Kerala High Court Allows Fraud Victim to Operate Bank Account Despite ₹1.16 Crore Cybercrime Liens

Relief granted in the writ petition

Justice M A Abdul Hakhim disposed of Radhika Menon v Branch Manager and Others, WP(C) 3948 of 2026, by judgment dated 15 October 2026. The Court directed Axis Bank to permit operation of the petitioner's current account notwithstanding 21 requisitions relating to ₹1,16,32,892. It further directed the bank to process any request to close the account without applying those requisitions. The ruling was tailored to the specific evidence and circumstances recorded in the writ petition; it was not a blanket invalidation of all cybercrime-related account restrictions.

Account and alleged loan fraud

The account was maintained in the name of the petitioner's LPG distributorship. She stated that an entity calling itself Zenith Finance had approached her through WhatsApp with a loan offer and obtained account details and identification information. According to her case, the entity then routed disputed transactions through the account without her responsibility for them. She produced WhatsApp communications supporting that account of events. The transactions occurred during a three-day period from 8 to 11 January 2026. The Court assessed these assertions alongside statements filed by the bank.

Bank’s position and the lien amount

The bank reported 21 requisitions creating a total lien of ₹1,16,32,892 and a negative account balance. Its counsel confirmed that no other requisitions affected the account and that the petitioner had promptly informed the bank about the suspected fraud. The bank also reported that orders to transfer amounts to the account of a victim could not be implemented because of the negative balance. These details mattered to the Court's assessment of whether the petitioner should continue to be deprived of ordinary access to her business account.

Judicial findings and directions

On the materials presented, the High Court concluded that the disputed transactions resulted from fraud committed against the petitioner by the entity described as Zenith Finance and that she was not responsible for them. It accordingly directed the bank to disregard the specified requisitions when permitting account operations. Because the petitioner no longer wished to continue the account, the Court separately addressed closure. The order identifies the 21 requisitions and their aggregate amount; it does not purport to adjudicate every complaint involving the alleged fraud network.

Why the decision is significant

Account freezing and lien instructions can protect potential victims and preserve funds during cybercrime inquiries, but they can also disable the ordinary business activities of a person whose account was misused. The judgment illustrates the importance of examining the account holder's actual role, the bank's records and the scope of investigative requests. It should not be read as allowing every account holder to bypass police requisitions by claiming to be a victim. The relief depends on judicial evaluation of the material in the individual case.

Practical consequences and limits

The bank must permit operation and process closure if requested in accordance with the judgment. The order does not declare that every disputed transaction has been recovered, direct criminal prosecution of a named fraudster or determine rights of all third-party complainants. Future disputes over particular transfers would need their own legal basis. For banks and lawyers handling cyber-fraud freezes, the case underlines the need for a precise record of requisitions, prompt reporting and careful separation of innocent account holders from alleged participants in unlawful money movements.

Case Details

Radhika Menon v Branch Manager and Others; WP(C) 3948/2026; Kerala High Court; 2026:KER:79946; judgment dated 15 October 2026.