Protect Cybercrime Victims From Indefinite Freezing Of Bank Account: Allahabad High Court To Centre

Amid rising cybercrime incidents and freezing of bank accounts of victims, the Allahabad High Court has asked the Central Government to work out a solution for cybercrime victims, whose personal details are exploited to commit crimes and whose bank accounts remain frozen indefinitely. The court was hearing a petition filed by a builder whose bank accounts were blocked after his son’s credentials were misused. The court expressed concerns for people trapped by fraudsters and their consequent struggle in using their bank accounts.  Considering the need for a structural policy in this regard, it has impleaded the Union of India, Ministry of Home Affairs, in the case as a respondent to address the issue.

The petitioner (builder) faced severe business disruption due to the cyber fraud that targeted his family. The builder’s son mistakenly clicked on a link sent by a cybercriminal and shared his Aadhaar details and other credentials. The cybercriminals then started using his credentials to commit further crimes and dupe other citizens through bank transactions. This led to the freezing of all bank accounts of the petitioner.

Although the petitioner had lodged the FIR himself in 2020, his bank account remained blocked, which prevented him from conducting business. As per the Live Law report, he previously approached the High Court seeking de-freezing of his accounts. He got the court permission to apply to the Unique Identification Authority of India (UIDAI) for a new Aadhaar card. However, despite the updated biometrics and a new mobile number, his existing bank accounts have yet to be de-frozen.

During the proceedings, the bench noted the gap in policy because of which innocent citizens have to suffer when their bank accounts are frozen following an identity theft. A division bench comprising Rajan Roy and Justice Subhash Vidyarthi observed that an effective mechanism must be established to resolve this issue. The bench remarked that the concerned ministries and departments should come up with a solution, and victims of cyber fraud should not be left perpetually waiting for de-freezing of their accounts.

Reportedly, the counsel for the opposite parties (banks) informed the court that the bank had contacted the cyber cell, but upon receiving no instructions, the freezing was discontinued. The High Court directed the two concerned banks to contact the cyber cell

again to confirm the status of the pending criminal cases and make efforts to resolve the matter under the law.

The court also directed the petitioner to implead the State of Uttar Pradesh through the Additional Chief Secretary or Principal Secretary (Home), the Commissioner of Police, Lucknow, and the Station House Officer of Vibhuti Khand Police Station as parties in the case proceedings.

The matter has been listed after four weeks as a fresh matter to review the government's stance. The court’s order underscored the need for regulatory clarity to protect cybercrime victims when their credentials are compromised.