Bank accounts frozen for investigation must be unfrozen, retaining only the disputed amount in fixed deposits.

The petitioner, Nura Ninama, filed a writ petition under Article 226 of the Constitution of India challenging the debit freeze placed on their bank account (No. 60561940095) maintained with the Bank of Maharashtra

The account was frozen following intimations from cyber crime investigation agencies regarding alleged involvement in cyber fraud

The petitioner sought a direction to defreeze the account or, alternatively, to permit its operation subject to the retention of the disputed amount of Rs. 9,735.5/-

The petitioner relied on a precedent set by the same Court in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where the Court addressed the freezing of accounts without proper notice or compliance with statutory procedures by investigating agencies

1. Whether the bank account of the petitioner, frozen at the instance of investigating agencies for alleged cyber fraud, can be unfrozen subject to conditions to balance the interests of the investigation and the petitioner's right to operate their account

2. Whether the principles laid down in Malcolm Murayis v. State Bank of India regarding the procedural requirements under the Code of Criminal Procedure/BNSS apply mutatis mutandis to the present case

The court primarily exercised its writ jurisdiction under Article 226 of the Constitution of India to provide relief against arbitrary administrative or investigative actions

It applied the procedural safeguards found in Section 102 of the Code of Criminal Procedure (Cr.P.C.) and the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which mandate that investigating officers must inform the concerned Magistrate regarding the seizure of property (including bank accounts)

The Court followed the judicial precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others (2024), which held that accounts should not remain frozen indefinitely if investigating agencies fail to proceed in accordance with law

The Court observed that the petitioner’s situation was identical to the Malcolm Murayis case, where bank accounts were frozen based solely on cyber cell intimations without the account holders being served notices or being directly implicated in the primary offence

The Court noted a recurring pattern of "poor functioning and irresponsible approach" by cyber crime cells, which frequently fail to respond to court inquiries or proceed with legal requirements after requesting a freeze

Applying the rule of mutatis mutandis, the Court reasoned that the petitioner should not be deprived of their entire account for a specific disputed amount

The Court determined that the interests of justice are served by isolating the disputed amount in a fixed deposit, thereby allowing the petitioner to operate the remainder of the account while ensuring the allegedly fraudulent funds remain secured for the investigation

The Court ordered the Bank to keep the disputed amount (as identified by the crime agencies) in a fixed deposit (FD), which is only to be liquidated upon an order from a competent Judicial Magistrate

The Police agency was directed to proceed in accordance with the relevant provisions of the BNSS or other applicable laws within three months; should the agency fail to do so within this timeframe, the petitioner is permitted to withdraw the amount kept in the FD under intimation to the agency

The petition was disposed of with these specific directions