Bank accounts cannot remain indefinitely frozen; disputed funds must be secured in fixed deposits pending Magistrate’s orders.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking directions to Bandhan Bank to immediately unfreeze his bank account, Account No. 50170017682402, or permit debit transactions.

The petitioner’s counsel relied on the High Court’s earlier decision in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, concerning freezing of bank accounts pursuant to communications from cyber-crime authorities.

The Court considered the earlier decision and held that its directions would apply to the petitioner’s case mutatis mutandis.

Whether the petitioner’s bank account, frozen pursuant to information or directions received from crime/cyber-crime agencies, should remain completely frozen or be permitted to operate subject to safeguarding the disputed amount.

Whether the disputed amount should be retained in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the consequences of freezing the petitioner’s bank account.

It relied on the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others that where a bank account is frozen on the request of cyber-crime or investigating agencies, the disputed amount may be segregated and placed in a fixed deposit rather than continuing an indefinite blanket freeze; liquidation of that amount should await orders of the competent Judicial Magistrate under Section 102 of the CrPC or the corresponding applicable provisions of the BNSS.

If the investigating agency fails to obtain appropriate judicial orders within the stipulated period, the fixed-deposit amount may be released to the account holder under intimation to the concerned police agency.

The Court found that the petitioner’s case was squarely covered by the earlier decision in Malcolm Murayis and therefore applied its safeguards mutatis mutandis.

Balancing the investigating agency’s interest in preserving allegedly tainted funds against the petitioner’s right to operate his account, the Court directed that only the amount identified by the crime agencies as disputed should be placed in a fixed deposit.

The remainder of the account was not required to remain frozen, and the disputed amount could be liquidated only upon an order of the competent Judicial Magistrate within three months under the applicable law.

The amount could be liquidated only after orders of the competent Judicial Magistrate within three months; failing such orders, it could be withdrawn by the petitioner under intimation to the concerned police agency.

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

No separate relief beyond these directions was granted, and the petition stood disposed of.