Bank accounts cannot remain blanket-frozen; only disputed amounts may be retained pending Magistrate’s orders.

The petitioner invoked Article 226 of the Constitution challenging the blanket debit freeze imposed on Bank Account No. 29798100020363 maintained with the Bank of Baroda, Diversion Road Branch, Khargone.

The alleged cyber-crime-related disputed credits amounted to only ₹800, comprising two amounts of ₹400 each.

The petitioner sought removal of the blanket freeze while permitting the disputed amount to remain under lien or in a separate fixed deposit.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, where similar account-freezing action had been considered.

1. Whether a bank account could continue to remain under a blanket debit freeze when only ₹800 was identified by the cyber-crime agencies as disputed.

2. Whether the bank could be directed to retain only the disputed amount in a fixed deposit, while unfreezing the remainder of the petitioner’s bank account, subject to proceedings before the competent Judicial Magistrate.

3. Whether the investigating agency was required to proceed in accordance with the applicable provisions of the BNSS or other enabling law concerning seizure/freezing of property.

The High Court exercised its jurisdiction under Article 226 of the Constitution to examine the legality and proportionality of the blanket account freeze.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, that where cyber-crime agencies identify only a specific disputed amount in a bank account, the bank may retain that amount in a fixed deposit, but the entire account should not remain frozen.

Liquidation of the fixed deposit is subject to an order of the competent Judicial Magistrate within the prescribed period, and the investigating agency must proceed in accordance with Section 102 of the CrPC or the corresponding applicable provisions of the BNSS or other law.

The Court found that the present case was squarely covered by Malcolm Murayis, which had directed banks to segregate the amounts allegedly connected with cyber fraud rather than maintain a blanket freeze over the petitioners’ accounts.

Applying that principle, the Court treated ₹800 as the only amount requiring preservation and considered continued freezing of the entire account disproportionate.

It therefore directed that the disputed amount be placed in a fixed deposit pending orders of the competent Judicial Magistrate, while the remainder of the petitioner’s account was to be unfrozen.

The police agency was expected to take appropriate legal steps under the applicable provisions of the BNSS or other law within three months.

The Bank was directed to keep ₹800—₹400 plus ₹400—in a fixed deposit.

The amount could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with law within that period, the amount could also be released to the petitioner upon intimation to the police agency.

The petitioner’s bank account was otherwise directed to be unfrozen.