Bank accounts must be unfrozen except for disputed cyber-fraud amounts held in fixed deposits pending judicial orders.

The petitioner filed a petition under Article 226 seeking removal of the hold or freeze on her bank account.

The Court found the case covered by Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, and applied that decision mutatis mutandis.

The amount identified by the crime agencies as disputed was Rs. 15,000.

Whether the petitioner’s bank account should be unfrozen where the dispute concerned an identified amount of Rs. 15,000.

Whether the disputed amount should remain secured pending action by the police agency before a competent Judicial Magistrate.

The Court applied the approach in Malcolm Murayis, under which the disputed amount identified by cybercrime agencies is to be kept in a fixed deposit and may be liquidated only after orders are passed by the competent Judicial Magistrate within three months; if the agency fails to proceed in accordance with law within that period, the amount may be withdrawn by the account holder after notifying the agency.

The Court referred to action under the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), or any other law relied upon by the police agency.

Since the Court considered the petitioner’s case covered by Malcolm Murayis, it applied that precedent’s balance between securing the amount alleged to be connected with crime and allowing the account holder access to the rest of the funds.

It therefore directed that Rs. 15,000 be placed in a fixed deposit subject to the police agency obtaining an order from the competent Judicial Magistrate within three months, while directing that the account be unfrozen and that any remaining amount not be kept frozen.

The respondents were directed to keep Rs. 15,000 in a fixed deposit, subject to the stated three-month condition, and to unfreeze the petitioner’s bank account; any other funds in the account were also to be released.