Bank accounts must be unfrozen by securing only the disputed amount in fixed deposits pending investigation.

The petitioner, Madhur Jodhani, filed a writ petition under Article 226 of the Constitution of India challenging the freezing of his ICICI Bank account (Account No. 777701830423).

The petitioner contended that the freeze was imposed without lawful authority or a specific order.

The petitioner argued that his case was squarely covered by the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024), where bank accounts were frozen by cyber cells investigating alleged cyber fraud related to cryptocurrency trading without following the procedural requirements of the Code of Criminal Procedure (Cr.P.C.).

1. Whether the freezing of the petitioner’s bank account without a specific lawful order or notice was arbitrary and illegal.

2. Whether the directions and relief granted in the case of Malcolm Murayis & Ors. v. State Bank of India and Others regarding the conditional operation of frozen accounts are applicable to the present petitioner mutatis mutandis.

The court primarily applied the principle of mutatis mutandis application of judicial precedents, specifically relying on Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024).

The court also referenced the procedural requirements for the seizure of property by police officers under Section 102 of the Cr.P.C. (and corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita/BNSS), which mandates reporting seizures to the concerned Magistrate.

The court observed that the facts of the present case were identical to those in Malcolm Murayis, where accounts were frozen based on mere intimations from cyber cells without the account holders being served notices or investigators complying with Section 102 of the Cr.P.C.

In the precedent, the court noted the "irresponsible approach" of various cyber crime cells that freeze accounts via email but fail to respond to judicial inquiries or proceed with legal formalities.

Since the petitioner’s situation mirrored the previous case, the court determined that the same legal remedy—balancing the state's investigative interests with the petitioner's right to property—was appropriate.

The court reasoned that while the account should be unfrozen to allow the petitioner to operate it, the specific "disputed amounts" linked to the investigation must remain secured in fixed deposits to ensure they are available should the investigation yield a formal charge.

However, the bank was ordered to keep the disputed amounts (as identified by the crime agencies) in fixed deposits (FDs).

These FDs are to be liquidated only upon orders from a competent Judicial Magistrate within three months.

The police/crime agencies are expected to proceed in accordance with the law (BNSS or other relevant statutes) within this period; failing which, the petitioner is entitled to withdraw the FD amounts under intimation to the agency.

The petition was disposed of with these specific directions.