Bank accounts must be unfrozen while disputed amounts remain in fixed deposits pending the Magistrate’s order.

The petitioner invoked Article 226 of the Constitution seeking removal of the hold/freeze placed on his bank account by the respondent Bank pursuant to communications from crime/police agencies.

The disputed amount identified in connection with the alleged cyber-related transactions was Rs. 4,200.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024, in which the Court had directed that disputed amounts be retained in fixed deposits while permitting operation of the remaining account.

Whether the petitioner’s bank account should be unfrozen when only a specific amount of Rs. 4,200 was allegedly linked to the investigation by the crime agencies.

Whether the disputed amount could be segregated and retained in a fixed deposit pending orders of the competent Judicial Magistrate under the relevant provisions of the BNSS or other applicable law.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the freezing of the petitioner’s bank account.

The Court relied on the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., that where only a particular amount in an account is alleged to be connected with cyber crime, the entire account should not remain frozen; instead, the disputed amount may be kept in a fixed deposit and dealt with pursuant to orders of the competent Judicial Magistrate.

The Court further referred to the obligation of the investigating agency to proceed in accordance with the relevant provisions of the BNSS or any other applicable law concerning seizure or attachment of property during investigation.

The earlier decision had also referred to Section 102 of the Cr.P.C. as the applicable provision in that case.

The Court found that the principle laid down in Malcolm Murayis applied mutatis mutandis to the present case.

Since the crime agencies had identified only Rs. 4,200 as the disputed amount, continued freezing of the entire account was considered unnecessary.

Following the precedent, the Court directed that the identified amount be segregated into a fixed deposit, preserving it for adjudication by the competent Judicial Magistrate, while the remaining account was to be unfrozen.

The police agency was expected to initiate or pursue the legally required proceedings within three months; otherwise, the fixed deposit could be released to the petitioner after due intimation to the agency.

The respondent Bank was directed to keep Rs. 4,200, being the disputed amount, in a fixed deposit.

The fixed deposit could be liquidated only upon orders of the competent Judicial Magistrate within three months, in accordance with the relevant provisions of the BNSS or other applicable law.

If the police agency failed to obtain appropriate orders within that period, the amount could also be withdrawn by the petitioner after informing the agency.

The petitioner’s bank account was directed to be unfrozen.