Bank accounts frozen on cybercrime alerts must be unfrozen except for disputed amounts secured in fixed deposits pending Magistrate’s orders.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking de-freezing of his Bank of India account maintained at the Rambagh Branch, Indore, bearing Account No. 880410110010877.

The account had been frozen pursuant to communications from crime/cyber-crime agencies concerning an amount allegedly linked to cyber fraud.

The disputed amount identified in the present case was ₹28,902.

The petitioner relied upon the High Court’s earlier decision in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, concerning the freezing of bank accounts on instructions of cyber-crime authorities.

Whether the petitioner’s bank account, frozen pursuant to communications from crime/cyber-crime agencies, should be de-frozen subject to protection of the disputed amount of ₹28,902.

Whether the disputed amount should be retained in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the continued freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, that where an account is frozen on the instructions of cyber-crime authorities, the disputed amount may be secured in a fixed deposit while the remaining funds are released, subject to the investigating agency obtaining appropriate orders from the competent Judicial Magistrate.

The Court referred to the requirement that the police proceed in accordance with Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, regarding seizure/freezing of property connected with an offence.

The Court found that the petitioner’s case was squarely covered by Malcolm Murayis and applied that decision mutatis mutandis.

Balancing the investigation-related claim over ₹28,902 against the petitioner’s right to operate the account, the Court directed the Bank to place only the disputed amount in a fixed deposit.

That amount could be liquidated only upon an order of the competent Judicial Magistrate within three months, thereby preserving the alleged proceeds while requiring the police agency to follow the applicable statutory procedure.

Since no justification was shown for continuing to block the remainder of the account, the Court directed that the account be unfrozen and that all undisputed funds be made available to the petitioner.

The Bank was directed to unfreeze the petitioner’s account and to keep ₹28,902 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate passed within three months.

If the police agency failed to proceed in accordance with law within that period, the amount in the fixed deposit could also be released to the petitioner, under intimation to the police agency.

Any remaining amount in the account was not to remain frozen and was directed to be de-frozen.