Bank accounts may be unfrozen except for disputed amounts preserved in fixed deposits pending Magistrate’s orders.

The petitioner filed a writ petition under Article 226 of the Constitution seeking defreezing of Account No. 520702010018543 maintained with Union Bank of India, Indore (IDA) Branch.

The account had been frozen pursuant to information or directions received from cyber-crime authorities, and an amount of Rs. 9,410/- was identified as allegedly connected with a cyber offence.

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

The Court found the present case to be squarely covered by that precedent.

1. Whether the petitioner’s bank account, frozen on the basis of information supplied by cyber-crime authorities, should remain wholly frozen or be defreezed subject to safeguarding the disputed amount.

2. Whether the disputed amount of Rs. 9,410/- should be retained in a fixed deposit pending lawful orders by the competent Judicial Magistrate.

3. Whether the police authorities were required to proceed in accordance with Section 102 of the Code of Criminal Procedure or the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023.

The Court exercised its jurisdiction under Article 226 of the Constitution to issue appropriate directions concerning the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, that where a bank account is frozen at the request of cyber-crime authorities, the disputed amount may be segregated and placed in a fixed deposit, while the remaining balance may be released to the account holder.

The police agency must proceed in accordance with Section 102 CrPC or the corresponding provisions of the BNSS and obtain appropriate orders from the competent Judicial Magistrate within the prescribed period.

The Court held that the facts of the petitioner’s case were materially identical to those considered in Malcolm Murayis and therefore applied that decision mutatis mutandis.

Since only Rs. 9,410/- had been identified by the crime agencies as disputed, there was no justification for continuing a blanket freeze over the entire account.

The Court accordingly directed the Bank to place the disputed amount in a fixed deposit, preserving it until orders were passed by the competent Judicial Magistrate within three months in accordance with the applicable criminal-procedure law.

The balance amount was not required to remain frozen and was directed to be released to the petitioner.

Union Bank of India was directed to keep Rs. 9,410/- in a fixed deposit, which could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with law within that period, the fixed-deposit amount could also be withdrawn by the petitioner after informing the police agency.

The petitioner’s bank account was otherwise ordered to be unfrozen, and any remaining amount was directed to be released since it was not required to remain frozen.