Bank accounts must be unfrozen by securing disputed amounts in fixed deposits pending orders from the competent Magistrate.

The petitioner, Anshu Jain, filed a writ petition under Article 226 of the Constitution of India seeking a direction to the respondent authorities and their respective bank (Respondent No. 3) to defreeze or remove the "hold" placed on their bank account

The petitioner contended that their case is identical to the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where bank accounts were frozen by cyber cells without following statutory procedures

In the cited precedent, accounts were often frozen based on mere intimations of alleged cyber fraud without serving notices to the account holders or informing the concerned Magistrate as required by law

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

2. Whether the freezing of the account by cyber police agencies complied with the procedural requirements of the law

The Court applied the principle of mutatis mutandis to extend the relief granted in Malcolm Murayis & Ors. v. State Bank of India and Others to the present petitioner

The legal framework governing the seizure and freezing of bank accounts is derived from Section 102 of the Code of Criminal Procedure (Cr.P.C.)—now relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which mandates that investigating agencies must inform the competent Magistrate regarding such seizures

The court emphasized that investigative agencies must proceed in accordance with these statutory provisions to maintain a freeze on assets

The Court observed that the petitioner’s situation mirrored the facts in Malcolm Murayis, where cyber crime cells had directed banks to freeze accounts but subsequently failed to respond to inquiries or comply with the mandatory reporting requirements to a Magistrate

By applying the Malcolm Murayis decision mutatis mutandis, the Court determined that the petitioner should not be indefinitely deprived of their account due to administrative or procedural lapses by the police

The Court reasoned that a balance must be struck between the needs of the investigation and the rights of the account holder; therefore, while the disputed amount remains secured in a fixed deposit (FD), the rest of the account should be accessible to the petitioner

The Court ordered that the specific disputed amount, as identified by the cyber crime agencies, be placed in a fixed deposit

This amount is only to be liquidated upon orders from a competent Judicial Magistrate within a period of three months

Should the police agency fail to proceed in accordance with the law (BNSS) within this timeframe, the petitioner is permitted to withdraw the FD amount after providing intimation to the police agency