Bank freezing limited to requisitioned amount; follow SOP grievance mechanism unless cybercrime suspicion proven.

2. The learned Counsel for the Respondent/Bank, after getting instructions from the Bank, confirmed that the Bank has received the Requisition from the Respondent No.4 for an amount of Rs.3,360.87 for marking lien/freeze in the account of the Petitioner mentioned in the Writ Petition, and hence, the Bank has effected the freezing of the account of the Petitioner. Apart from that, the Bank has prevented the operation of the account of the Petitioner since the Bank is having suspicion with respect to the operation of the account.

3. The issue with respect to the freezing of the bank account at the requisition of the police authorities is covered by the decisions of this Court inDr. Sajeer v. Reserve Bank of India [ 2024 (1) KLT 826 ],Nazeer K.T. v. Manager, Federal Bank, Makkaraparamba Branch [2024 KHC 768] andAbhiraj Rajan v. State of Kerala [ 2025 KHC 1676 ]. This Court has been consistently issuing the directions to the effect that the Bank is to permit the account holder to operate his account limiting the lien to the amounts shown in the Requisitions received by the Bank so long as the Bank does not have any suspicion that the account is used for any financial cybercrime activities or money mule activities, making the frozen/lien marked amount at the disposal of the jurisdictional Magistrate’s Court. Recently, the Indian Cyber Crime Co-Ordination Centre of the Ministry of Home Affairs of the Government of India has formulated anSOP for NCRP – CFCFRMS, Custody, Restoration of Money and Grievance Redressal 2026 to establish a fair and transparent system that prescribes a uniform process to be followed by all the Participating Entities. The SOP includes procedures to prevent misuse of the system of putting on hold an amount, seizure of an account and any property to help the victims of Cyber-Enabled Financial Crimes (CEFC), and to give interim custody of the amount to the victim and restoration of such property while ensuring accountability of all the participants for their action and inaction and providing avenues for time-bound grievance redressal for parties affected by actions taken based on information provided by the system. It is intended that States and UTs, working with other Participating Entities, follow the SOP and are successful in preventing defrauded money from leaving the financial system, giving interim custody and restoration of the amount to the victim, and, in the process, help create a cybercrime-resilient financial ecosystem. Clause 10 of the SOP provides for a time-bound Grievance Redressal Mechanism for the Account Holders in whose accounts the amounts are put on hold or whose account operation is suspended. It is for the Petitioner to work out his remedies in accordance with Clause 10 of the SOP, with respect to the frozen/lien/hold amount.

4. With respect to the prevention of operation of the Account of the Petitioner by the Bank without any requisition from any Police Authorities, this Court has laid down certain guidelines to be followed by the Bank in Abdul Azeez v. Union of India [ 2025 KLT OnLine 3447 ]. The above SOP does not deal with the prevention of accounts by the Bank on its own suspicion without any requisition from any authority. Hence, the Respondent/Bank is to follow the guidelines inAbdul Azeez (supra) since the Bank has stopped the operation of the account, entertaining suspicion.

5. Accordingly, this Writ Petition is disposed of with the following directions:

i. The Respondent/Bank is directed to provide details of the suspicious transactions to the Petitioner within one week from the date of receipt of a copy of this judgment to enable the Petitioner to submit his expla- nation and is further directed to act in accordance with the guidelines laid down by this Court in Abdul Azeez (supra)

ii. If the Respondent/Bank is satisfied with the explanation submitted by the Petitioner for the suspicious transactions, the Respondent/Bank is directed to confine the freeze/lien/hold to the afor