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

The petitioner, Tushar Gurjar, filed a writ petition under Article 226 of the Constitution of India seeking a direction to IDFC First Bank to remove a hold/freeze placed on his bank account

The freeze was initiated based on intimations from cyber crime agencies regarding alleged involvement in cyber fraud

The petitioner contended that his case was identical to Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where the court addressed accounts frozen due to crypto-trading-related investigations without prior notice to the account holders

1. Whether the bank account of the petitioner should remain frozen indefinitely at the request of investigating agencies without the agencies following statutory procedures

2. Whether the petitioner is entitled to operate his bank account while securing the disputed amount allegedly linked to criminal activities

The court applied the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others

It relied on Section 102 of the Code of Criminal Procedure (Cr.P.C.) (now relevant provisions of the Bharatiya Nagarik Suraksha Sanhita [BNSS]), which mandates that investigating officers must report seizures of property to the concerned Magistrate

The doctrine of proportionality was applied to balance the state's interest in investigation with the individual's right to access their funds

The court found that the petitioner’s situation was squarely covered by the Malcolm Murayis precedent, where cyber crime cells failed to respond to court inquiries or follow the mandatory reporting procedures under Section 102 Cr.P.C. after freezing accounts

The court reasoned that an indefinite freeze without active prosecution or judicial oversight is impermissible. To resolve this, the court determined that the "disputed amount" (the specific sum suspected of being the proceeds of crime) should be isolated in a fixed deposit to protect the integrity of the investigation, while the remainder of the account should be unfrozen to allow the petitioner to conduct regular business

The bank was ordered to keep only the specific disputed amount in a fixed deposit (FD). This FD is to remain liquidated only upon orders from a competent Judicial Magistrate within three months, contingent on the police agency proceeding in accordance with the BNSS. Should the agency fail to act within three months, the petitioner may withdraw the FD amount under intimation to the police