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

The petitioner approached the High Court under Article 226 of the Constitution seeking directions to Kotak Mahindra Bank to unfreeze his bank account, Account No. 5846337938, while permitting the disputed amount of ₹8,099.12 to be retained separately in a fixed deposit.

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

The petitioner relied upon Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, where the Court directed that disputed amounts be retained in fixed deposits and the remaining bank accounts be permitted to operate.

Whether the petitioner’s bank account, frozen pursuant to cyber-crime allegations, should be unfrozen while retaining the disputed amount of ₹8,099.12 in a fixed deposit.

Whether the disputed amount could remain in fixed deposit pending orders of the competent Judicial Magistrate and proceedings by the police under the applicable provisions of the BNSS or other law.

The Court exercised its jurisdiction under Article 226 of the Constitution to issue appropriate directions concerning the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, that where an account is frozen on the basis of cyber-crime communications, the disputed amount may be retained in a fixed deposit, while the account may otherwise be operated, subject to lawful proceedings before the competent Judicial Magistrate.

The Court further directed the police agency to proceed in accordance with the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, or any other applicable law, and treated failure to obtain appropriate judicial orders within the prescribed period as a basis for permitting withdrawal of the fixed-deposit amount.

The Court found that the petitioner’s case was materially identical to the circumstances considered in Malcolm Murayis and held that the earlier decision applied mutatis mutandis.

Balancing the investigative interest in preserving the allegedly tainted amount against the petitioner’s right to operate his bank account, the Court ordered that only ₹8,099.12 be secured in a fixed deposit.

The amount was to remain subject to orders of the competent Judicial Magistrate, with the police required to take appropriate legal steps within three months.

Since the disputed amount could be separately protected, continued freezing of the entire account was held unnecessary.

Kotak Mahindra Bank was directed to unfreeze the petitioner’s bank account, while retaining ₹8,099.12 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to orders of the competent Judicial Magistrate passed within three months.

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