Bank accounts may be unfrozen while disputed cyber-fraud amounts remain secured in fixed deposits pending Magistrate orders.

The petitioner invoked Article 226 of the Constitution seeking defreezing of bank account No. 60552230325 maintained with respondent No. 2 and consequential reliefs.

The petitioner relied on Malcolm Murayis & Others v. State Bank of India & Others , W.P. No. 1100 of 2024, decided on 26 April 2024, in which this Court had issued directions concerning bank accounts frozen on the instructions of cyber-crime agencies.

The Court found the earlier decision applicable mutatis mutandis to the present case.

The crime agencies had identified ₹20,000 as the disputed amount connected with the petitioner’s account.

1. Whether the petitioner’s bank account, frozen on the basis of information or directions received from crime agencies, should be unfrozen subject to safeguarding the disputed amount of ₹20,000.

2. Whether the disputed amount should be retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable legal provisions.

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

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others , under which the bank must segregate the amount identified by cyber-crime agencies and place it in a fixed deposit, while the remaining account may be operated; liquidation of the fixed deposit is subject to orders of the competent Judicial Magistrate within the prescribed period.

The Court further directed the police agency to proceed in accordance with the relevant provisions of the BNSS or any other applicable law.

Since the relief sought was materially identical to that considered in Malcolm Murayis , the Court applied that precedent mutatis mutandis .

Balancing the petitioner’s right to operate the account against the investigating agency’s claim over the allegedly tainted amount, the Court directed that only ₹20,000 be secured in a fixed deposit rather than continuing the freeze over the entire account.

The fixed deposit was to remain subject to orders of the competent Judicial Magistrate within three months, thereby preserving the evidentiary or restitutionary interest in the disputed amount while permitting the petitioner to use the balance of the account.

The respondents/bank were directed to keep ₹20,000—the amount reported by the crime agencies—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 amount could be withdrawn by the petitioner under intimation to the police agency.

The petitioner’s bank account was directed to be unfrozen.