Bank accounts frozen over cybercrime allegations must be unfrozen, with disputed sums secured in fixed deposits pending Magistrate’s orders.

The petitioner challenged the freezing of his bank account bearing No. 10164128248 with IDFC First Bank, Vijaynagar Branch, Indore, and sought restoration of its full operation under Article 226 of the Constitution.

The petitioner contended that the account had been frozen pursuant to communications from cyber-crime agencies and relied on Malcolm Murayis v. State Bank of India, W.P. No. 1100 of 2024, decided on 26 April 2024.

The disputed amount allegedly connected with the cyber-crime complaints was Rs. 3,600.

In Malcolm Murayis, the Court had directed that disputed amounts be kept in fixed deposits and that the concerned investigating agencies obtain appropriate orders from the competent Judicial Magistrate within three months.

Whether the petitioner’s bank account, frozen pursuant to communications from cyber-crime agencies, should be unfrozen subject to safeguarding the disputed amount of Rs. 3,600.

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

The Court exercised its jurisdiction under Article 226 of the Constitution to consider the legality and continuation of the account freeze.

It applied the principle in Malcolm Murayis v. State Bank of India, under which a bank account frozen on the instructions of cyber-crime investigating agencies may be unfrozen while the specifically disputed amount is secured in a fixed deposit, subject to the investigating agency obtaining orders from the competent Judicial Magistrate within a stipulated period.

The Court referred to compliance with the applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), or any other law relied upon by the police agency, concerning seizure/freezing and judicial supervision of the disputed funds.

The earlier decision had also referred to Section 102 of the Code of Criminal Procedure, 1973, as the corresponding procedural safeguard.

The Court found that the present case was covered mutatis mutandis by Malcolm Murayis.

Applying that precedent, it distinguished between the disputed amount allegedly linked to the cyber-crime complaints and the remainder of the petitioner’s account balance.

Rather than permitting the continued freezing of the entire account, the Court directed that only Rs. 3,600 be secured in a fixed deposit.

This amount could be liquidated only upon an order of the competent Judicial Magistrate within three months, thereby preserving the investigating agency’s claim while protecting the petitioner’s access to the rest of his account.

If the police agency failed to obtain the requisite judicial order within that period, the fixed-deposit amount could also be released to the petitioner after intimation to the agency.

IDFC First Bank was directed to unfreeze the petitioner’s bank account and restore its operation, while retaining Rs. 3,600 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate obtained within three months under the applicable law; failing that, the petitioner could withdraw the amount after informing the concerned police agency.