Kerala HC: Federal Bank to lift account freeze if police do not name lien amount

The Kerala High Court on 4 November 2026 directed Federal Bank to ask the Bengaluru cyber crime police how much money in a frozen account is actually disputed, and to lift the freeze if the police do not answer within a month. If the police name the amount, the freeze must be confined to that sum.

What Happened

An account holder at the bank's Kondotty branch in Malappuram asked the court to unfreeze the account. According to the order, the account holder is an accused in a case registered by the cyber crime police in Bengaluru under Sections 406 and 420 of the Indian Penal Code, Section 66D of the Information Technology Act, 2000 and Section 21 of the Banning of Unregulated Deposit Schemes Act, 2019, and the case is under investigation. These are allegations, not findings of guilt; the accused are presumed innocent until proven guilty in court, and due process continues.

A Bengaluru sessions court had earlier ordered the account to be unfrozen with only the disputed amount kept under lien, a hold on that sum. But neither that order nor the police requisition to the bank stated any amount, and the police did not appear before the High Court.

The court directed the bank to write to the police within two weeks of receiving the judgment, asking for the disputed amount. The police must reply within one month. If they do not, the bank must lift the freeze, subject to the account holder completing KYC. If they do, the bank must limit the freeze to that amount and allow the account to be operated, again subject to KYC. The bank may act on any future police requisition.

The court said the frozen amount must be dealt with under the 2026 standard operating procedure for custody and restoration of money in cyber-fraud cases reported on the national portal, and that the account holder may use the grievance mechanism in Clause 10 of that procedure.

What It Means

The order shows a court refusing to let an open-ended freeze run on when the police have never named an amount. It sets deadlines for both the bank and the police.

Victims of online fraud can report it at https://cybercrime.gov.in or on helpline 1930.

Source: High Court judgment