Bank account freezing instructions from cyber cells must comply with Section 102 CrPC/BNSS or face unfreezing.

The petitioner, a trading entity, filed a writ petition under Article 226 of the Constitution of India seeking a direction to ICICI Bank to remove a "freeze/hold" placed on its bank account (No. 346905500347)

The account was frozen based on communications from cyber crime cells alleging involvement in cyber fraud.

The petitioner contended that they were lawfully conducting business and had not received any formal notice regarding their involvement in any offense

1. Whether the respondent bank can indefinitely freeze the petitioner’s entire bank account based solely on investigative intimations from cyber crime agencies without adherence to statutory procedures

2. Whether the disputed amounts in the petitioner’s account should be sequestered into fixed deposits to allow the operation of the remaining account balance

The court applied Section 102 of the Code of Criminal Procedure (Cr.P.C.)—now corresponding to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which governs the power of police officers to seize property and requires reporting such seizure to a Magistrate

The court further relied on the principles established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), which mandates a balance between investigative interests and the account holder's right to operate their bank account when agencies fail to respond or follow due process

The court observed that cyber crime cells often direct banks to freeze accounts but fail to respond to judicial notices or emails, demonstrating an "irresponsible approach"

In line with the Malcolm Murayis precedent, the court found that since the petitioner claimed to be a lawful trader and the investigative agencies had not justified the continued freeze or complied with statutory mandates like informing the Magistrate under Section 102 Cr.P.C., the freezing of the entire account was disproportionate

The court determined that the interests of justice would be served by isolating only the specific "disputed amount" flagged by the agencies into a fixed deposit, thereby allowing the petitioner to utilize the remainder of the funds for business operations

The bank was ordered to keep only the specific "disputed amount" in a fixed deposit, which is to be liquidated only upon orders from a competent Judicial Magistrate. If the police/investigative agencies fail to proceed in accordance with the law under the BNSS or other relevant statutes within three months, the petitioner shall be allowed to withdraw the amount kept in the fixed deposit under intimation to the agency