Bank Account Freeze for Cyber Investigation Subject to Strict Compliance with Procedural Seizure Laws.

The petitioner, a private investment company, filed a writ petition under Article 226 of the Constitution of India seeking a mandamus to unfreeze its bank account (No. 074905001161) at the Malappuram Branch

The account had been frozen at the request of cyber crime investigative agencies following allegations of cyber fraud

The petitioner contended that they were carrying out lawful business and that no notice regarding their involvement in any offense was received

The matter was brought before the High Court of Madhya Pradesh, Indore Bench, on July 13, 2026

1. Whether the bank account of the petitioner can be unfrozen while protected the interests of the investigation by securing the disputed amounts in fixed deposits

2. Whether the failure of investigative agencies to comply with statutory mandates under criminal procedure warrants the release of frozen accounts

The Court primarily relied on the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), which dictates that frozen accounts may be operated if the disputed amounts are set aside in fixed deposits

Section 102 of the Code of Criminal Procedure (Cr.P.C.)—now corresponding to relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which requires investigating officers to report seizures to the Magistrate and follow due process

The Court observed that the facts of the current petition were squarely covered by the decision in Malcolm Murayis

In that precedent, the Court noted a "poor functioning and irresponsible approach" of cyber crime cells, which frequently request account freezes via email but fail to respond to legal inquiries or inform Magistrates of the seizure as required by law

Justice Sandeep N. Bhatt reasoned that the petitioner’s right to operate their account should not be indefinitely suspended due to administrative lethargy

By directing the disputed amount to be converted into a fixed deposit (FD), the Court balanced the petitioner’s right to property with the state's interest in recovering fraudulent gains, ensuring the funds remain secured until a competent Judicial Magistrate passes a final order

It ordered the respondent bank to unfreeze the petitioner’s account (No. 074905001161) immediately. However, the specific disputed amount informed by crime agencies must be kept in a fixed deposit, which can only be liquidated upon orders from a competent Judicial Magistrate within three months

If the police agency fails to proceed in accordance with the law (BNSS) within that timeframe, the petitioner is permitted to withdraw the FD amount under intimation to the agency