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

The petitioner approached the High Court under Article 226 of the Constitution seeking removal of the hold/freeze on his HDFC Bank account bearing No. 50100532785577.

The freeze had been imposed pursuant to communications from crime/cyber-crime agencies concerning transactions allegedly connected with cyber fraud.

The petitioner relied on the High Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024, where similar relief had been granted.

The Court recorded that the amount identified by the crime agencies as disputed was ₹14,289.36.

Whether the petitioner’s bank account, frozen pursuant to communications from crime/cyber-crime agencies, ought to be unfrozen in the circumstances of the case.

Whether the disputed amount of ₹14,289.36 should be preserved in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable law.

The Court applied the principles governing seizure or freezing of property suspected to be connected with an offence under Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”).

The relevant principle is that investigating authorities must proceed in accordance with law and obtain appropriate judicial orders concerning seized or frozen funds.

The Court followed Malcolm Murayis & Ors. v. State Bank of India & Ors., where it directed that the disputed amount be kept in a fixed deposit, subject to orders of the competent Judicial Magistrate within three months, while permitting operation of the remaining bank account.

The Court found that the petitioner’s case was materially covered by Malcolm Murayis and applied that decision mutatis mutandis.

Consistent with the earlier ruling, the Court balanced the investigative interest in preserving allegedly tainted funds against the petitioner’s right to operate his bank account.

It therefore directed that only the disputed amount of ₹14,289.36 be placed in a fixed deposit, to be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

The direction was premised on the expectation that the police agency would take the necessary steps under the BNSS or other applicable law; failing such action, the amount could subsequently be withdrawn by the petitioner after intimation to the police agency.

HDFC Bank was directed to unfreeze the petitioner’s bank account, while retaining ₹14,289.36 in a fixed deposit.

The fixed deposit 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 petitioner could withdraw the fixed-deposit amount after informing the police agency.