Bank accounts cannot be frozen indefinitely; disputed amounts must be held in fixed deposits pending judicial orders.

The petitioner, Akhilesh Verma, maintained bank account no. 2214969456 with Kotak Mahindra Bank, Indore

The account was frozen/placed on hold by the respondent bank following intimations from cyber crime agencies regarding alleged involvement in cyber fraud

The petitioner sought a writ under Article 226 of the Constitution of India to direct the respondents to remove the freeze, contending that the case is 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 in light of the failure of investigative agencies to follow statutory procedures and respond to court inquiries

2. Whether the disputed amount should be secured in a fixed deposit pending a decision by a competent Magistrate while allowing the operation of the remainder of the account

The Court applied Article 226 of the Constitution of India regarding the High Court's power to issue writs for the enforcement of rights

It relied heavily on the procedural requirements of Section 102 of the Code of Criminal Procedure (Cr.P.C.) [para. 3(4, 9)], now corresponding to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS) [para. 5], which mandates that police officers report seizures/freezing of property to a Magistrate.

The court also followed the judicial precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (2024)

The Court noted that the grievance was identical to the Malcolm Murayis case, where bank accounts were frozen solely on cyber cell intimations without the petitioners being served notice or investigating agencies complying with the mandate to inform the Magistrate under Section 102 Cr.P.C.

In the precedent relied upon, the Court observed a "poor functioning and irresponsible approach" of cyber cells that freeze accounts but fail to respond to judicial proceedings

Applying the principle of mutatis mutandis, the Court determined that the petitioner’s account should be unfrozen, provided the specific "disputed amount" flagged by the agencies is secured to protect the interests of the investigation

The Bank was ordered to keep the disputed amount in a fixed deposit (FD), which shall only be liquidated upon orders from a competent Judicial Magistrate. The police agency was given three months to proceed in accordance with the BNSS/law; should they fail to do so within this timeframe, the petitioner is permitted to withdraw the FD amount under intimation to the agency.