Banks must limit account freezes to requisitioned cyber fraud amounts and share details for internal lien by account holders.

JUDGMENT

Petitioner is a Service Co-operative Bank, which has filed 1.

this Writ Petition challenging the lien/hold/freeze effected in its account and seeking a direction to the Respondent No.1/Bank to remove or lift the lien/hold/freeze effected in the account maintained by the Petitioner/Co-operative Bank with the Respondent No.1. The Respondents Nos.2 to 16 and 18 are various Police Authorities which are made parties in the Writ Petition alleging that they have issued Requisitions for lien/freeze/hold with respect to the account of the Petitioner/Co-operative Bank maintained with the Respondent No.1.

This Court had considered a similar issue in 2.

Kunnamangalam Co-operative Rural Bank Ltd. (M/s.) v. Inspector of Police, Cyber Police Station South Region, Brihan [2026 KHC 179], and the Petitioner/Co-operative Bank is also entitled to get the same directions.

Learned Standing Counsel for the Respondent No.1 3.

submitted that the Respondent No.1 received the requisitions from the Respondents Nos.2 to 16 and 18 for a total amount of Rs.14,89,115/-. In view of the said submission, the Petitioner/Co-operative Bank can be permitted to operate its account maintained with Respondent No.1, limiting the lien/hold/freeze to Rs.14,89,115/-. In order to enable the Petitioner/Co- operative Bank to identify the accounts of its Account Holders which are involved in the disputed transactions and to effect corresponding lien/hold/freeze for the amounts stated in the Requisitions, Respondent No.1/Bank has to furnish all the details of the Requisitions, including the transaction IDs, to the Petitioner/Co-operative Bank. On getting those details, it is for the Petitioner/Co-operative Bank to act swiftly and effect lien/hold/freeze for the amounts shown in the Requisitions in the respective accounts of its Account Holders in order to prevent loss of the disputed amounts from the financial system.

Accordingly, this Writ Petition is disposed of with the 4.

following directions:

The Respondent No.1/Bank is directed to permit the i) Petitioner/Co-operative Bank to operate the account maintained by the Petitioner/Co-operative Bank with the Respondent No.1, limiting the lien to Rs.14,89,115/-.

The Respondent No.1/Bank is directed to i) communicate the details of the requisitions, including the transaction IDs, to the Petitioner/Co- operative Bank so as to enable the Petitioner/Co- operative Bank to effect lien/hold/freeze for the amounts shown in the Requisitions in the respective accounts of its Account Holders. The Petitioner/Co-operative Bank is directed to ii)

effect lien for the amounts shown in the Requisitions so communicated by the Respondent No.1/Bank in the respective accounts of its Account Holders.

In case of receipt of future Requisitions by the iii) Respondent No.1 with respect to the account of the Petitioner/Co-operative Bank maintained with the Respondent No.1, the Respondent No.1 shall continue to permit the Petitioner/Co-operative Bank to operate its account, limiting the lien/hold/freeze to the amounts shown in the Requisitions.

In case of receipt of future Requisitions also, the iv) Respondent No.1 shall immediately forward all the details to the Petitioner/Co-operative Bank and the Petitioner/Co-operative Bank shall effect the corresponding lien/hold/freeze in the respective accounts of its Account Holders.

The amounts which are kept under lien/hold/freeze v) in the account of the Petitioner/Co-operative Bank maintained with Respondent No.1 shall be subject to the Orders passed by the jurisdictional Magistrate.

If the Respondent No.1 receives any Court Order to vi) transfer the lien amount from the Account of the Petitioner/Co-operative Bank, the same shall be done only after giving sufficient Notice to the Petitioner/Co-operative Bank in order to enable the Petitioner/Co-operative Bank to challenge the same, if required.

Petitioner/Co-operative Bank is given liberty to vii) challenge the Requisitions for lien/hold/freeze if no further communic