Bank accounts frozen by investigative agencies must be unfrozen, retaining only disputed amounts in fixed deposits.

The petitioner, Ankush Thori, filed a writ petition under Article 226 of the Constitution of India seeking a direction to IDFC First Bank to remove an "illegal and arbitrary" hold/freeze placed on his bank account (No. 10208249811)

The petitioner contended that his case was identical to the matter of Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), wherein accounts were frozen by banks solely based on intimations from cyber crime cells regarding alleged fraud, often without following statutory procedures or notifying the account holders

1. Whether the freeze imposed on the petitioner’s bank account by the respondent bank at the instance of police agencies is sustainable in the absence of procedural compliance

2. Whether the disputed amount should be segregated to allow the petitioner to operate the remainder of the account

The Court exercised its jurisdiction under Article 226 of the Constitution of India

It applied the legal principles established in Malcolm Murayis & Ors. v. State Bank of India and Others, which mandate compliance with Section 102 of the Cr.P.C. (now relevant provisions of the Bharatiya Nagarik Suraksha Sanhita/BNSS) regarding the seizure of property and the requirement to inform the concerned Magistrate

The Court determined that the petitioner’s case was squarely covered by the precedent in Malcolm Murayis and applied its findings mutatis mutandis

In the referenced precedent, the Court noted that cyber crime cells frequently instruct banks to freeze accounts without responding to court inquiries or following the mandatory procedure of informing a Magistrate under Section 102 Cr.P.C.

To balance the requirements of the investigation with the petitioner's rights, the Court reasoned that the specific disputed amount—as identified by the crime agencies—should be secured in a Fixed Deposit (FD) rather than freezing the entire account

This ensures the funds remain available for legal proceedings while allowing the petitioner to regain access to the account

The bank was ordered to keep only the disputed amount in a Fixed Deposit, which shall not be liquidated unless ordered by a competent Judicial Magistrate within three months

If the police agency fails to proceed in accordance with the BNSS or relevant law within three months, the petitioner is permitted to withdraw the FD amount under intimation to the police