Bank Accounts Frozen on Cyber Crime Intimations Must be Unfrozen Subject to Term Deposit of Disputed Amounts

The petitioner, Ranu Ansari, filed a writ petition under Article 226 of the Constitution of India seeking a direction to Bank of Baroda to defreeze her bank account (No. 35488100004540).

The account had been placed under a hold/lien based on intimations from cyber crime agencies regarding alleged cyber fraud.

The petitioner contended that her case was identical to the circumstances in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where accounts were frozen without proper notice or compliance with statutory procedures.

1. Whether the bank account of the petitioner should be unfrozen and the disputed amount dealt with in a manner that balances investigative requirements with the petitioner's rights.

The court primarily applied the legal principles established in Malcolm Murayis & Ors. v. State Bank of India and Others (2024), which addressed the freezing of accounts linked to crypto trading and cyber fraud.

It relied on Section 102 of the Code of Criminal Procedure (Cr.P.C.) (and its successor provisions under the Bharatiya Nagarik Suraksha Sanhita - BNSS), which mandates that investigating agencies must inform the concerned Magistrate regarding the seizure of property.

The Court found that the petitioner’s situation was squarely covered by the decision in Malcolm Murayis, making the same logic applicable mutatis mutandis.

In that precedent, the Court observed that cyber crime cells often fail to respond to communications or follow the mandatory procedural requirements of Section 102 Cr.P.C. after requesting banks to freeze accounts.

To resolve the impasse, the Court reasoned that the specific disputed amount identified by the agencies should be secured in a fixed deposit to protect the interests of the investigation, while the remainder of the account should be accessible to the holder.

The Court emphasized that investigative agencies must proceed in accordance with the law (BNSS/Cr.P.C.) within a reasonable timeframe (three months) to justify the continued restriction on funds.

The bank was ordered to keep only the disputed amount (as informed by the crime agencies) in a fixed deposit. This deposit is to be liquidated only 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 shall be allowed to withdraw the FD amount under intimation to the agency.

The petition was disposed of with these directions.