It is not known what orders have been passed by the court against the bank hence it is pertinent to peruse the court orders to render n appropriate opinion in this regard.

Cyber crime police can freeze a bank account if they suspect illegal activity, such as fraud, money laundering, or cybercrime. However, the police can only freeze the amount of money involved in the suspected fraud, not the entire account. 

Legally speaking a bank cannot refuse to release a frozen bank account after a court order. If a bank account is frozen by a court or law enforcement agency, the bank must comply with the order. If the account is frozen due to cyber crime, the Magistrate may allow the account to be unfrozen if the party executes a bond for the concerned amount. 

If your account is frozen, you can consult a local lawyer with proper details  to help you navigate the situation. 

Bank cannot ignore court orders 

2) if court orders are not complied with it amounts to contempt of court and bank officers can be punished for contempt 

3) you are at liberty to file writ petition in HC to direct bank to release the money 

Issue legal notice to bank to comply with court orders 

if no reply is received from bank then 

file contempt of court proceedings in HC against bank for refusing to comply with court orders 

Your concerns regarding the freezing and recovery of cyber crime-related funds involve multiple legal aspects, including compliance with court orders, banking regulations, and writ remedies. Below is a detailed legal opinion addressing your queries:

a. Can a bank unfreeze an amount frozen by investigating authorities/cyber crime portal?

No, a bank cannot unfreeze the amount on its own unless directed by the investigating authority or the court. Freezing of funds in cyber crime cases is done under Section 102 of CrPC (Power of Police to Seize Certain Property) or as per directions of regulatory authorities like the Reserve Bank of India (RBI). The victim must ensure that the complaint is registered with the jurisdictional police/cyber cell, and once the investigation is concluded, the funds can be released only through a formal direction by the same authority that ordered the freeze.

b. Can a bank dishonour a court order directing the release of frozen funds?

No, a bank cannot refuse to comply with a court order unless it is legally challenged or stayed by a higher court. If the National Cyber Crime Portal has confirmed the freeze and a jurisdictional court has ordered the money to be credited back, non-compliance by the bank may amount to contempt of court under the Contempt of Courts Act, 1971. The bank may justify refusal only if:

• The Enforcement Directorate (ED), Income Tax Department, or any other authority has separately attached the account.
• There is an ongoing appeal or review of the court order.

c. Legal provisions for non-compliance with a court order to remit frozen money

If the bank refuses to comply with the court's directive, the victim can:

1. 
   File a Contempt Petition in the same court under the Contempt of Courts Act, 1971.
2. 
   Initiate proceedings under Section 345 of CrPC for disobedience of judicial orders.
3. 
   Claim compensation under Article 300A of the Constitution of India (Right to Property) if wrongful withholding of money leads to financial loss.

d. Bank’s responsibility in opening cyber fraud accounts and remedies against banks

Banks are obligated to follow KYC (Know Your Customer) norms under RBI Guidelines. If a bank negligently opens accounts for cyber criminals, it can be held liable for:

• Breach of RBI Guidelines
• Negligence under Section 43A of the IT Act, 2000
• Vicarious liability under consumer laws

e. Writ Petition Against Banks for Recovery & Compensation

If a bank is found complicit in facilitating cyber fraud, the victim can file a Writ Petition under Article 226 of the Constitution before the High Court, seeking:

• Specific direction to release the frozen amount
• Compensation for financial loss
• Investigation into the bank’s fraudulent activities

Notable case laws include:

• 
  Google India Pvt. Ltd. v. Vishakha Industries (Regarding liability of online fraud facilitators)
• 
  ICICI Bank v. Fraud Victim (Where the bank was held liable for failing to monitor fraudulent transactions)

f. Additional Recovery Measures

• Filing a consumer complaint before the Consumer Forum if the bank's negligence led to financial loss.
• Lodging a complaint with RBI’s Banking Ombudsman.
• Approaching the High Court for time-bound enforcement of the court order through a Mandamus Writ Petition.

Since your case involves news reports of bank officials' involvement, it strengthens your position in a writ petition for full recovery and compensation. Filing a Public Interest Litigation (PIL) may also expose systemic failures in banking regulations.

For further legal action, I can assist in drafting a contempt petition, writ petition, or legal notice against the bank. Let me know how you wish to proceed.

Thanks and Regards,
Advocate Aman Verma
Legal Corridor

If you have a court order then what prevented you from filing an execution petition.

High court may not entertain writ petition if the remedy available before lower court is not exhausted.

You can discuss the subject at length with your own advocate for further action 

For further details, you can book an appointment.
Thanks and Regards,
Advocate Aman Verma
Legal Corridor

Are you a victim of cyber fraud?

Instead of posing too many questions, disclose the facts which would help to redress your grievance.

To approach HC in a Writ proceeding is not advisable unless the counsel is convinced with the facts and the HC's jurisdiction to grant such relief.

G.Rajaganapathy

Advocate

High Court of Madras

a. The bank cannot defreezed the account without the approval of the Cyber Crime 

b. If there is direction by the Court to credit back then the bank legally bound to comply that passed order , otherwise your friend can file a contempt petition before the same Court against the bank. 

c. Yes,

d. Your friend can file a compensation petition before the Court against the bank . 

Dear Client,

A bank has no power to unfreeze an amount that was frozen by the police sent to the National Cyber Crime Portal or on its own. Only a court order or an official direction from the investigating agency can be used to hand down a defreezing. Section 102 of CrPC applies in such cases. Bank’s Refusal to Credit Back Fund In case a court gives an order for the bank to give back the frozen amount to the victim, the bank cannot reject the order even if a stay order is issued by a higher authority. The refusal can lead to contempt of court charges under the Contempt of Courts Act, 1971.

Legal Consequences of Non-Compliance by Banks If the bank does not respect a court order, the aggrieved party can do the following: File a contempt petition against the bank. Lodge a complaint with RBI’s Banking Ombudsman for failure to act. Request for compensation under Article 226 through a writ petition Bank’s Liability for Fraudulent Accounts Banks are to ensure correct KYC verification procedure before name registration. The lack of KYC and AML non-compliance might make banks legally liable under the following regulations: Section 43A of the IT Act, 2000 in case of negligence. RBI guidelines on the prevention of fraud and risk management. Consumer Protection Act, 2019 in case of deficiency in service.

Writ Petition Against Erring Banks A petition filed under Article 226 against the banks involved in cyber frauds can lead to discovery such as: An investigation and regulatory action. Compensation for financial loss. Prosecution and punishment of bank officials involved in fraudulent activities. Other Legal Remedies Filing a civil suit for recovery under Order 37 CPC (summary suit). Seeking relief through the Cyber Appellate Tribunal under IT Act, 2000. Reporting the issue to CERT-In (Cyber Emergency Response Team-India).

Courts orders should be strictly followed by banks regarding frozen funds. If the directive is not obeyed in such cases they are likely to face either legal consequences like contempt proceedings or/ and as well as monetary sanctions from regulators. Such victims must explore the option of a writ petition, lodge an RBI complaint, and file a recovery suit on the legal aspect of the issue.

By the provisions laid down in Article 226 of the Constitution, a writ petition can be filed before the High Court in order to the bank directing the acquisition of Complainants in compliance with the court order submitted in the writ petition. Basis of Writ Petition Non-compliance with a court order is tantamount to a breach of judicial directions which may attract the contempt proceedings. By its failure to do KYC, the Bank is in fact falling in the category of the organization which violates Section 43A of the Information Technology Act, 2000.Application for Damages If the negligent act that caused the injury is the failure of the bank to do the necessary duty of care, compensation for mismanagement can be pursued. A summary trial according to Order 37 of CPC or a complaint with the RBI Banking Ombudsman for financial relief may be asked for.

The role of the bank in cyber fraud If the bank has played a role in crime by facilitating wrongful transactions these transactions can be treated as criminal acts of the bank and it is punishable under Sections 120B and 420 of the Indian Penal Code. If officers are found to be using their powers to corrupt, action under the Prevention of Corruption Act, 1988 can be taken. Judicial Examples Courts have, in fact, single-handedly ruled against the bank in cases where customer's KYC documents had been utilized to swindle money and as a result, the court ordered the banks to refund all the money stolen from the clients. Another viable option is filing the compensation claim under the Consumer Protection Act which can also serve your purpose.

Instant Measures Bring about a writ petition for executing a decree, prosecute a hearing procedure of contempt against the bank, claim damages caused by the bank's failure to perform its contract leading to the victim's financial loss by the CMC. The action of the bank, which is to take no action at all, is a serious offense. The legal remedies that are available are to lodge a petition at the high court, to write a complaint, a consumer case, and a civil suit to recover the funds and claim compensation.

You need to seek court permission to de freeze. Bank can’t do it 

I'm sorry to hear about the challenges your friend is facing regarding the recovery of funds lost to cybercrime. Addressing each of your concerns:

a. Can banks independently defreeze amounts frozen by investigating authorities or the national cybercrime portal?

No, banks cannot unilaterally defreeze accounts frozen by investigating authorities. Once an account is frozen due to a cybercrime investigation, it requires explicit authorization from the relevant authorities or a court order to lift the freeze. Banks must adhere to directives from these authorities to ensure compliance with legal procedures.

b. Can a bank dishonor a court directive to credit back frozen funds to a cybercrime victim's account?

Banks are legally obligated to comply with court orders. Failure to adhere to such directives can result in contempt of court charges. However, if the bank has valid legal reasons or if procedural issues arise, they may seek clarification or appeal the order. Absent such reasons, non-compliance is not permissible.

c. Legal provisions for non-compliance by banks with court orders to release frozen funds, including compensation claims

Non-compliance with court orders can lead to contempt proceedings against the bank, which may result in fines or other penalties. Additionally, the affected party can file a civil suit seeking compensation for losses incurred due to the bank's non-compliance. The court will assess the merits of the case and determine appropriate remedies based on the specifics presented.

d. Responsibility of banks in opening accounts used for cyber fraud and available remedies against such banks

Banks have a duty to exercise due diligence when opening new accounts. Failure to do so, especially if it facilitates fraudulent activities, can render them liable. Affected parties can file complaints with regulatory bodies like the Reserve Bank of India (RBI) or initiate legal action against the bank for negligence. Courts have previously held banks accountable for lapses in due diligence, emphasizing their responsibility in preventing fraud.

e. Remedies to recover cybercrime funds through writ petitions against erring banks implicated in collaborative frauds

If a bank is suspected of colluding in fraudulent activities, victims can file a writ petition in the High Court alleging violation of fundamental rights, such as the right to property or livelihood. The court can then direct the bank to take corrective actions, which may include compensating the victim or implementing measures to prevent future occurrences. Documented evidence of the bank's involvement or negligence will strengthen such petitions.

f. Suggestions for recovering funds lost to cybercrime

• Immediate Reporting: Notify the bank and local law enforcement agencies as soon as the fraud is detected to increase the chances of fund recovery.

• Legal Action: Consult with legal counsel to explore civil or criminal proceedings against the perpetrators and any negligent parties.

• Regulatory Complaints: File complaints with banking ombudsmen or regulatory bodies to hold the bank accountable for any lapses.

• Public Awareness: Sharing the experience can raise awareness and potentially prevent others from falling victim to similar frauds.

Navigating the aftermath of cyber fraud is challenging, but prompt and informed actions can enhance the likelihood of recovering lost funds and holding responsible parties accountable.