Bank account may be unfrozen provided disputed amounts are secured in fixed deposits pending investigative orders.

The petitioner, Shubham, filed a writ petition under Article 226 of the Constitution of India seeking a direction to unfreeze and restore access to his bank account (No. 100285673491) at IndusInd Bank, Shujalpur.

The account had been frozen following intimations from cyber cell police stations alleging involvement in cyber fraud.

The petitioner maintained that he was lawfully engaged in trading and had received no prior notice under Section 102 of the Cr.P.C. regarding the seizure.

He contended his case was squarely covered by the precedent in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024).

1. Whether the bank account of the petitioner should be unfrozen and access restored given the lack of procedural compliance by investigating agencies.

2. Whether the disputed amounts in the account should be secured in fixed deposits pending a judicial order.

The Court applied the principles governing the seizure of property under Section 102 of the Code of Criminal Procedure (Cr.P.C.) and its successor provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS), which require investigating officers to report seizures to the concerned Magistrate.

It further relied on the doctrine of parity and the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others, which held that while disputed amounts linked to fraud must be secured, the remainder of the account should not be indefinitely frozen due to administrative inaction by cyber cells.

The Court observed that in similar matters, cyber crime cells often request banks to freeze accounts but fail to respond to subsequent communications or comply with statutory mandates under Section 102 Cr.P.C.

Applying the Malcolm Murayis precedent mutatis mutandis to the present facts, the Court reasoned that the petitioner should not be deprived of his total account balance indefinitely.

The Court determined that a balance of interests could be achieved by isolating the specific "disputed amount" flagged by the cyber cell into a fixed deposit, thereby securing the potential proceeds of crime while allowing the petitioner to operate the rest of the account.

The bank was ordered to keep the specific disputed amount in a fixed deposit (FD), which can only be liquidated upon orders from a competent Judicial Magistrate; if the police agency fails to proceed in accordance with the law (BNSS/Cr.P.C.) within three months, the petitioner is permitted to withdraw the FD amount under intimation to the agency.