Bank account may be unfrozen provided disputed funds are secured in fixed deposits pending magistrate orders.

The petitioner, Hariom Rajput, filed a writ petition under Article 226 of the Constitution of India seeking a mandamus to unfreeze his bank account (No. 02971 0255440) held with India Post Payment Bank, Rajgarh

The account was frozen following intimations from cyber cell police authorities regarding alleged involvement in cyber fraud

The petitioner contended that he had received no prior notice of any offence and that he was lawfully carrying out business

He further alleged that the investigating agencies failed to comply with the mandatory reporting requirements to the Magistrate

1. Whether the respondent bank can indefinitely freeze the petitioner's entire account based solely on police intimation without following statutory procedural safeguards

2. Whether the petitioner is entitled to operate his account while ensuring the disputed amount remains secured during the investigation

The court primarily applied the principles governing the seizure of property under Section 102 of the Code of Criminal Procedure (Cr.P.C.)

corresponding to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)

it relied on the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024), which mandates that investigating agencies must inform the competent Magistrate of such seizures and that only the specific "disputed amount" should be restricted rather than the entire account

The court found that the petitioner’s case was squarely covered by the Malcolm Murayis precedent

In that case, the court observed a "poor functioning and irresponsible approach" by cyber crime cells that freeze accounts via email but fail to respond to legal inquiries or follow the procedural mandate of Section 102 Cr.P.C.

Applying this logic to the present facts, the court reasoned that while the integrity of the investigation must be maintained by securing the "disputed amount," the petitioner cannot be deprived of the use of his account indefinitely without a judicial order

The court linked the law to the facts by determining that the bank must convert only the flagged amount into a fixed deposit to protect the state's interest while unfreezing the remainder of the account to protect the petitioner’s rights

It directed the Respondent Bank to unfreeze the petitioner's account immediately

However, the bank is ordered to keep the specific "disputed amount" (as identified by the crime agencies) in a Fixed Deposit (FD). This FD shall only be liquidated upon orders from a competent Judicial Magistrate within three months; should the police agency fail to proceed in accordance with the BNSS/law within that timeframe, the petitioner shall be permitted to withdraw the FD amount under intimation to the agency