Bank accounts must be unfrozen while disputed amounts are secured in fixed deposits pending investigative orders.

The petitioner, Prashant Shinde, filed a writ petition under Article 226 of the Constitution of India challenging the action of the respondent bank in freezing his current bank account (No. 004052000003653) and creating a lien of ₹13,000 and ₹4,000

The account was restricted following intimations from cyber crime agencies regarding suspected involvement in cyber fraud

The petitioner sought a direction to unfreeze the account, arguing that his case was identical to a previous ruling of the High Court

1. Whether the respondent bank’s action of freezing the petitioner’s account and marking a lien without following statutory procedures is legally sustainable

2. Whether the petitioner is entitled to the same relief granted in Malcolm Murayis & Ors. Vs. State Bank of India and Others regarding the management of disputed funds

Section 102 of the Code of Criminal Procedure (Cr.P.C.)—and its corresponding provisions in the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which mandates that investigating agencies must inform the concerned Magistrate regarding the seizure or freezing of property

The precedent established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No.1100 of 2024), which dictates that while disputed amounts related to cyber crime may be secured, the entire account should not remain frozen indefinitely if procedural safeguards are ignored

The Court observed that the petitioner’s situation was "squarely covered" by the Malcolm Murayis decision

In that precedent, the Court noted a "poor functioning and irresponsible approach" by cyber crime cells that instruct banks to freeze accounts but fail to respond to court notices or comply with Section 102 Cr.P.C.

By applying the mutatis mutandis principle, the Court reasoned that the balance between investigating crime and the petitioner’s right to operate his account could be maintained by isolating only the "disputed amount"

The Court found that unless the police or agencies proceed legally within a set timeframe, the petitioner cannot be indefinitely deprived of his funds

The bank was ordered to keep the specific disputed amounts (as informed by crime agencies) in fixed deposits (FDs). These FDs are to be liquidated only upon orders from a competent Judicial Magistrate within three months; should the police agency fail to proceed in accordance with the law (BNSS or other relevant statutes) within that period, the petitioner is permitted to withdraw the FD amounts under intimation to the agency