Madras High Court refuses to order defreezing of bank account held by cryptocurrency trader

The Madras High Court has refused to order defreezing of a Chennai-based bank account of an online trader of crypto currency who ended up getting mired in multiple cyber crime complaints lodged with the police in Telangana, Karnataka, Kerala, Gujarat and New Delhi.

Justice P. Velmurugan dismissed the petition filed by B. Kalyan, a software engineer now working in Bengaluru, after advocate Chevanan Mohan, representing HDFC Bank, told the court that the account was frozen following requests received from five different States.

Observing that he was not inclined to issue any direction in a case involving the police departments outside the jurisdiction of the Madras High Court, the judge said, the petitioner would, however, be at liberty to work out his remedy in the manner known to law.

In his affidavit, the petitioner stated that he had obtained a personal loan for ₹35 lakh from HDFC Bank and another ₹24.91 lakh from Axis Bank and purchased 67,873 crypto coins on payment of ₹60 lakh from a leading digital assets company in 2023 and sold them through an online platform.

However, suddenly, he was shocked to find his salary account having been frozen by HDFC bank on the request of the police departments from various States. Hence, he had rushed to the court stating that he was not involved in any wrongdoing and hence freezing of his account was unjustifiable.

On his part, Central Government Standing Counsel L.J. Vengatesh told the court that the Union Ministry of Home Affairs (MHA) had established Indian Cybercrime Coordination Centre (I4C) to provide a framework and eco system for the law enforcement agencies to deal with cybercrime in a coordinated and comprehensive manner.

I4C had, in turn, created a centralised online platform named National Cybercrime Reporting Portal (NCRP) for lodging financial fraud complaints and had also introduced a national toll free helpline number 1930 through which cybercrime complaints could be reported without the need to go to a police station.

Stating that the involvement of I4C ends with coordination, the counsel said, that since ‘police’ was a State subject, it was the law enforcement agencies in the respective States which conduct preliminary inquiry into the complaints and issue notices to the banks for marking a lien over the assets, if necessary.

“Neither the MHA nor I4C has any intervention or administrative control over the marking of lien or freezing of bank accounts. The police officers exercise such powers available under the Bharatiya Nagarik Suraksha Sanhita and they have been advised to exercise the power with due care and caution,” he said.