KUNNAMANGALAM CO- OPERATIVE RURAL BANK LTD. Vs. INSPECTOR OF POLICE, CYBER POLICE STATION SOUTH REGION, BRIHAN

JUDGEMENT

(1.) Petitioner is a Co-operative Rural Bank which has filed this Writ Petition seeking a direction to the Respondent No.22/Bank to remove or lift the lien in the account maintained by the Petitioner with the Respondent No.22. The Respondents Nos.1 to 21 are various Police Authorities which are made parties in the Writ Petition alleging that they have issued Requisitions for lien/freeze/hold with respect to the account of the Petitioner maintained with the Respondent No.22.

(2.) Almost all the Co-operative Banks in the State have been keeping mirror accounts with regular Banks having digital facilities for doing online transactions of their customer Account Holders. They route all the online transactions of their Account Holders through the said mirror account. If the transaction of the Account Holder of the Petitioner is involved in cybercrime and the police authorities issue requisition for keeping the disputed amount under lien/hold/freeze, the same is issued with respect to the account of the Co-operative Bank. Thus, large numbers of liens/holds/freezes are effected in the accounts of the Co- operative Banks for huge amounts for none of their faults. In fact, lien/hold/freeze is to be effected in the accounts of the Account Holders of the Co-operative Bank, which are involved in the cybercrime. Practically, the Requisitioning Authorities get only the details of the account of the Co- operative Bank maintained in the regular Bank through which the cybercrime is committed, and hence they issue Requisitions with respect to the account of the Co-operative Bank maintained in the regular Bank. In such case, it is for the Co-operative Banks to identify the accounts of their Account Holders which are involved in the disputed transactions and have to effect corresponding lien/hold/freeze for the amounts stated in the Requisitions. Otherwise, the Co-operative Banks may lose huge amounts on account of the financial cybercrimes committed by their Account Holders, and it will be a threat to the very existence of the Co-operative Banks themselves. In order to facilitate the Co-operative Banks in identifying the accounts of their Account Holders involved in financial cybercrimes, the regular Banks where the Co-operative Banks maintain mirror accounts have to furnish all the details of the Requisitions, including the transaction IDs, to the Co- operative Banks. On getting those details, it is for the Co- Operative Banks to act swiftly and effect lien/hold/freeze for the amounts shown in the Requisitions in the respective accounts of its Account Holders, in order to prevent loss of the disputed amounts from the financial system.

(3.) Recently, the Indian Cyber Crime Co-Ordination Centre of the Ministry of Home Affairs of the Government of India has formulated a 'Standard Operating Procedure (SOP) for National Cybercrime Reporting Portal (NCRP) - Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS), Custody, Restoration of Money and Grievance Redressal' on 2/1/2026 to establish a fair and transparent system that prescribes a uniform process to be followed by all the Participating Entities. It is stated in the said SOP that the National Cybercrime Reporting Portal (NCRP) was launched in August 2019 by the Ministry of Home Affairs in view of the direction of the Hon'ble Supreme Court of India in the Order dtd. 5/12/2017 in Prajwala v. Union of India and Ors., Writ Petition (Criminal) No. 3 of 2015 to set up a mechanism to prevent and address the issue of circulation of videos related to sexual violence, including rape, gang rape, and child pornography, and to provide a platform for citizens to report such crimes and that subsequently, the scope of the portal was widened to facilitate reporting of all types of cybercrime, including Cyber-Enabled Financial Crimes. The SOP prescribes procedures to prevent misuse of the system of putting on hold an amount, seizure of an account and any property to help the victims of Cyber-Enabled Financial Crimes (CEFC), and giving interim custody of the amount to the victim and restoration of such property while ensuring accountability of all the participants for their action and inaction and providing avenues for time-bound grievance redressal for parties affected by actions taken based on information provided by the system. It is intended that States and UTs, working with other Participating Entities, follow the SOP and are successful in preventing defrauded money from leaving the financial system, giving interim custody and restoration of the amount to the victim, and, in the process, help create a cybercrime-resilient financial ecosystem. The scope of the SOP is stated as follows: