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

The petitioner approached the High Court under Article 226 of the Constitution seeking removal of the hold/freeze/lien placed on his bank account maintained with the State Bank of India, bearing Account No. 41209897372 and IFSC Code SBIN0030528.

The petitioner relied upon the High Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, concerning bank-account freezes initiated on the instructions of cyber-crime authorities.

In the present case, the amount allegedly connected with the crime agencies’ information was stated to be only ₹800.

Whether the petitioner’s bank account, which had been frozen pursuant to information or instructions received from crime agencies, should be directed to be unfrozen?

Whether the disputed amount of ₹800 should be retained separately in a fixed deposit pending lawful proceedings before the competent Judicial Magistrate?

Whether the principles laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors. were applicable, mutatis mutandis, to the petitioner’s case?

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs, orders, or directions to protect legal rights and ensure lawful exercise of public power.

It relied on the principle 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 in connection with an alleged cybercrime, the disputed amount may be segregated and placed in a fixed deposit, while the remaining account may be unfrozen, subject to orders of the competent Judicial Magistrate.

The Court further directed the police agency to proceed in accordance with Section 102 of the Code of Criminal Procedure or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, or any other law relied upon by it.

The fixed deposit was to be liquidated only pursuant to the Magistrate’s order within three months, failing which the petitioner could seek withdrawal of the amount under intimation to the concerned police agency.

The Court found that the petitioner’s case was materially covered by the procedure adopted in Malcolm Murayis concerning freezing of bank accounts on the instructions of cyber-crime authorities.

Applying that precedent mutatis mutandis, the Court balanced the investigative interest in preserving the allegedly tainted amount against the petitioner’s right to operate his bank account.

Since the disputed amount was limited to ₹800, the Court directed that only that amount be secured in a fixed deposit, subject to orders of the competent Judicial Magistrate, while the remainder of the bank account was to be unfrozen.

The police agency was expected to take appropriate steps under the applicable statutory procedure within three months.

The bank was directed to place the disputed amount of ₹800 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 in the fixed deposit could also be withdrawn by the petitioner under intimation to the concerned police agency.

The writ petition was accordingly disposed of.