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

The petitioner, P.G. Industries, through its proprietor Vikas Parihar, maintained Current Account No. 724905000097 with ICICI Bank. A lien/hold of ₹5,98,808 was marked on the account pursuant to a cyber-crime complaint bearing Acknowledgement No. 32208260000454 and communication from the concerned police/cyber agency.

The petitioner approached the High Court under Article 226 of the Constitution seeking removal of the lien and permission to operate the account, production of the cyber complaint and the communication authorising the freeze, or, alternatively, retention of only the disputed amount while releasing the remaining balance.

The petitioner relied upon the Madhya Pradesh High Court’s earlier decision in Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, decided on 26 April 2024. In that case, the Court directed that the disputed amount be kept in fixed deposits and that the bank account be made operational, subject to orders of the competent Judicial Magistrate.

Whether the petitioner’s bank account, on which a lien of ₹5,98,808 had been marked pursuant to a cyber-crime complaint, should be unfrozen and permitted to operate subject to safeguarding the disputed amount?

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

The Court applied the principle that where a bank account is frozen or a lien is imposed pursuant to cyber-crime investigations, the disputed amount may be segregated and preserved in a fixed deposit rather than continuing to freeze the entire account.

The Court relied on Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, decided on 26 April 2024, which directed that the disputed amount be kept in fixed deposits and be liquidated only pursuant to orders of the competent Judicial Magistrate.

The Court also required the investigating agency to proceed in accordance with Section 102 of the Cr.P.C., as referred to in Malcolm Murayis, or the corresponding/relevant provisions of the BNSS or other applicable law, within the prescribed period.

The Court found that the petitioner’s case was covered by the ratio of Malcolm Murayis and held that the same directions should apply mutatis mutandis.

Since the cyber agency’s objection related only to the identified disputed amount, continued freezing of the entire current account was considered unnecessary. The Court accordingly adopted the earlier safeguard-oriented mechanism: the disputed amount would remain secured in a fixed deposit, while the account itself would be unfrozen.

The fixed deposit could be liquidated only upon an order of the competent Judicial Magistrate within three months, during which period the police agency was expected to take steps under the relevant provisions of the BNSS or other applicable law.

If the police agency failed to proceed in accordance with law within that period, the amount kept in the fixed deposit could be released to the petitioner under intimation to the police agency. The petitioner’s bank account was directed to be unfrozen, thereby permitting its operation.