New Delhi: The Supreme Court has directed that a plea seeking a standardized protocol for freezing and de-freezing bank accounts during cybercrime investigations be placed before Chief Justice of India Surya Kant. The matter concerns the need for uniform procedures to prevent arbitrary actions by investigating agencies and safeguard citizens’ financial rights.

A bench of Justices Pankaj Mithal and SVN Bhatti, while hearing the matter, instructed the apex court registry to obtain instructions from the CJI and place the matter before the appropriate bench. The Centre informed the court that the issue was already under consideration in a suo moto matter concerning digital arrests, being overseen by a CJI-led bench.

The court’s order, dated January 16, stated: “Anil Kaushik, ASG, further submits that as far as prayers ‘B’ and ‘C’ are concerned, they are the subject matter of consideration before another bench of this Court in Suo Moto Writ Petition No… In view of the above, the registry to obtain appropriate orders from the Chief Justice of India and post the matter accordingly.”

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The Plea and Its Objectives

The plea, filed by petitioner Vivek Varshney through advocate Tushar Manohar Khairnar, seeks directions to the Centre and the Reserve Bank of India to frame a uniform Standard Operating Procedure (SOP) governing the freezing and de-freezing of bank accounts during cybercrime investigations. The petitioner emphasized the absence of standardized protocols has led to arbitrary actions, inconsistent practices across states, and prolonged freezing periods that violate citizens’ fundamental rights.

Specifically, the plea includes the following prayers:

• Prayer ‘B’: No bank account should be frozen without a written, reasoned order and intimation to the account holder within 24 hours of the action. Moreover, every freezing order should be promptly reported to the jurisdictional magistrate, as mandated under Section 106 of the Bharatiya Nyaya Sanhita (BNSS) and Section 102 of the Criminal Procedure Code (CrPC).
• Prayer ‘C’: Direct the formulation of a uniform SOP by the Centre and the RBI for freezing and de-freezing bank accounts during cybercrime investigations to prevent arbitrary actions and ensure procedural fairness nationwide.

At the outset, Kaushik informed the bench that the Centre had not frozen the bank accounts of the petitioners, who had alleged that freezing actions were taken without prior notice.

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Grievances of the Petitioner

Vivek Varshney’s petition stems from the alleged arbitrary freezing of his bank account by the Cyber Cell of the Tamil Nadu Police without prior intimation or judicial approval. Varshney stated that this action violated his fundamental rights under Articles 19 and 21 of the Constitution, which guarantee the right to freedom and protection of life and personal liberty.

The petition highlighted the severe consequences of the account freeze, noting that it caused complete financial paralysis. Varshney was reportedly unable to fulfill personal and professional obligations, including paying essential expenses, taxes, and liabilities. He argued that such actions were arbitrary, unconstitutional, and without jurisdiction, as they violated statutory mandates requiring immediate reporting to a magistrate under Section 106 of the BNSS and Section 102 of the CrPC.

Varshney’s petition further emphasized that there is no uniform procedure currently in place across India for freezing and unfreezing accounts during cybercrime or financial investigations. Consequently, citizens are often subjected to inconsistent practices, prolonged freezing periods, and deprivation of financial access without due process.

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Need for Procedural Safeguards

The petitioner urged the Supreme Court to direct the immediate de-freezing of his account and establish guidelines to ensure procedural safeguards, proportionality, and accountability in future actions. The plea specifically sought that unless an account holder is proven complicit in a crime, their entire bank account or funds exceeding the amount allegedly involved in a suspicious transaction should not be frozen.

Varshney highlighted the increasing frequency of such cases, pointing out that many individuals suffer undue hardship when cybercrime investigations result in prolonged freezing of accounts based on minor or unrelated transactions. He requested that the court direct the Ministry of Home Affairs and other relevant authorities to formulate a uniform policy and standard operating procedures to prevent unnecessary harassment to the common citizen.

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Background: Legal and Administrative Context

The issue has gained significance as digital and cybercrime investigations have increased in recent years. With banks and financial institutions routinely acting on notices from cyber cells, the absence of a standardized SOP has resulted in inconsistent actions. Some account holders have had their funds frozen for months, even when their involvement in alleged illegal transactions is unproven.

The plea seeks judicial intervention to balance the need for effective investigation with protection of citizens’ financial rights, ensuring that law enforcement does not overreach in the absence of clear procedural safeguards.

On January 6, the Supreme Court had ordered that a copy of the petition be served on the Centre within three days and listed the matter for further hearing the following week.

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Significance of the Case

The case is significant for several reasons:

1. Protection of Fundamental Rights: It raises questions about the protection of citizens’ financial autonomyunder Articles 19 and 21 of the Constitution.
2. Procedural Uniformity: It highlights the need for a nationwide SOP to standardize actions taken by cybercrime units and financial institutions, ensuring consistent treatment of account holders.
3. Judicial Oversight: By seeking reporting to magistrates and written reasoned orders, the plea emphasizes the role of the judiciary in preventing arbitrary actions during digital investigations.
4. Impact on Citizens: Unregulated freezing of accounts can lead to severe personal and professional disruptions, affecting livelihood, payment obligations, and access to essential resources.

The petitioner’s focus on creating clear limits on freezing powers reflects growing concerns over digital-era law enforcement measures and the potential for misuse of authority in cybercrime investigations.

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Next Steps

The Supreme Court has now placed the matter before Chief Justice Surya Kant to determine the appropriate bench to hear the plea. Observers note that the outcome could establish guidelines that affect cybercrime investigations nationwide, balancing law enforcement efficiency with citizens’ rights to access their finances without arbitrary restrictions.

The case also underscores a broader judicial effort to create digital-age safeguards, ensuring that technological and investigative advances do not infringe upon constitutional freedoms.

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