Bank accounts must be unfrozen except for disputed amounts, which shall be held in fixed deposits.

The petitioner, Aabid Sheikh, filed a writ petition under Article 226 of the Constitution of India seeking a direction to IndusInd Bank to defreeze his bank account (No. 158839862190)

The account had been placed under a hold/lien following intimations from cyber cell agencies alleging involvement in cyber fraud

The petitioner contended that he is a lawful trader and was never served with any notice regarding his involvement in any offense

He further alleged that investigating agencies failed to comply with Section 102 of the Cr.P.C. by not informing the concerned Magistrate of the seizure

1. Whether the bank account of the petitioner can remain frozen indefinitely without adherence to statutory procedures by investigating agencies

2. Whether the petitioner is entitled to operate his bank account subject to securing the disputed amount allegedly linked to cybercrime

The court primarily relied on the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), which established that while banks are bound by instructions from cyber cells, such agencies must act in accordance with Section 102 of the Code of Criminal Procedure (Cr.P.C.)—now relevantly under the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which requires reporting seizures to a Magistrate

The principle applied is that the right to operate a bank account can be balanced against investigative needs by isolating only the disputed amount in a fixed deposit

The Court observed that the facts of the current case were squarely covered by the Malcolm Murayis decision

In that precedent, the Court noted the "irresponsible approach" of cyber crime cells that freeze accounts but fail to respond to judicial queries or proceed in accordance with law

The Court reasoned that to protect the petitioner’s rights while ensuring the disputed funds (amounting to ₹2,000 in this case) remain available for investigation, the bank should convert only the disputed amount into a fixed deposit

This ensures that the remainder of the account is accessible, preventing undue hardship caused by total account freezes where the alleged fraudulent amount is minimal compared to the total balance

The bank was ordered to keep the disputed amount of ₹2,000 in a fixed deposit, which may only be liquidated upon orders from a competent Judicial Magistrate within three months. If the police agency fails to proceed in accordance with the BNSS or relevant law within that timeframe, the petitioner may withdraw the FD amount under intimation to the agency

The petition was disposed of with these directions