Bank accounts must be unfrozen, securing disputed amounts in fixed deposits pending investigation or magistrate orders.

The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the freezing of his savings account (No. 07882191009757) by Respondent No. 2.

The petitioner sought a writ of Mandamus to unfreeze the account and a direction for the respondents to decide on his representation.

He contended that his case was identical to the matter of Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where bank accounts were frozen by cyber cells regarding alleged crypto-currency fraud without following the mandatory procedural requirements of the Code of Criminal Procedure (Cr.P.C.).

In the cited precedent, the court had noted the failure of investigating agencies to inform the Magistrate regarding seizures as required under Section 102 of the Cr.P.C.

Whether the freezing of the petitioner's bank account was legally sustainable in light of the procedural requirements of the BNSS (formerly Cr.P.C.) and the principles laid down in Malcolm Murayis?

The Court primarily exercised its extraordinary jurisdiction under Article 226 of the Constitution of India.

It applied the procedural mandate of Section 102 of the Cr.P.C. (and the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita/BNSS), which requires investigating agencies to report seizures to the concerned Magistrate.

The Court further relied on the judicial precedent of Malcolm Murayis & Ors. v. State Bank of India and Others, which established that accounts cannot remain frozen indefinitely if the police fail to proceed in accordance with the law or respond to bank inquiries.

The Court observed that the petitioner’s situation was squarely covered by the decision in Malcolm Murayis, where it was found that cyber crime cells often freeze accounts via email without subsequent legal compliance or responsiveness to the banks.

The Court reasoned that the principle of mutatis mutandis applies here, necessitating a balance between investigative interests and the petitioner's right to operate his account.

It determined that while the specific disputed amount linked to the alleged crime should be secured in a fixed deposit to allow the police three months to obtain an order from a competent Judicial Magistrate, the account itself must be unfrozen to prevent undue hardship to the petitioner.

However, the bank was ordered to keep the disputed amount in a fixed deposit (FD).

The Court held that this FD shall only be liquidated upon orders from a competent Judicial Magistrate within three months; if the police agency fails to obtain such an order within this period, the petitioner is entitled to withdraw the amount under intimation to the agency.

The petition stood disposed of with these directions.