreme Court places before CJI plea for SOP on freezing, de-freezing of bank accounts during cybercrime probes

New Delhi: The Supreme Court has directed that a plea seeking directions to the Centre and the Reserve Bank of India to formulate a Standard Operating Procedure governing freezing and de-freezing of bank accounts during cybercrime probes be placed before Chief Justice of India Surya Kant.

A bench of Justices Pankaj Mithal and SVN Bhatti directed the apex court registry to seek instruction from the CJI and place the matter accordingly before appropriate bench after it was informed by the Centre that the CJI-led bench was already hearing a suo moto matter related to digital arrests, where the same issue is under consideration.

"Anil Kaushik, ASG further submits that as far as prayers 'B' and 'C' are concerned, they are the subject matter of consideration before another bench of this Court in Suo Moto Writ Petition (Crl.) No…. In view of the above, the registry to obtain appropriate orders from the Chief Justice of India and post the matter accordingly," the top court said in its order on January 16.

The top court had earlier agreed to examine the plea which have prayer 'B' stating that no bank account shall be frozen without a written reasoned order and intimation to the account holder within 24 hours of such action and every freezing order shall be forthwith reported to the jurisdictional magistrate as mandated under Section 106(3) of BNSS/ 102(3) of the CrPC.

Its prayer 'C' seeks direction to the Centre and the Reserve Bank of India to formulate a uniform Standard Operating Procedure (SOP) governing freezing and de-freezing of bank accounts during cybercrime investigations, so as to prevent arbitrary action and ensure procedural fairness nationwide.

At the outset, Kaushik informed the bench that Centre has not freezed the bank accounts of petitioners, who alleged the action was taken without intimation.

On January 6, the top court had asked the copy of the petition to be served on the Centre within three days, and listed the matter next week.

The plea also sought the issuance of appropriate guidelines to all investigating agencies, including cyber cells across the country, to ensure that no bank account is frozen without a written, reasoned order and intimation to the account holder within 24 hours of such action.

The plea filed by petitioner Vivek Varshney, through advocate Tushar Manohar Khairnar ,said he was aggrieved by the "arbitrary freezing/holding" of his bank account(s) by the Cyber Cell of Tamil Nadu police allegedly without any prior notice, communication or judicial approval, thereby violating his fundamental rights under Articles 19(1)(g) and 21 of the Constitution.

The petitioner claimed that the freezing order in his case has resulted in complete financial paralysis, restricting him from carrying out his professional and personal obligations, including payment of essential expenses, taxes and liabilities.

"It is respectfully submitted that Section 106(3) of BNSS/ 102(3) of the Cr.P.C. mandates that any seizure or freezing of property must be forthwith reported to the jurisdictional magistrate. However, in the instant case, no such compliance has been made. The action of the respondents is, therefore, without jurisdiction, arbitrary, and unconstitutional," it said.

The plea highlighted that there is currently no uniform procedure or Standard Operating Protocol (SOP) governing the freezing and unfreezing of bank accounts during cybercrime or financial investigations.

"Consequently, citizens across different states are subjected to inconsistent practices, prolonged freezing periods, and deprivation of their financial rights without due process.

"Hence, this court's indulgence is sought to (i) direct the immediate defreezing of the petitioner’s account(s); and (ii) frame uniform guidelines to ensure procedural safeguards, proportionality, and accountability in all future actions of this nature," it said.

Varshney, whose bank account was allegedly frozen due to transaction related to sale of jewellery, submitted that his writ petition was filed to formulate a rule that unless an account holder is proven to be complicit in a crime, their entire bank account or amount more than alleged to be involved in the crime should not be frozen merely because a suspicious transaction has been traced to it.

"Recognising the increasing frequency of such cases", the plea urged the court to "formulate guidelines to save the common man from suffering from unnecessary harassment".

It also urged the court to direct "the Ministry of Home Affairs, Government of India to formulate a uniform policy and standard operating procedures (SOPs) in the cases of similar nature where cyber cell issues notices freezing accounts".