If you are stuck in such a situation, here is what to do.

Mr. Sameer Verma, a resident of Jaipur, Rajasthan, found himself in a difficult situation. His account with Premier National Bank was suddenly frozen. Upon inquiring, he discovered that it was due to an FIR registered at a police station in Bhopal, Madhya Pradesh. The FIR was filed against a person named Mr. Rohan Gupta, who was allegedly involved in a financial fraud. Mr. Verma had recently completed a peer-to-peer (P2P) cryptocurrency transaction with Mr. Gupta through the ‘DigitalCoin Hub’ platform.

Mr. Verma had no personal connection with Mr. Gupta. The crypto exchange platform had matched them for the trade, and the transaction was executed according to the platform’s standard secure procedures. He had no way of knowing that the funds he received were allegedly from a fraudulent source. When he contacted the investigating officer in Bhopal, he was told that he would need a court order to get his account unfrozen. This left Mr. Verma wondering if he could resolve the matter from his local court in Jaipur or if there was any online procedure, given the distance and the fact that the case was registered in another state.

Advice in such cases

If you find your bank account frozen under similar circumstances, it is crucial to act systematically and promptly. Panicking will not help; a structured approach is necessary.

• Gather all relevant documents, including your bank statements, transaction history from the crypto exchange, KYC details provided to both the bank and the exchange, and any communication related to the transaction.
• Contact your bank’s branch manager and request a formal written communication explaining the reason for the account freeze. They will likely provide a copy of the notice received from the law enforcement agency.
• Contact the Investigating Officer (IO) of the police station where the FIR is registered. Politely explain your side of the story and express your willingness to cooperate with the investigation.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

The legal framework for such situations primarily involves provisions from the new criminal laws of India.

• Section 104 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS): This section empowers a police officer to seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence. A bank account is considered ‘property’ in this context, and the police can direct the bank to freeze it during an investigation.
• Section 318 of the Bharatiya Nyaya Sanhita, 2023 (BNS): This section deals with the offence of cheating. The original FIR against the fraudster is often registered under this section. As your account is linked in the money trail, it gets caught in the investigation.

If you are the complainant

If you are the original victim of a fraud who has filed the FIR:

• Ensure your FIR is detailed and provides a clear sequence of events. Mention all known details about the fraudster.
• Submit all documentary and electronic evidence to the police, such as transaction records, screenshots, and communication records.
• Regularly follow up with the Investigating Officer to know the status of the investigation and the steps being taken to recover the funds.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

If your account has been frozen and you are an innocent party caught in the middle:

• You are a victim of circumstance. Your primary goal is to prove your bona fides and get your account defrozen.
• Prepare a detailed representation addressed to the concerned police officer, explaining your case with all supporting evidence. This shows your cooperation.
• The most effective remedy is to file an application in the jurisdictional court (the court in the city where the FIR is registered) to defreeze the bank account.
• Your application should clearly state that you are an innocent party, the transaction was legitimate from your end, and the freezing of your account is causing you immense hardship.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

In cyber fraud investigations, police often adopt a wide-net approach. They trace the money trail and issue notices under Section 104 BNSS to freeze every account through which the money has passed. They do this to prevent the dissipation of funds. They may not immediately distinguish between the main accused and innocent intermediaries. The police will almost always insist on a court order to defreeze an account to avoid any liability on their part. This is standard procedure.

FAQs people normally have

Can I approach my local court to unfreeze the account?

Generally, no. The jurisdiction to hear the matter lies with the court that has authority over the police station where the FIR was registered. In the example, Mr. Verma would have to approach the appropriate court in Bhopal, not Jaipur.

Is there an online option for court procedures?

While many courts in India have enabled e-filing, the process is not entirely remote. You will need to hire a local lawyer in that city to represent you, file the application, and argue the matter in court. Your physical presence may or may not be required, depending on the court’s direction.

Why was my account frozen if I am innocent?

Your account was frozen because it was part of the money trail originating from a crime. The police’s initial action is to secure the funds. Proving your innocence is the next step, which needs to be done before the court.

What evidence is required?

To prove your case in court, you will need to compile a comprehensive set of documents:

• A copy of the notice from the police/bank regarding the account freeze.
• Your detailed bank account statement showing the credit from the transaction and your other regular transactions.
• Complete transaction history from the cryptocurrency exchange, proving it was a P2P trade.
• KYC (Know Your Customer) documents you submitted to both the bank and the crypto exchange.
• An affidavit clearly stating the facts of the case, asserting your innocence, and explaining the hardship caused by the frozen account.

How long will the investigation take?

Police investigations into cybercrimes can be lengthy, often taking months or even years. Waiting for the police to conclude their investigation and clear your name is not a practical option. Filing an application in court to defreeze the account is a much faster and more proactive approach. A court can pass an order to defreeze the account within a few weeks to a couple of months, depending on the specifics of the case and the court’s schedule.

Advocate Sudhir Rao, Supreme Court of India