Bank accounts must be unfrozen while disputed cyber-fraud amounts remain in fixed deposits pending Magistrate’s orders.

The petitioner, M/s Saksham Traders, challenged the freezing of its current account maintained with Bandhan Bank, Ujjain, and sought a direction permitting operation of the account under Article 226 of the Constitution

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, contending that the present matter was squarely covered by that decision

In Malcolm Murayis, the Court had dealt with bank accounts frozen on the instructions of cyber-crime authorities in connection with alleged fraudulent transactions and had directed preservation of the disputed amounts in fixed deposits while permitting operation of the accounts

In the present case, the amount allegedly connected with the cyber-crime transactions was stated to be ₹2,76,469

Whether the petitioner’s bank account, frozen pursuant to information or directions issued by crime/cyber-crime agencies, should be unfrozen subject to preservation of the disputed amount

Whether the disputed amount of ₹2,76,469 should be kept in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable criminal-procedure law

The Court exercised its jurisdiction under Article 226 of the Constitution to grant appropriate relief against the continued freezing of the petitioner’s bank account

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, that where an account is frozen on the instructions of cyber-crime authorities, the bank may preserve the disputed amount in a fixed deposit, while the remaining account may be operated; liquidation of the fixed deposit is to await orders of the competent Judicial Magistrate

The Court further required the police agency to proceed in accordance with Section 102 of the CrPC, or the corresponding applicable provisions of the BNSS or other relied-upon law, within the stipulated period

The Court held that the facts of the present case were materially analogous to those in Malcolm Murayis and that the earlier decision would apply mutatis mutandis

Balancing the petitioner’s right to operate its bank account against the investigative concern relating to the alleged cyber-crime proceeds, the Court directed that only the claimed disputed amount of ₹2,76,469 be secured in a fixed deposit.

The account itself was to be unfrozen, while the fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If the police agency failed to take appropriate legal steps within that period, the amount could also be released to the petitioner after intimation to the agency

The respondent bank was directed to unfreeze the petitioner’s bank account and to place ₹2,76,469, being the disputed amount claimed by the crime agencies, in a fixed deposit.

The fixed deposit could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months.

In the event of failure by the police agency to proceed in accordance with law within that period, the petitioner could seek withdrawal of the fixed-deposit amount after informing the police agency