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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the hold/freeze on his Bandhan Bank account bearing No. 50220034938332 and consequential reliefs.

The petitioner’s case was treated as covered by the High Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. Nos. 11001/2024 and 1185/2024, decided on 26 April 2024.

In that precedent, the Court had addressed bank-account freezes initiated on the instructions of cyber-crime agencies in connection with alleged cyber fraud and had directed that the disputed amounts be secured in fixed deposits pending orders of the competent Judicial Magistrate.

In the present case, the amounts allegedly connected with the crime agencies’ claims were Rs. 4,600, Rs. 1,560 and Rs. 1,888, totalling Rs. 8,048.

Whether the petitioner’s bank account, frozen pursuant to information or directions issued by crime agencies, should be unfrozen subject to securing the disputed amount of Rs. 8,048.

Whether the disputed amount should be placed in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court exercised its jurisdiction under Article 226 of the Constitution to issue appropriate directions concerning the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., under which an amount allegedly linked to cyber crime may be kept in a fixed deposit, while the remainder of the account is permitted to operate, pending lawful action by the investigating agency and orders of the competent Judicial Magistrate.

The Court further relied on the requirement that investigating agencies proceed in accordance with Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, and obtain appropriate judicial orders regarding the seized or disputed amount.

The Court found that the petitioner’s case was squarely covered by the ratio of Malcolm Murayis and applied that decision mutatis mutandis.

Balancing the investigating agencies’ interest in preserving the allegedly tainted funds against the petitioner’s right to operate his bank account, the Court directed that only the disputed sum of Rs. 8,048 be retained in fixed deposits.

Liquidation of that fixed deposit was made subject to orders of the competent Judicial Magistrate within three months, thereby requiring the police agency to take lawful steps under the applicable criminal-procedure provisions.

Since the alleged disputed amount could be separately secured, continued freezing of the entire account was held unnecessary; the account was therefore directed to be unfrozen and the remaining funds released from the freeze.

Bandhan Bank was directed to unfreeze the petitioner’s bank account, while retaining Rs. 8,048—comprising Rs. 4,600, Rs. 1,560 and Rs. 1,888—in fixed deposits.

The fixed deposits could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months; failing such orders, the amount could also be withdrawn by the petitioner under intimation to the police agency.

Any other amount lying in the account was held not to require freezing and was directed to be released.