Bank accounts cannot be fully frozen; only disputed amounts may be held in fixed deposits.

The petitioner, Mohammad Aijaz, held a Savings Bank Account (No. 10168874532) at IDFC First Bank, Navlakha Road Branch, Indore.

The account was subjected to a debit freeze/lien following instructions from cyber crime agencies regarding a disputed amount of ₹5,000.

The petitioner filed this writ petition under Article 226 of the Constitution of India seeking a mandamus to unfreeze the account and restore banking facilities, arguing that the complete freeze was disproportionate and illegal.

The petitioner relied on a precedent involving similar circumstances of accounts being frozen without notice or compliance with procedural safeguards.

1. Whether the bank is justified in freezing the entire bank account of the petitioner based on an investigation into a specific disputed amount.

2. Whether the freezing of the account complied with the procedural requirements of Section 102 of the Code of Criminal Procedure (Cr.P.C.) or the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS).

The court primarily applied the legal principles established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), which mandates that investigating agencies must comply with Section 102 of the Cr.P.C. by informing the concerned Magistrate of seizures and that banks should only lien the specific disputed amount rather than freezing the entire account.

It further referenced the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which governs the seizure of property during investigations.

The Court observed that the petitioner’s case was squarely covered by the Malcolm Murayis precedent, where it was held that cyber crime cells often act irresponsibly by freezing accounts without following due process or responding to inquiries.

The Court reasoned that keeping an entire account frozen for a specific disputed amount causes undue hardship. It determined that the interest of justice would be served by securing only the disputed amount (₹5,000) in a fixed deposit while allowing the petitioner to operate the remainder of the account.

The Court emphasized that the police agency is expected to proceed in accordance with the law (BNSS) within a specific timeframe (three months) to justify the lien.

It directed IDFC First Bank to unfreeze the petitioner's account and restore all banking facilities. The bank was ordered to keep only the disputed amount in a fixed deposit (FD), which shall only be liquidated upon orders from a competent Judicial Magistrate. If the police agency fails to proceed in accordance with the law within three months, the petitioner is permitted to withdraw the FD amount under intimation to the agency.