The Kerala High Court has issued specific directions clarifying the procedure to be followed while freezing mirror accounts of co-operative banks in cyber fraud investigations, while disposing of a writ petition filed by M/S Kunnamangalam Co-operative Rural Bank Ltd.
Justice M.A. Abdul Hakhim permitted the bank to operate its mirror account maintained with ICICI Bank, limiting the lien to Rs 8,59,996, the amount covered under 19 cybercrime requisitions issued by police authorities from various States.
The Court noted that co-operative banks route digital transactions of their customers through mirror accounts maintained with commercial banks. In cybercrime cases, requisitions are often issued against such mirror accounts as transaction trails are reflected there. However, the Court clarified that the actual lien must correspond to the specific customer accounts involved in the disputed transactions, not the entire mirror account.
Directing ICICI Bank to furnish transaction details to enable identification, the Court ordered the co-operative bank to promptly impose corresponding liens in the respective customer accounts. It further directed that future requisitions follow the same mechanism, with lien restricted to the amounts specified.
The Court also observed that the frozen amounts would remain subject to orders of the jurisdictional Magistrate. The petitioner was granted liberty to challenge requisitions if no further communication is received within 90 days, and both the bank and affected account holders may seek remedies under the grievance redressal mechanism provided in the Standard Operating Procedure (SOP) issued by the Ministry of Home Affairs.
