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

The petitioner approached the High Court of Madhya Pradesh under Article 226 of the Constitution seeking directions to unfreeze Bank Account No. 60581145822 and for other appropriate reliefs.

The petitioner relied on the decision in Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, concerning freezing of bank accounts on the instructions of cyber-crime police authorities.

In Malcolm Murayis, the Court had directed the bank to keep the disputed amount identified by the cyber-crime agencies in fixed deposits, subject to orders of the competent Judicial Magistrate, while permitting operation of the remaining account.

The Court found that the said precedent applied to the petitioner’s case mutatis mutandis.

Whether the petitioner’s bank account bearing No. 60581145822 should be unfrozen, subject to safeguarding any amount identified by the police or cyber-crime agencies as disputed.

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

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

It relied on the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others, under which a bank account should not remain wholly frozen merely on the basis of an investigating agency’s communication; instead, the amount allegedly connected with cyber fraud may be secured in a fixed deposit, subject to 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 governing law, within the prescribed period.

The Court considered the petitioner’s case to be materially identical to Malcolm Murayis, where bank accounts had been frozen pursuant to cyber-crime investigations and the agencies had identified allegedly disputed amounts.

Applying that precedent, the Court balanced the petitioner’s right to operate the account against the need to preserve amounts potentially connected with cyber fraud.

It therefore directed that only the disputed amount communicated by the police or cyber-crime agencies be placed in a fixed deposit, rather than continuing a blanket freeze.

Such amount would remain subject to orders of the competent Judicial Magistrate, and the investigating agency was expected to take appropriate proceedings under the applicable law within three months.

The petitioner’s bank account No. 60581145822 was directed to be unfrozen.

Any amount identified by the police or cyber-crime agencies as disputed was to be kept in a fixed deposit and could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months.

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