Bank accounts frozen on police intimation must be de-freezed except for disputed amounts held in fixed deposits.

The petitioner, Kumari Mradul, filed a writ petition under Article 226 of the Constitution of India challenging the freezing/lien marked on her Savings Bank Account (No. 178501000008465) maintained with Indian Overseas Bank, Indore.

The petitioner sought a direction to the bank to allow her to operate the account without restrictions, including withdrawals and transfers.

The petitioner contended that her case was identical to a previous ruling by the same court involving accounts frozen by cyber cells due to alleged cyber fraud.

Whether the respondent bank can be directed to de-freeze the petitioner’s account and permit its operation in light of previous judicial precedents regarding cyber cell intimations.

The Court applied the principles established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100/2024), which mandates that investigating agencies must comply with Section 102 of the Cr.P.C. (now relevant provisions of the Bharatiya Nagarik Suraksha Sanhita/BNSS) by informing the concerned Magistrate of bank account seizures.

The Court relied on the principle that the entire account should not remain frozen indefinitely if only a specific amount is disputed, balancing the petitioner's right to property with investigative requirements.

The Court observed that the case was squarely covered by the Malcolm Murayis decision, where it was noted that banks often freeze accounts solely based on police intimations without subsequent legal follow-up by the cyber cells.

The Court found that investigating agencies often fail to respond to court proceedings or comply with statutory requirements under Section 102 Cr.P.C./BNSS.

The Court reasoned that the petitioner should not be deprived of the use of their entire account. To protect the integrity of the investigation, the court determined that only the specific "disputed amount" should be secured via a fixed deposit, while the rest of the account should be accessible.

The bank was directed to place the specific disputed amount (as informed by the crime agencies) into a fixed deposit. This deposit is to be liquidated only upon orders from a competent Judicial Magistrate within three months, pending the police's legal progression under the BNSS; if no such action occurs within three months, the petitioner may withdraw the amount under intimation to the agency.