Account must be unfrozen; disputed cyber-fraud amount must remain in fixed deposit pending Magistrate’s order.

The petitioner maintained Account No. 63000169616 with the State Bank of India, Indore Bank Colony Branch.

The account had been frozen pursuant to information or instructions received from cyber-crime agencies alleging that a sum of ₹25,900 credited to the account was connected with cyber fraud.

The petitioner sought a writ directing immediate defreezing of the account.

Relying on Malcolm Murayis v. State Bank of India, W.P. No. 1100 of 2024, decided on 26 April 2024, the petitioner contended that the bank had frozen the account on the instructions of investigating agencies and that the disputed amount could instead be secured separately.

Whether the petitioner’s bank account, frozen pursuant to cyber-crime agency communications, ought to be unfrozen while securing the allegedly disputed amount separately.

Whether the disputed amount of ₹25,900 should be retained in a fixed deposit pending orders of the competent Judicial Magistrate and further action by the investigating agency under the applicable law.

The Court applied the principle laid down in Malcolm Murayis v. State Bank of India, W.P. No. 1100 of 2024, decided on 26 April 2024, that where a bank account is frozen on the instructions of cyber-crime or investigating agencies, the entire account need not remain inoperative if the allegedly tainted amount can be segregated and protected in a fixed deposit.

In Malcolm Murayis, the Court directed that the disputed amount be kept in fixed deposits, subject to liquidation only upon orders of the competent Judicial Magistrate within the stipulated period, while requiring the investigating agency to proceed in accordance with Section 102 of the CrPC or other applicable law.

The present Court adapted that principle to the applicable provisions of the BNSS and directed that the disputed amount be secured in a fixed deposit for three months.

The Court found the present matter materially analogous to Malcolm Murayis, where accounts had been frozen by banks acting on cyber-crime agency instructions and the Court had protected the allegedly tainted amount without continuing the freeze over the entire account.

Applying that precedent, the Court treated ₹25,900 as the amount requiring preservation and directed that it be placed in a fixed deposit.

This adequately protected the interests of the investigation while avoiding an unnecessary restraint on the petitioner’s operation of the bank account.

The fixed deposit could be liquidated only upon orders of the competent Judicial Magistrate within three months, thereby requiring the police agency to take timely action under the applicable statutory procedure.

The petition was disposed of.

The State Bank of India was directed to unfreeze the petitioner’s bank account, while keeping ₹25,900—the amount reported by the cyber-crime agencies—in a fixed deposit.

The amount could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with law within that period, the fixed-deposit amount could also be withdrawn by the petitioner, under intimation to the police agency.