Bank accounts freezed on police intimation must be unfrozen subject to placing disputed amounts in fixed deposits.

The petitioner, Navnit Namdev, filed a writ petition under Article 226 of the Constitution of India seeking a direction to IDFC Bank (Respondent No. 1) to unfreeze his saving bank account (No. 1007807811).

The account had been subjected to a hold/lien due to instructions from investigative agencies regarding alleged cyber-crime or fraud.

The petitioner contended that his case was identical to the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others.

1. Whether the respondent bank can indefinitely freeze the petitioner’s entire bank account based on investigative intimations without the agency following statutory procedures under the BNSS or Cr.P.C.

2. Whether the petitioner is entitled to operate his account while ensuring the disputed amount remains secured for the ongoing investigation.

The court primarily applied the principle of mutatis mutandis to its previous ruling in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), which addressed the freezing of accounts under Section 102 of the Cr.P.C.

The court also referenced the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS) regarding the seizure of property and the requirement for investigating agencies to report such seizures to the competent Magistrate.

The court found that investigative agencies often fail to follow the mandates of Section 102 Cr.P.C. (or equivalent BNSS provisions), such as informing the Magistrate or responding to judicial inquiries once an account is frozen.

Applying the logic from Malcolm Murayis, the court reasoned that the entire account need not be frozen if only a specific amount is disputed.

By directing the bank to segregate the disputed sum (₹270/-) into a fixed deposit, the court balanced the interest of the investigation with the petitioner's right to access his remaining funds.

The court emphasized that the onus is on the police agency to proceed in accordance with law within a specific timeframe (three months), failing which the lien must lapse.

It ordered IDFC Bank to unfreeze the petitioner's saving bank account (No. 1007807811) immediately.

The Bank was directed to keep the disputed amount of ₹270/- 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 act within three months, the petitioner is permitted to withdraw the FD amount under intimation to the agency.