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

The petitioner invoked Article 226 of the Constitution seeking defreezing of his State Bank of India account, Account No. 31459396668, maintained at the Indore Branch.

The Court found that the case was covered by Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

In that precedent, the Court had addressed bank-account freezes effected on the instructions of cyber-crime police authorities in connection with alleged cyber fraud and directed that the disputed amount be secured in fixed deposits pending lawful proceedings.

In the present case, the amount identified by the crime agencies as disputed was Rs. 1,957.

Whether the petitioner’s bank account, frozen pursuant to communications from crime/cyber-crime agencies, should be unfrozen under Article 226 of the Constitution, subject to preservation of the disputed amount.

Whether the disputed amount of Rs. 1,957 should remain secured in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable law.

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

It applied the precedent in Malcolm Murayis & Ors. v. State Bank of India & Others, which held that, where a bank account is frozen on the instructions of investigating cyber-crime agencies, the disputed amount may be kept in a fixed deposit and liquidated only pursuant to an order of the competent Judicial Magistrate; absent such lawful action within the prescribed period, the amount may be released to the account-holder under intimation to the investigating agency.

The Court further relied on the requirement that the police proceed in accordance with Section 102 of the Cr.P.C., or the corresponding applicable provisions of the BNSS or other governing law, concerning seizure/freezing of property during investigation.

The Court held that the principle laid down in Malcolm Murayis applied mutatis mutandis to the petitioner’s case.

Accordingly, a complete freeze of the account was considered unnecessary once the specific disputed amount had been identified.

The Court balanced the investigative interest in preserving alleged proceeds of cyber crime with the petitioner’s right to operate the remainder of his bank account by directing the bank to place Rs. 1,957 in a fixed deposit, while permitting the rest of the account balance to be released.

The fixed deposit could be liquidated only upon an order of the competent Judicial Magistrate within three months, failing which it could also be withdrawn by the petitioner after informing the police agency.

The respondent bank was directed to keep Rs. 1,957 in a fixed deposit, subject to liquidation only upon an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with law within that period, the petitioner could withdraw the fixed-deposit amount under intimation to the agency.

The petitioner’s bank account was directed to be unfrozen, and any remaining amount in the account was not to remain frozen.