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

Mr. Sameer Verma runs a legitimate business, “Verma Industrial Parts,” in Vikaspuri, dealing in industrial machinery components. He has a registered GST firm and conducts all his business through a proper current account. Recently, he supplied goods worth a significant amount to a regular client, Mr. Anand Kumar, and issued a valid GST invoice for the transaction. Mr. Kumar made the payment via UPI, which was duly credited to the firm’s current account.

A few weeks later, Mr. Verma was shocked to receive a notification from his bank stating that funds equivalent to the transaction amount had been frozen. Upon inquiry, the bank informed him that the action was taken based on instructions from the Alipur Police, following a cybercrime complaint. Mr. Verma tried contacting the Alipur Police, who directed him to their cyber cell. Despite multiple attempts to call the national cybercrime helpline and explain the situation, there has been no resolution. The funds have been blocked for over 20 days, and it appears the original complaint was filed nearly two months ago, indicating that Mr. Verma is an innocent third party caught in a money trail investigation.

Advice in such cases

If you find yourself in a similar situation, it is crucial to act systematically and promptly.

• Gather All Documentation: Immediately collect all relevant documents. This includes the GST invoice for the sale, proof of delivery or transport receipts, your company’s registration documents, and the bank statement showing the credited amount.
• Formal Bank Inquiry: Write a formal letter or email to your bank’s branch manager. Request a written copy of the notice or order based on which they froze your account. This document is crucial as it will contain details of the police station and the case number.
• Contact the Investigating Police Station: With the details from the bank, formally approach the concerned police station. Submit a written representation along with copies of all your documents to prove the legitimacy of your transaction.
• 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 actions is primarily governed by the new criminal laws of India.

• Section 104 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS): This section grants a police officer the power 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. Bank accounts are considered ‘property’ under this section, allowing the police to direct banks to freeze them during an investigation.
• Section 94 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS): Police often use this section to issue notices to banks to produce documents and information related to accounts that are part of a money trail investigation.
• Sections of the Bharatiya Nyaya Sanhita, 2023 (BNS): The underlying cybercrime complaint would likely be registered under sections related to cheating (Section 318 BNS) or other forms of digital fraud. Your account is frozen because it is part of the money trail originating from such an alleged crime.

If you are the complainant

If your business account has been wrongly frozen and you are the aggrieved party (complainant against the freezing action):

• File a Representation: Your first step should be to file a detailed written representation with the Senior Superintendent of Police (SSP) or Deputy Commissioner of Police (DCP) of the concerned district, explaining your side and attaching all evidence.
• Approach the Court: If the police do not provide a satisfactory response or fail to de-freeze the account, your lawyer can file an application before the jurisdictional Magistrate’s court. The application would seek the de-freezing of the bank account on the grounds that you are a bona fide business owner who has received funds for a legitimate transaction.
• 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 you are the original victim of the cyber fraud who filed the complaint:

• Follow Up Consistently: Regularly follow up with the investigating officer of your case. Provide any additional information they may require.
• Preserve All Evidence: Keep records of all your communications with the fraudster, transaction details, and complaint numbers.
• Cooperate with Authorities: The police will trace the money trail, which often passes through multiple accounts. Your cooperation is key to helping them reach the final beneficiary of the fraud.
• 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

When a cybercrime complaint involving financial fraud is filed, the police’s immediate priority is to prevent the stolen money from being withdrawn. They quickly trace the money trail from the victim’s account. As the money moves through various accounts, the police issue freezing orders for each account in the chain to preserve the funds. They often do not differentiate between fraudulent accounts and the accounts of legitimate businesses that may have unknowingly received the tainted funds. The process of verifying the legitimacy of each account holder in the chain is often slow, leading to genuine business owners getting stuck.

FAQs people normally have

What evidence is required?

To prove your innocence and get the account de-frozen, you must provide clear and convincing evidence of a legitimate business transaction. This includes:

• A valid, serially numbered GST invoice with the buyer’s details.
• Proof of delivery of goods, such as a signed delivery challan or courier/transport receipt.
• Your firm’s GST registration certificate and other business licenses.
• The bank statement showing the credit of the specific amount against the invoice.
• Any communication records with the buyer (emails, messages) related to the order and payment.

How long will the investigation take?

The timeline for the police to complete their investigation and de-freeze an innocent party’s account can vary drastically. Without proactive follow-up and legal intervention, it can take several months. The police are often overburdened with cases, and de-freezing an account is not their priority. However, by filing a proper representation through a lawyer and, if necessary, moving an application in court, the process can be expedited significantly. A court can direct the police to verify your documents and submit a report, often leading to a much faster resolution.

Advocate Sudhir Rao, Supreme Court of India