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

The petitioner filed a writ petition under Article 226 of the Constitution seeking directions to unfreeze his bank account maintained with IDFC Bank, Agar Malwa

The petitioner’s account had been frozen pursuant to information or directions received from crime/cyber-crime agencies, and an amount of ₹270 was identified as the disputed amount allegedly connected with such proceedings

The petitioner relied on Malcolm Murayis v. State Bank of India, W.P. No. 1100 of 2024, decided on 26 April 2024, where the High Court had directed that the disputed amount be kept in a fixed deposit while permitting operation of the bank account

1. Whether the petitioner’s bank account, frozen on the basis of information received from crime/cyber-crime agencies, should be directed to be unfrozen

2. Whether the disputed amount of ₹270 should be retained separately in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable law

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs and directions to secure lawful exercise of public or statutory power

It followed the principle laid down in Malcolm Murayis v. State Bank of India, that where a bank account is frozen pursuant to cyber-crime authorities’ directions, the bank may retain only the disputed amount in a fixed deposit, while the account itself may be unfrozen; the fixed deposit may be liquidated only pursuant to an order of the competent Judicial Magistrate within the stipulated period

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 enabling law, including obtaining appropriate judicial orders regarding the disputed amount

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 his account, the Court directed the bank to segregate only ₹270 in a fixed deposit rather than continue the complete freeze

The disputed amount would remain protected pending an order of the competent Judicial Magistrate, while failure of the police agency to obtain such an order within three months would justify withdrawal of the amount by the petitioner, subject to intimation to the police agency

The bank was directed to unfreeze the petitioner’s account and keep ₹270, being the disputed amount, in a fixed deposit. The fixed deposit could be liquidated only after an order of the competent Judicial Magistrate passed within three months. If no such order was obtained within that period, the petitioner could withdraw the amount after informing the police agency