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

The petitioner filed a petition under Article 226 of the Constitution seeking release and defreezing of his bank account bearing No. 36181388544, while permitting the bank to retain a lien over the allegedly suspicious amount of ₹630.

The account had been frozen pursuant to information or directions issued by cyber-crime or police authorities in connection with an alleged cyber fraud.

The petitioner relied on the decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, in which similar bank-account freezing proceedings were considered.

Whether the petitioner’s bank account could continue to remain completely frozen on account of the alleged cyber-crime-linked transaction of ₹630.

Whether the disputed amount of ₹630 should be retained separately in a fixed deposit pending appropriate orders by the competent Judicial Magistrate, while the remaining balance in the account is released.

Whether the police authorities were required to proceed in accordance with the applicable provisions of the BNSS or other governing law concerning seizure or restraint of property.

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

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., that where a bank account is frozen on the instructions of cyber-crime authorities, the disputed amount may be segregated and placed in a fixed deposit, while the account-holder may operate the remainder of the account; liquidation of the fixed deposit is subject to orders of the competent Judicial Magistrate within the prescribed period.

The Court further directed the police agency to proceed in accordance with the relevant provisions of the BNSS or any other applicable law governing seizure, attachment, or restraint of property.

The Court found the petitioner’s case to be squarely covered by Malcolm Murayis and applied that decision mutatis mutandis.

Since only ₹630 was identified as the disputed or suspicious amount, continued freezing of the entire bank account was considered unwarranted.

The Court therefore balanced the investigative interest in preserving the allegedly tainted amount with the petitioner’s right to access the undisputed funds: ₹630 was to be placed in a fixed deposit, subject to orders of the competent Judicial Magistrate within three months, whereas the remainder of the account was to be defrozen.

The direction also preserved the possibility of withdrawal of the fixed-deposit amount if the police agency failed to obtain appropriate judicial orders within the stipulated period, subject to intimation to that agency.

The concerned bank was directed to defreeze the petitioner’s bank account and to retain ₹630 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate passed within three months; failing such an order, the petitioner could withdraw the amount upon informing the police agency.

The remaining amount, if any, in the petitioner’s account was directed to be released and not kept frozen.