Karnataka High Court disposes plea on bank account freezing issue in cybercrime cases as MHA is framing SOP to remedy situation

Taking note that the Ministry of Home Affairs (MHA) is in the process of a Standard Operating Procedure (SOP), the High Court of Karnataka on Thursday disposed of a PIL petition, which has sought direction for creation of a uniform guideline/SOP for issuance of bank account freeze orders, debit restrictions and lien markings in cybercrime cases.

A Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha disposed of the petition, filed by Pavan Vijay Sharma of Bengaluru.

Arbitrary freezing

The petitioner had complained about widespread systematic and recurring problems of ‘arbitrary’ freezing of bank accounts and multiple lien marking imposed by various investigating agencies in cyber fraud investigation, causing severe hardship to bank account holders due to lack of methods to distinguish victims, accused persons and third parties.

During the hearing, Deputy Solicitor General of India Shanti Bushan H. told the Court that MHA has already circulated a draft Standard Operating Procedure (SOP) for National Cyber Reporting Platform (NCRP)-Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS), Custody, Restoration of Money and Redressal Grievance among the State governments and other stakeholders. The bench was also informed that the Ministry would finalise the SOP after completion of consultation process with the stakeholders.

Prior verification

The petitioner had also sought a direction from the court to the authorities to ensure that no bank account is frozen or subjected to lien without prior verification of the account holder’s involvement in the alleged offence, recording of reasons for such action, and mandatory service of notice/intimation to the account holder within a reasonable time.

However, the Bench said that no order is required to be passed in the petition as process is already under way to prepare a SOP. Meanwhile, the Bench clarified that disposal of the petition would not come in the way of any individuals or entities from seeking remedies on frozen accounts as per the law.