SC to examine plea for SOP on freezing and de-freezing bank accounts in cybercrime cases

The Supreme Court on Tuesday agreed to examine a plea seeking directions 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.

A bench of Justices Pankaj Mithal and SVN Bhatti 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, that 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 of India.

“Direct the respondent Union of India 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,” the plea said.

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”