Bank accounts must be unfrozen, restricting freezes solely to disputed amounts held in fixed deposits.

The petitioner, Shivam Patel, filed a writ petition under Article 226 of the Constitution of India challenging orders dated 03.09.2025 and 12.09.2025 passed by respondent No. 4, which resulted in the freezing of his bank account at Kotak Mahindra Bank, Indore.

The petitioner sought the unfreezing of the account, asserting that the matter is squarely covered by the Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024).

In the referred precedent, accounts were frozen by cyber cells on allegations of cyber fraud without the investigative agencies providing notice to the account holders or informing the concerned Magistrate of the seizure.

1. Whether the freezing of the petitioner's bank account by investigative agencies is sustainable when statutory procedural requirements are not strictly followed.

2. Whether the petitioner can be permitted to operate the bank account while securing the disputed amount allegedly linked to criminal activity.

The Court applied the principles established in Malcolm Murayis & Ors. v. State Bank of India and Others.

It relied upon Section 102 of the Code of Criminal Procedure (Cr.P.C.) and the corresponding relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which mandate that investigative agencies must inform the concerned Magistrate regarding the seizure of property.

The Court also exercised its discretionary power under Article 226 of the Constitution of India to provide equitable relief.

The Court observed that the facts of the present case are identical to those in Malcolm Murayis, where the Court found an "irresponsible approach" by cyber crime cells that freeze accounts via email but fail to respond to subsequent communications or comply with Section 102 Cr.P.C.

Applying the mutatis mutandis principle, the Court reasoned that the petitioner should not be indefinitely barred from accessing his funds due to procedural lapses by the state.

To balance the interests of the investigation with the petitioner's rights, the Court determined that the disputed amount should be isolated in a fixed deposit (FD), while the rest of the account is unfrozen to allow regular operation.

This ensures the funds remain available should the state prove its case, while preventing undue hardship to the petitioner.

The bank was ordered to keep only the disputed amount in a fixed deposit, which shall not be liquidated without an order from a competent Judicial Magistrate within three months.

If the police agency fails to proceed under the relevant provisions of the BNSS or other applicable law within this three-month period, the petitioner is entitled to withdraw the FD amount under intimation to the agency.