BANK ACCOUNTS FROZEN DUE TO CYBER FRAUD MUST BE UNFROZEN; DISPUTED AMOUNTS TO BE PLACED IN FIXED DEPOSITS PENDING MAGISTRATE’S ORDER.

The petitioner, Himesh Arora, filed a writ petition under Article 226 of the Constitution of India seeking relief regarding their saving account.

The petitioner's bank account had been frozen, without prior notice from police, based on intimations from cyber cells alleging involvement in cyber fraud.

The Banks stated they froze the accounts solely based on instructions from various cyber cell police stations.

The petitioner's case was stated to be squarely covered by the decision in *Malcolm Murayis & Ors. Vs. State Bank of India and Others* (W.P. No.1100 of 2024), dated 26.04.2024.

In the *Malcolm Murayis* case, an interim order allowed petitioners to withdraw Rs.50,000/- per month from their accounts and noted the lack of response from cyber crime cells to email queries sent by the Bank.

1. Whether the respondent Bank should be directed to defreeze/remove the hold/lien from the petitioner's saving account?

2. Whether the disputed amount, linked to alleged cyber fraud, should be kept in fixed deposits and its liquidation made contingent upon orders from a competent Judicial Magistrate?

The court primarily applied the principle that bank accounts frozen based on cyber fraud allegations, often without compliance with provisions like Section 102 of the Cr.P.C. (or equivalent provisions under BNSS), should have funds segregated into fixed deposits.

It also implicitly applied the principles related to the High Court's extraordinary powers under Article 226 of the Constitution of India to issue directions for justice, equity, and good conscience.

The court relied on its own precedent established in *Malcolm Murayis & Ors. Vs. State Bank of India and Others* for similar factual scenarios.

The court found the petitioner's situation to be identical to the *Malcolm Murayis* case, where bank accounts were frozen due to cyber fraud allegations.

In *Malcolm Murayis*, concerns were raised about investigating agencies not complying with Section 102 of Cr.P.C. (mandating informing the Magistrate about seizures) and their unresponsiveness to bank queries.

The court applied the precedent from *Malcolm Murayis* by directing the Bank to place the disputed amount in fixed deposits, which could only be liquidated upon an order from a competent Judicial Magistrate within three months.

The rationale was to ensure that cyber crime authorities either proceed in accordance with law (under BNSS or other relevant provisions) or, failing that, the petitioner should be allowed to withdraw the amount.

This approach balanced the need to investigate alleged fraud with safeguarding the rights of account holders against arbitrary freezing without due process.

It directed the respondent Bank to keep the disputed amount, as informed by the crime agencies, in fixed deposits.

This amount shall be allowed to be liquidated only after orders are passed by the competent Judicial Magistrate within three months.

If the Police agency fails to proceed in accordance with law under the relevant provisions of the BNSS or any other applicable law within three months, the amount in fixed deposit may be withdrawn by the petitioner under intimation to the Police agency.

Furthermore, the bank account of the petitioner shall be unfrozen.