Bank accounts frozen for cybercrimes must be unfrozen, keeping only disputed amounts in fixed deposits.

In brief

The question

Whether the respondent bank should be directed to unfreeze the petitioner’s account which was placed on hold due to alleged cyber crime investigations

The court held

The High Court disposed of the writ petition with a direction to the respondent bank to unfreeze the petitioner’s account

It also directed

The bank was ordered to keep the disputed amount—as identified by the crime agencies—in a fixed deposit (FD). The FD is to be liquidated only upon orders from a competent Judicial Magistrate within a period of three months. If the police agency fails to proceed in accordance with the law (BNSS) within this timeframe, the petitioner is entitled to withdraw the FD amount under intimation to the agency

01Facts

The petitioner, Ravi Chouhan, filed a writ petition under Article 226 of the Constitution of India seeking a direction to Bank of Baroda to defreeze/remove a hold or lien placed on his savings account (No. 48770100008234)

¶ 1

The petitioner contended that his case was identical to Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where bank accounts were frozen by cyber cells of various police stations on allegations of cyber fraud without issuing notice to the account holders or complying with statutory requirements regarding reporting seizures to the Magistrate

¶ 2–3

02Issues

i.Whether the respondent bank should be directed to unfreeze the petitioner’s account which was placed on hold due to alleged cyber crime investigations

¶ 1 & 5

ii.What conditions must be imposed regarding the disputed amount to balance the interests of the investigation and the petitioner’s right to operate his account

¶ 3 & 5

03Law Applied

Article 226 of the Constitution of India

¶ 1

Procedural requirements of Section 102 of the Code of Criminal Procedure (Cr.P.C.) and the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which govern the power of police officers to seize property and mandate reporting such seizures to a Magistrate

¶ 3 & 5

Judicial precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), which provides a framework for conditionally unfreezing accounts in cases of cyber-cell-directed holds

¶ 2–4

Provisions in the judgment · 1

Code of Criminal Procedure Section 102

04Reasoning

The Court observed that the petitioner’s circumstances were mutatis mutandis (with necessary changes) identical to the Malcolm Murayis case

¶ 4

In that precedent, the court had criticized the "irresponsible approach" of cyber crime cells that freeze accounts without following the mandate of Section 102 Cr.P.C. or responding to legal inquiries

¶ 3

The court reasoned that the investigation's integrity could be maintained by securing only the "disputed amount" (the specific funds flagged as fraudulent) in a fixed deposit, rather than freezing the entire account indefinitely

¶ 3 & 5

This approach ensures that the police have a window (three months) to obtain a formal order from a competent Judicial Magistrate under the BNSS, failing which the petitioner’s right to his funds is restored

¶ 5