Bank accounts frozen due to cyber fraud require judicial order for liquidation or unfreezing.

The petitioner, Mr. Rohit Kadam, filed a writ petition seeking directions to Fino Payments Bank to de-freeze his bank account and to the UP Cyber Police to process a disputed amount and issue a No Objection Certificate.

He also sought a declaration that the freezing of his account without complying with Section 106(3), 107 of BNSS, 2023, and Articles 14, 19(1)(g), 21, and 300A of the Constitution was illegal and unconstitutional.

The petitioner's case was argued 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 *Malcolm Murayis*, petitioners engaged in crypto and virtual currency trading had their bank accounts frozen based on intimation from cyber cells alleging involvement in cyber fraud, without receiving prior notice or compliance with Section 102 of Cr.P.C.

The banks in *Malcolm Murayis* asserted they froze accounts solely on police instructions.

The *Malcolm Murayis* court noted that investigating agencies, despite being sent emails, largely failed to respond or cooperate, demonstrating poor functioning.

1. Whether the action of completely freezing the petitioner’s bank account without complying with Section 106(3), 107 of BNSS, 2023, and without following Articles 14, 19(1)(g), 21, and 300A of the Constitution of India, is illegal, arbitrary, and unconstitutional.

2. Whether the disputed amount held in a bank account on the instruction of cyber crime agencies should be placed in fixed deposits, and if so, under what conditions it may be liquidated or withdrawn by the petitioner.

3. Whether the bank account of the petitioner, frozen due to alleged cyber crime, should be unfrozen.

The court primarily applied the precedent established in *Malcolm Murayis Ors. Vs. State Bank of India and Others* (W.P. No. 1100 of 2024 dated 26.04.2024), which involved similar circumstances of bank accounts being frozen due to alleged cyber fraud without prior notice or proper procedure.

This precedent directed that disputed amounts be kept in fixed deposits, allowing for liquidation only after orders from a competent Judicial Magistrate within three months, or withdrawal by the petitioner if the police fail to proceed in accordance with law, including Section 102 of Cr.P.C. or relevant provisions of BNSS.

The court found the petitioner's case to be squarely covered by the decision in *Malcolm Murayis Ors. Vs. State Bank of India and Others*.

Applying the principles from *Malcolm Murayis* *mutatis mutandis*, the court reasoned that if cyber crime agencies initiate a freeze of bank accounts, they must follow due process under law, such as Section 102 of Cr.P.C. or the relevant provisions of the BNSS.

The previous judgment highlighted the irresponsible approach of cyber crime cells in not responding to communications.

Consequently, to balance the interests of justice and address the lack of timely action by investigating agencies, the court deemed it appropriate to direct that the disputed amount be held in a fixed deposit, with a time-bound condition for the police to act, failing which the funds would be released to the petitioner.

This approach acknowledges the need to investigate alleged fraud while also protecting citizens from indefinite freezing of their accounts without due legal process.

It directed the respondent bank to keep the disputed amount of Rs. 1800/- in a fixed deposit.

It directed the respondent bank to allow the liquidation of this fixed deposit only after orders are passed by the competent Judicial Magistrate within three months.

If the police agency fails to proceed in accordance with relevant law (BNSS or any other applicable law) within three months, the amount kept in FD shall be allowed to be withdrawn by the petitioner under intimation to the Police agency.

It directed the respondent bank to unfreeze the petitioner's bank account.