SC places before CJI plea for SOP on freezing, de-freezing of bank accounts during cybercrime probes
A bench comprising Justices Pankaj Mithal and SVN Bhatti directed the apex court registry to take directions from the CJI and place the matter before the appropriate bench after being informed by the Center that the CJI-led bench was already hearing a suo moto matter related to digital arrests and the same was being considered.
“Anil Kaushik, ASG further submits that insofar as prayers ‘B’ and ‘C’ are concerned, they are the subject of consideration before another bench of this Court in Suo Moto Writ Petition (Crl.) No. In view of the above, the registry should obtain appropriate orders from the Chief Justice of India and publish the matter accordingly,” the apex court said in its order on January 16.
The apex court had earlier agreed to hear the plea containing prayer ‘B’ stating that no bank account shall be frozen without a reasoned written order and notice to the account holder within 24 hours of such action and that every freezing order shall be immediately notified to the trial judge as mandated under Section 106(3) of BNSS/ 102(3) of the CrPC.
The ‘C’ prayer seeks directions to the Center and the Reserve Bank of India to formulate a uniform Standard Operating Procedure (SOP) to regulate freezing and unfreezing of bank accounts during cybercrime investigations, with a view to preventing arbitrary actions and ensuring procedural fairness across the country.
Initially, Kaushik informed the bench that the Center had not frozen the bank accounts of the petitioners, who claimed that the action was taken without notice.
On January 6, the top court had asked a copy of the petition to be sent to the Center within three days and scheduled the matter for next week. The plea has 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 without informing the account holder within 24 hours of such action.
The plea filed by the petitioner Vivek Varshney through advocate Tushar Manohar Khairnar stated that he was aggrieved by the “arbitrary freezing/holding” of his bank accounts by the Tamil Nadu Cyber Cell police 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 alleged that the freeze in his case resulted in complete financial paralysis, restricting him from fulfilling his professional and personal obligations, including the payment of essential expenses, taxes, and liabilities.
“It is respectfully submitted that Section 106(3) BNSS/ 102(3) of Cr.PC mandates that any seizure or freezing of any property must be immediately notified to the judicial magistrate. However, in the present case, no such compliance has been made. Therefore, the action of the respondents is extrajudicial, arbitrary and unconstitutional,” he said.
The defense underlined 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.
“As a result, citizens in different states are subject to inconsistent enforcement, lengthy freeze periods, and financial disenfranchisement without due process.
“The indulgence of this court is therefore sought to (i) direct immediate freezing of the account(s) of the petitioner 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 a transaction related to the sale of jewelry, stated that his written petition was submitted to formulate the rule that the entire bank account or an amount greater than that allegedly involved in a crime should not be frozen just because a suspicious transaction is being followed, unless it is proven that the account holder is complicit in a crime.
“Recognizing the increasing frequency of such cases”, the defense urged the court to “frame guidelines to save the common man 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 cases of similar nature where cyber cells issue notices to freeze accounts.”
