Bank Accounts Frozen Due to Alleged Cyber Fraud Must Be Unfrozen Subject to Segregating Disputed Amounts.

The petitioner, Sanjay Kumar Vishwakarma, filed a writ petition under Article 226 of the Constitution of India seeking a direction to defreeze his bank account (No. 50100310837690) held with HDFC Bank

The account had been frozen following intimations from cyber crime agencies regarding alleged involvement in cyber fraud. The petitioner contended that his case is squarely covered by a previous High Court decision involving similar circumstances where bank accounts were frozen without proper procedural compliance

1. Whether the petitioner is entitled to the defreezing of his bank account subject to certain conditions as per established judicial precedents

2. Whether the investigating agencies must comply with specific procedural timelines under the Bharatiya Nagarik Suraksha Sanhita (BNSS) or Cr.P.C. to maintain a freeze on a bank account

The Court primarily relied upon the precedent set in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), which established that while banks are bound by instructions from cyber cells, investigating agencies must proceed in accordance with Section 102 of the Cr.P.C. (now relevant provisions of the BNSS) and inform the concerned Magistrate of such seizures

The doctrine applied ensures a balance between investigative requirements and the account holder's right to operate their account by segregating only the "disputed amount"

The Court observed that the petitioner’s situation mirrored the facts in Malcolm Murayis, where accounts were frozen based on cyber cell intimations without providing the account holder a notice or a "clean chit" timeline

Justice Sandeep N. Bhatt reasoned that the decision in the cited case should apply mutatis mutandis to the present matter. The Court determined that instead of an indefinite freeze on the entire account, the specific disputed amount (identified as Rs. 2,820.95/-) should be isolated into a fixed deposit, thereby allowing the petitioner to regain access to the remainder of his funds while ensuring the allegedly fraudulent amount remains secured for judicial oversight

The Bank must keep the disputed amount of Rs. 2,820.95/- in a fixed deposit, which can only be liquidated upon orders from a competent Judicial Magistrate. If the police agency fails to proceed in accordance with the law (BNSS) within three months, the petitioner may withdraw the FD amount under intimation to the agency. The petition was disposed of accordingly