The Supreme Court has issued notice on a writ petition under Article 32 challenging arbitrary freezing of bank accounts by state Cyber Cells without prior notice, judicial scrutiny, or strict safeguards, and seeks uniform nationwide guidelines regulating such actions.
NEW DELHI: The Supreme Court issued a notice regarding a writ petition filed under Article 32 of the Constitution. The petition challenges the arbitrary freezing of bank accounts by Cyber Cells in various states without prior notice, judicial oversight, or procedural safeguards.
It seeks to establish uniform nationwide guidelines to regulate such actions.
The Bench, comprising Justices Pankaj Mithal and SVN Bhatti, has scheduled a hearing for next week after notifying the Union of India.
The petitioners, Vivek Varshney and Sudhir Kumar, represented by AoR Tushar M. Khairnar, claim that their bank accounts were frozen by the Cyber Cell of the state police without any notification, communication, or judicial approval, resulting in what they term complete financial paralysis.
The petition asserts that this action has hindered their ability to fulfill essential personal and professional responsibilities, including the payment of daily expenses, taxes, and other financial obligations, thereby violating their fundamental rights under Articles 19(1)(g) and 21 of the Constitution.
The petition argues that the freezing of accounts is clearly illegal and unconstitutional, as it infringes on mandatory statutory safeguards established by criminal procedure law.
It specifically cites Section 106(3) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which corresponds to Section 102(3) of the Code of Criminal Procedure, requiring that any seizure or freezing of property be promptly reported to the jurisdictional Magistrate.
The petitioner contends that no such reporting took place in this instance, making the freezing order jurisdictionally invalid and arbitrary.
The plea further highlights a systemic issue, pointing out the lack of a uniform Standard Operating Procedure (SOP) for freezing and de-freezing bank accounts during cybercrime or financial investigations.
Consequently, citizens across various states face inconsistent practices, prolonged account freezes without timeframes, and loss of access to their funds without due process.
The petition argues that merely tracing a “suspicious transaction” to an account cannot justify freezing the entire bank account or amounts far exceeding the alleged criminal proceeds, unless the account holder is proven to be involved in the offense.
It calls on the Court to create a binding rule that balances investigative needs with individual rights, ensuring proportionality and accountability in such coercive measures.
The petitioners have sought several remedies from the Supreme Court, including the immediate de-freezing of their bank accounts, the establishment of uniform guidelines for freezing and unfreezing accounts during cybercrime investigations, and directives for the Ministry of Home Affairs and the Reserve Bank of India to develop a comprehensive nationwide SOP.
The plea emphasizes that the lack of time limits and oversight mechanisms has resulted in widespread misuse of freezing powers, leading to undue harassment of ordinary citizens.
To highlight the constitutional importance of access to banking services, the petition references the Supreme Court’s judgment in Internet and Mobile Association of India v. Reserve Bank of India [2020] 2 SCR. It notes that the judgment recognized banking channels as the “lifeline” of trade, business, or profession, particularly in a time of restricted cash transactions and increasing digitization.
The ruling established that depriving a person of the ability to operate a bank account effectively disrupts their livelihood, placing a burden on the State to justify such restrictions in the public interest.
The plea asserts that arbitrary account freezing, without notice or judicial review, undermines personal liberty and economic freedom. It urges the Supreme Court to fulfill its constitutional duty to protect citizens from executive overreach and ensure procedural fairness in cybercrime enforcement throughout the country.
Case Title: Vivek Varshney & Anr Vs Union of India & Ors.