Bank accounts must be unfrozen by securing disputed amounts in fixed deposits pending time-bound judicial orders.

The petitioner, Bhupendra Upadhyay, filed a writ petition under Article 226 of the Constitution of India seeking a direction to HDFC Bank Ltd. to remove a hold/freeze/lien placed on his bank account

The petitioner contended that his grievance was identical to the issues adjudicated in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where bank accounts were frozen by cyber cell authorities without following due process under Section 102 of the Cr.P.C.

In the cited precedent, the court had noted the irresponsible approach of cyber crime cells in failing to respond to inquiries or comply with statutory reporting requirements to Magistrates after freezing accounts.

1. Whether the petitioner’s bank account should be unfrozen based on the principles established in the case of Malcolm Murayis v. State Bank of India?

2. What conditions must be imposed on the disputed amount to balance the interests of the investigating agencies and the account holder's rights?

The court primarily relied on Article 226 of the Constitution of India regarding its writ jurisdiction

It applied the procedural requirements of Section 102 of the Code of Criminal Procedure (Cr.P.C.)—and its successor provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which mandate that investigating agencies must inform the concerned Magistrate regarding the seizure of property/accounts

Furthermore, the court applied the doctrine of mutatis mutandis to follow the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others, which established a framework for unfreezing accounts while securing disputed funds in fixed deposits

The court determined that the petitioner’s case was squarely covered by the decision in Malcolm Murayis

In that precedent, the court observed that investigative agencies often direct banks to freeze accounts via email without timely follow-up or statutory compliance, leading to indefinite deprivation of the account holder's funds

By applying this reasoning mutatis mutandis to the present facts, the court found that the continued freeze on the petitioner's entire account was unjustified

To protect the integrity of any potential investigation while restoring the petitioner’s access to his account, the court reasoned that the specific "disputed amount" should be isolated into a fixed deposit, whereas the remainder of the account should be accessible to the petitioner

This ensures that if the police fail to obtain a formal order from a competent Judicial Magistrate within a prescribed timeframe, the petitioner is not indefinitely prejudiced

However, the bank was directed to keep the disputed amount (as identified by the crime agencies) in a fixed deposit. This fixed deposit shall only be liquidated upon an order 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 this period, the petitioner is permitted to withdraw the amount under intimation to the agency

The petition stood disposed of with no order as to costs