Bank accounts frozen on police intimation must be unfrozen, except for disputed amounts held in fixed deposits.

The petitioner, Rajkumar, filed a writ petition under Article 226 of the Constitution of India seeking a direction to the respondents to unfreeze his bank account (No. 1764018827358241).

The account was placed on hold/freeze following intimations from cyber crime agencies regarding alleged involvement in cyber fraud.

The petitioner contended that his case was identical to the precedent established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), where the court addressed similar grievances regarding account freezes without proper notice or compliance with statutory procedures.

1. Whether the bank is required to unfreeze the petitioner's account and what safeguards should be applied to the disputed amounts allegedly linked to cyber crime.

2. Whether the investigating agencies complied with the procedural mandates of Section 102 of the Cr.P.C. (now relevant provisions of the BNSS) regarding the seizure of bank accounts.

The Court primarily relied on the precedent of Malcolm Murayis & Ors. Vs. State Bank of India and Others.

It applied the principles of Section 102 of the Code of Criminal Procedure (Cr.P.C.), which mandates that investigating agencies inform the concerned Magistrate regarding the seizure of property.

The Court also referenced the transition to the Bharatiya Nagarik Suraksha Sanhita (BNSS) regarding the legal obligations of police agencies during investigations.

The Court found that the petitioner’s situation was squarely covered by the Malcolm Murayis decision, necessitating its application mutatis mutandis.

In the cited precedent, the Court observed that cyber crime cells often freeze accounts via email but fail to respond to judicial inquiries or comply with Section 102 Cr.P.C.

Applying this logic, the Court reasoned that while the disputed amount must be secured to protect the integrity of the investigation, the account holder should not be indefinitely deprived of the entire account's operation if the agency fails to proceed in accordance with law.

The bank is ordered to keep only the specifically disputed amount in a Fixed Deposit (FD). This FD is to be liquidated only upon orders from a competent Judicial Magistrate within three months; should the police agency fail to proceed legally under the BNSS or relevant laws within that period, the petitioner is permitted to withdraw the FD amount under intimation to the agency.