The Madhya Pradesh High Court has directed the State Bank of India to unfreeze a woman’s account, and directed it to place only the disputed Rs 2,01,263.58 in a fixed deposit. That money can be released only on an order of the competent judicial magistrate, Justice Sandeep N Bhatt held on August 31.
The court attached a deadline. The cybercrime police have three months to proceed in accordance with law, “failing which the amount so kept in FD may also be allowed to be withdrawn by the petitioner under intimation to the Police agency.”
Why it matters
Most bank-account-freezing orders this year say the same thing: freeze the disputed amount, not the whole balance. This one goes further. It puts a clock on the investigation, and hands the account holder the money if it runs out.
On January 2, 2026, the Ministry of Home Affairs, through the Indian Cyber Crime Coordination Centre, issued a Standard Operating Procedure for NCRP-CFCFRMS, Custody, Restoration of money and Grievance Redressal. It governs what happens once a portal complaint reaches a bank. The hold applies to the disputed amount received in the beneficiary account. A bank has seven calendar days to upload an account holder’s grievance. The investigating officer must decide within fifteen. 90 days is the outer limit on a hold.
Those timelines are eight months old, and the courts have spent this year ordering people to keep them.
Whose account was frozen
The petitioner told the court that she trades in cryptocurrency/virtual currency. She held accounts with SBI and ICICI Bank. Both were frozen suddenly, she told the court, on intimation from the cyber cells of several police stations. Her counsel submitted that no police station had given her notice, and that someone involved in a fraud appeared to have transferred funds through, or into, one of her accounts.
Peer-to-peer crypto trading means accepting rupees from strangers, and a trader doing that at volume will eventually receive money that turns out to be someone else’s. So will a petrol pump, a kirana shop, or anyone taking UPI from people they do not know.
The court did not clear her. It secured the disputed sum, left it to a magistrate, and set a deadline for the police. This is a proportionality ruling, not a finding of innocence.
Which law is this under
The order records that the cybercrime police are expected to proceed “under Section 102 of CrPC, or any other law on which they are relying.”
Section 102 of the Code of Criminal Procedure, 1973 — the power of a police officer to seize property — was replaced by Section 106 of the Bharatiya Nagarik Suraksha Sanhita when the Sanhita came into force on July 1, 2024. Every other High Court ruling on account freezes this year has turned on Section 106.
Little may hang on it here. The court’s phrasing leaves the source of power open, and the shorthand persists in practice. But Section 106 is the provision on which the High Courts are now openly split.
In November 2025, the Nagpur bench of the Bombay High Court held in Kartik Yogeshwar Chatur v. Union of India that an investigating agency cannot debit-freeze an account under Section 106 at all. Seizure is one thing; attachment requires a magistrate under Section 107.
In April 2026, a division bench of the Allahabad High Court in Ashish Rawat v. Union of India held that no prior notice is owed before a freeze. It capped the power instead: “entire amount lying in a bank account cannot be freezed.”
Neither binds the other. Banks act nationally, on instructions arriving through one central portal.
The pattern behind the order
Justice Bhatt holds this case squarely covered by the same court’s decision in Malcolm Murayis v. State Bank of India. In June, in Dekain Perfect Tech Solutions v. IDFC First Bank, the court recorded the “poor functioning and irresponsible approach” of cyber crime cells. Units that ordered freezes would not answer banks asking why. In July, it framed guidelines in Archana v. State of Madhya Pradesh, where a liquor contractor’s account holding Rs 2.51 crore was frozen over a disputed Rs 980.
In August, the Allahabad High Court in Ritesh Yadav v. Reserve Bank of India held a lien cannot exceed the disputed sum, releasing an account held against Rs 36,000. Days later, the Rajasthan High Court disposed of 105 writ petitions together in Shree Balaji Enterprises v. Reserve Bank of India. A bank, it held, “cannot be used as a substitute for the statutory judicial process.”
One hundred and five petitions, in one state, in one hearing.
The cost is not falling on the people who ran the fraud. In August, the Tamil Nadu Petroleum Dealers Association, representing roughly 5,000 outlets, threatened to stop accepting UPI across the state. Its president said automated detection was flagging dealers’ accounts as suspected mule accounts, some frozen outright.
What is missing
An SOP is an executive instruction. It carries no penalty for an officer who misses the fifteen-day deadline. It carries none for a bank that does not upload a grievance within seven days. The Rajasthan High Court had to order the RBI to issue a circular because nothing obliged it to.
Which leaves the writ petition as the working remedy. Justice Bhatt’s three-month clock is the closest thing yet to an enforceable deadline.
Questions MediaNama has sent to the RBI, the Ministry of Home Affairs and the Indian Cyber Crime Coordination Centre
- How many accounts were frozen or placed under hold on law-enforcement instruction in cyber-fraud matters in 2024-25 and 2025-26? How many were later released?
- How many grievances has the NCRP-CFCFRMS Grievance Redressal Module received since January 2, 2026? In how many was the fifteen-day timeline met?
- How is compliance with the SOP’s timelines monitored, and what follows a failure to meet them?
- Has the RBI issued the circular directed by the Rajasthan High Court, and does it apply beyond Rajasthan?
- The Bombay and Allahabad High Courts differ on whether Section 106 BNSS permits a debit freeze at all. Is any clarification to the SOP under consideration?
- Is any guidance issued on accounts belonging to businesses that take payments from unknown payers, such as crypto traders and retail merchants?
The RBI, the Ministry of Home Affairs and I4C had not responded at the time of publication. This story will be updated if they do.
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