Accounts must be unfrozen, with disputed cyber-fraud sums held in fixed deposits pending Magistrate orders.

The petitioner approached the High Court under Article 226 of the Constitution seeking directions to unfreeze his bank account maintained with the respondent, Bank of Baroda

The account had been frozen pursuant to information or instructions received from cyber-crime authorities concerning an amount of Rs. 15,000/- allegedly connected with a cyber offence

The petitioner relied on the decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, where similarly frozen accounts were directed to be unfrozen subject to safeguarding the disputed amount

1. Whether the petitioner’s bank account, frozen on the basis of information received from cyber-crime authorities, should be permitted to be operated pending investigation and judicial orders

2. Whether the disputed amount of Rs. 15,000/- should be retained separately in a fixed deposit pending orders of the competent Judicial Magistrate

The Court exercised its jurisdiction under Article 226 of the Constitution of India to grant appropriate directions concerning the freezing of the petitioner’s bank account

It followed the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., under which a bank account should not remain wholly frozen merely because a cyber-crime agency has identified a disputed transaction; instead, the disputed amount may be segregated and preserved in a fixed deposit, subject to orders of the competent Judicial Magistrate

The Court further required the police agency to proceed in accordance with the relevant provisions of the BNSS or other applicable law governing seizure or attachment of property connected with an offence, and to obtain appropriate judicial orders within three months

The Court found the present case to be materially covered by Malcolm Murayis and applied that decision mutatis mutandis

Balancing the petitioner’s right to operate his bank account against the investigative interest in preserving the allegedly tainted amount, the Court directed that only the disputed sum of Rs. 15,000/- be placed in a fixed deposit.

The remainder of the account was therefore not required to remain frozen.

The fixed deposit could be liquidated only upon orders of the competent Judicial Magistrate within three months; if the police agency failed to proceed in accordance with law within that period, the petitioner could seek withdrawal of the amount after informing the police agency

The Bank of Baroda was directed to unfreeze the petitioner’s bank account, while retaining Rs. 15,000/- in a fixed deposit.

The amount could be released or liquidated only pursuant to orders of the competent Judicial Magistrate passed within three months.

In default of timely lawful action by the police agency, the petitioner could seek withdrawal of the fixed-deposit amount under intimation to that agency