Bank accounts must be unfrozen except disputed cybercrime amounts retained in fixed deposits pending Magistrate orders.

The petitioner invoked Article 226 of the Constitution seeking removal of the hold/freeze imposed on Bank Account No. 50200096675513 by the respondents.

The account had been frozen pursuant to information received from cyber-crime authorities concerning an amount allegedly connected with cyber crime.

The Court recorded that the petitioner’s case was squarely covered by Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

In the present case, the disputed amount identified by the police agencies was Rs. 1,500.

Whether the petitioner’s bank account could continue to remain completely frozen merely on the basis of communications from cyber-crime authorities, without securing the disputed amount in accordance with law.

Whether the disputed amount of Rs. 1,500 should be retained separately pending orders of the competent Judicial Magistrate, while permitting operation of the remaining balance in the account.

The Court exercised its jurisdiction under Article 226 of the Constitution to grant appropriate relief against the continued freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, under which the amount allegedly connected with cyber fraud is to be kept in a fixed deposit and may be liquidated only pursuant to an order of the competent Judicial Magistrate, while the remaining amount should not remain frozen.

The Court further required the police agency to proceed in accordance with Section 102 of the Code of Criminal Procedure or the corresponding/relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, within the prescribed period.

The Court found the present case materially covered by Malcolm Murayis, which addressed the legality and consequences of bank-account freezes initiated by cyber-crime authorities.

Applying that precedent, the Court balanced the investigative interest in preserving the allegedly tainted amount against the petitioner’s right to operate the rest of the account.

Accordingly, only the disputed sum of Rs. 1,500 was required to be placed in a fixed deposit pending orders of the competent Judicial Magistrate.

Since no justification existed for freezing the entire account, the account was directed to be unfrozen and the remaining balance released for operation.

The respondents/bank were directed to keep Rs. 1,500 in a fixed deposit, to be liquidated only upon an order of the competent Judicial Magistrate within three months.

If the police agency failed to obtain such an order within that period, the fixed-deposit amount could also be withdrawn by the petitioner under intimation to the police agency.

The petitioner’s bank account was ordered to be unfrozen, and any remaining amount was held not to require freezing.