Bank accounts must be unfrozen by securing disputed amounts in fixed deposits pending further investigation.

The petitioner filed a writ petition under Article 226 of the Constitution of India seeking a direction to the respondents to unfreeze his bank account

The petitioner’s counsel argued that the matter is squarely covered by the Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where accounts were frozen by cyber cell authorities on allegations of cyber fraud without complying with procedural safeguards

In that precedent, the Court noted the irresponsible approach of cyber crime cells in failing to respond to inquiries after freezing accounts

1. Whether the petitioner is entitled to the unfreezing of his bank account based on the principles established in Malcolm Murayis & Ors. v. State Bank of India and Others

2. Whether the freezing of the bank account by investigating agencies necessitates compliance with the procedural requirements of the Bharatiya Nagarik Suraksha Sanhita (BNSS) or the Code of Criminal Procedure (Cr.P.C.)

The Court primarily relied on the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others, which mandates that disputed amounts linked to cybercrime should be secured in fixed deposits rather than freezing entire accounts indefinitely

It also referenced Article 226 of the Constitution of India regarding the Court's writ jurisdiction

Procedurally, the Court highlighted the necessity for investigating agencies to act in accordance with Section 102 of the Cr.P.C. (now relevant provisions of the BNSS), which governs the power of police officers to seize property and requires reporting such seizures to a Magistrate

The Court found that the petitioner’s circumstances were identical to those in the Malcolm Murayis case and determined that the earlier decision should apply mutatis mutandis to the present petition

In the cited precedent, the Court observed that cyber crime cells often freeze accounts via email but fail to respond to subsequent legal inquiries or proceed with the investigation according to law

Consequently, the Court reasoned that the interest of justice is served by balancing the needs of the investigation with the petitioner's right to operate their account. This is achieved by isolating the specific "disputed amount" into a fixed deposit while allowing the remainder of the account to be unfrozen

The bank was ordered to keep the disputed amount (as identified by the crime agencies) in a fixed deposit, which may only be liquidated upon orders from a competent Judicial Magistrate within three months

If the police agency fails to proceed in accordance with the law (BNSS or other relevant statutes) within that three-month period, the petitioner shall be permitted to withdraw the amount kept in the fixed deposit under intimation to the agency