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

The petitioner, Dharam Chand Birla, approached the High Court under Article 226 of the Constitution of India seeking a direction to IDFC First Bank to remove a hold/freeze/lien placed on his bank account (Account No. 00000010186751926).

The petitioner contended that his case is identical to a preceding matter, Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), where bank accounts were frozen by cyber cells of various police stations without prior notice or compliance with statutory procedures regarding alleged cyber fraud.

1. Whether the respondent bank should be directed to unfreeze the petitioner's bank account which was held based on intimations from investigating agencies regarding alleged cyber fraud.

2. Whether the directions issued in the case of Malcolm Murayis are applicable mutatis mutandis to the present petitioner's circumstances.

The court primarily applied the principles governing the seizure of property by police officers under Section 102 of the Code of Criminal Procedure (Cr.P.C.)—now the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which requires investigating agencies to report seizures to the concerned Magistrate.

The court relied on the precedent set in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), which established a balancing mechanism between investigative interests and an account holder's rights by directing the segregation of disputed amounts into fixed deposits pending judicial orders.

The court found that the petitioner’s situation was squarely covered by the Malcolm Murayis decision.

In that precedent, the court noted a "poor functioning and irresponsible approach" of cyber crime cells that freeze accounts via email but fail to respond to court inquiries or follow statutory mandates under the Cr.P.C.

The court reasoned that the petitioner should not be indefinitely deprived of his funds due to administrative or investigative inertia. By applying the mutatis mutandis principle, the court determined that the disputed amount should be secured in a fixed deposit to protect the integrity of the investigation while allowing the rest of the account to be operational.

The bank is ordered to keep only the specifically "disputed amount" (as identified by the crime agencies) in a fixed deposit, which may only be liquidated upon orders from a competent Judicial Magistrate within three months. If the police agency fails to proceed in accordance with the law (BNSS) within that timeframe, the petitioner is permitted to withdraw the fixed deposit amount under intimation to the agency.

The petition was disposed of with these directions.