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

The petitioner’s savings bank account No. 50100389125177 maintained with HDFC Bank, Rajgarh, Madhya Pradesh, was frozen pursuant to communications from police/cyber-crime authorities alleging that the account was connected with cyber-crime transactions.

The petitioner sought de-freezing of the account or, alternatively, restriction of the freeze to the disputed amount of ₹77,682.80 and release of the remaining balance.

The petitioner relied on Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, where the High Court had directed that the disputed amount be kept in fixed deposits and that the account otherwise be permitted to operate.

The State opposed the petition indirectly through the existing investigative action, and the Court considered whether the earlier decision applied to the present case.

1. Whether the petitioner’s bank account, frozen on the basis of communications from cyber-crime/police authorities, should be de-frozen and permitted to operate, subject to preservation of the disputed amount.

2. Whether the disputed amount of ₹77,682.80 should be segregated and retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable criminal-procedure law.

Article 226 of the Constitution empowers the High Court to issue appropriate writs and directions to prevent unjustified interference with lawful access to a bank account.

The Court relied on the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, that where a bank account is frozen on the instructions of cyber-crime authorities, the disputed amount may be preserved in a fixed deposit while the account is otherwise unfrozen, subject to proceedings before the competent Judicial Magistrate.

The Court also referred to the requirement that police authorities proceed in accordance with Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, including obtaining appropriate judicial orders regarding seized or restrained property.

The Court found that the petitioner’s case was materially covered by Malcolm Murayis and applied that decision mutatis mutandis.

Balancing the investigative interest in preserving the allegedly tainted amount against the petitioner’s right to operate the remainder of the account, the Court directed that ₹77,682.80 be placed in a fixed deposit rather than permitting a blanket freeze of the entire account.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months, thereby requiring the investigating agency to take appropriate action under the applicable criminal-procedure law.

If no such order was obtained within that period, the amount could be released to the petitioner after intimation to the police agency.

The Court directed that the petitioner’s bank account be unfrozen and restored for operation, while the disputed amount of ₹77,682.80 be retained in a fixed deposit.

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