Bank account freeze by cyber cell requires compliance with statutory seizure procedures and timely judicial intervention.

The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the action of respondent No. 3 (IDBI Bank) in freezing/holding their bank account

The account was frozen based on intimations from cyber crime agencies alleging involvement in cyber fraud

The petitioner contended that they were lawfully engaged in business and had received no prior notice of any investigation or offence

The petitioner sought a mandamus for the removal of the freeze, citing the precedent established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024)

1. Whether the bank is authorized to continue a total freeze on a petitioner’s account indefinitely based solely on cyber cell intimations without the investigating agency following statutory procedures

2. Whether the disputed amount can be segregated into a fixed deposit to allow the petitioner access to the remaining balance of the account

Section 102 of the Code of Criminal Procedure (Cr.P.C.)—and by extension its successor provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which mandates that investigating agencies must inform the jurisdictional Magistrate of seizures.

Judicial precedent of Malcolm Murayis & Ors. Vs. State Bank of India and Others, which established that while disputed funds involved in cyber fraud must be protected, the entire account should not be paralyzed indefinitely due to the "irresponsible approach" of investigating agencies failing to respond to court inquiries

The court noted that the petitioner’s case was "squarely covered" by the decision in Malcolm Murayis

It observed a recurring pattern where cyber crime cells instruct banks to freeze accounts but fail to respond to judicial notices or comply with the procedural mandate of informing the Magistrate under Section 102 Cr.P.C.

The court reasoned that in the interest of justice, the specific disputed amount (identified as ₹20,000 in this case) should be secured in a fixed deposit (FD) to satisfy potential legal claims, while the rest of the account should be unfrozen to prevent undue hardship to the petitioner

The court ordered that the disputed amount of ₹20,000 be kept in a fixed deposit for a period of three months. This FD is to be liquidated only upon orders from a competent Judicial Magistrate; however, if the police agency fails to proceed in accordance with the law (BNSS/Cr.P.C.) within said three months, the petitioner is permitted to withdraw the amount under intimation to the agency