Mere Complaint Through MHA Cybercrime Portal Cannot Justify Freezing Of Bank Accounts: Calcutta High Court

The Calcutta High Court has held that bank accounts cannot be frozen merely on the basis of complaints received through the Ministry of Home Affairs' cybercrime portal, without any order from a competent court under the Bharatiya Nagarik Suraksha Sanhita (BNSS).Justice Krishna Rao directed the immediate defreezing of the accounts of Xenixt Technologies Private Limited after finding that neither the bank nor the authorities could show any judicial order authorising the freezing action.“The bank has freezed the accounts without any order of the Court and only on the basis of the report through the portal,” the Court observed.The petitioners approached the High Court alleging that five of their bank accounts had suddenly been frozen in October 2024 pursuant to instructions allegedly issued by authorities through the Ministry of Home Affairs portal. Senior Advocate Ayan Bhattacharjee, appearing for the petitioners, argued that the accounts had been frozen without any court order or statutory authority, severely affecting the company's operations.Reliance was placed on several recent decisions including Sanjay Gupta v. State of West Bengal, Malabar Gold and Diamond Limited v. Union of India, Kartick Yogeshwar Chatur v. Union of India and Headstar Global Pvt. Ltd. v. State of Kerala, to contend that freezing of bank accounts cannot be done mechanically on the basis of cybercrime complaints.The respondent bank submitted that it had acted upon complaints received through the Ministry of Home Affairs portal. During the hearing, the Court directed impleadment of the Ministry of Home Affairs as a party. However, counsel for the Union of India informed the Court that despite repeated requests, no instructions had been received from the authorities.Referring extensively to the Bombay High Court's ruling in Kartick Yogeshwar Chatur, which relied on the Kerala High Court's judgment in Headstar Global, the Court explained the distinction between “seizure” under Section 106 BNSS and “attachment” under Section 107 BNSS.The Court noted that while seizure of property for purposes of investigation may be carried out by police officers subject to reporting requirements, attachment of property, including freezing of bank accounts to secure alleged proceeds of crime, requires prior orders from a Magistrate under Section 107 BNSS.Justice Rao observed that the rationale behind the distinction is that seizure is aimed at preserving evidence during investigation, whereas attachment is intended to prevent disposal of suspected proceeds of crime and secure them for forfeiture or restitution proceedings.Applying these principles, the Court found that the authorities had failed to demonstrate that any Magistrate's order had been obtained before directing freezing of the petitioners' accounts.“In the present case also the bank or the Union of India failed to satisfy that any of the authorities have obtained any order from the concerned Court for freezing of the accounts of the petitioners,” the Court recorded.Accordingly, the Court directed the bank to “immediately defreeze” the accounts and permit the petitioners to operate them.Case Title: Xenixt Technologies Private Limited & Ors. v. Reserve Bank of India & Ors.Case No.: WPA 8453 of 2025Click here to read order

Mere Complaint Through MHA Cybercrime Portal Cannot Justify Freezing Of Bank Accounts: Calcutta High Court

Srinjoy Das

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Srinjoy Das

Mere Complaint Through MHA Cybercrime Portal Cannot Justify Freezing Of Bank Accounts: Calcutta High Court

Srinjoy Das

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Srinjoy Das

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