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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking defreezing of his savings bank account maintained with Chhawani Main Branch, Indore, and removal of a lien of ₹10,000 imposed on the account.

The petitioner relied on the High Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, concerning bank-account freezing on the request of cyber-crime authorities.

Whether the petitioner’s bank account, frozen pursuant to information or instructions from crime/cyber-crime agencies, should be unfrozen while protecting the disputed amount.

Whether the disputed amount of ₹10,000 should remain subject to a lien or be placed in a fixed deposit pending orders of 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 prevent unlawful deprivation or restriction of a person’s property and banking operations.

Relying on Malcolm Murayis & Ors. v. State Bank of India & Ors., the Court followed the principle that where a bank account is frozen at the request of investigating authorities in connection with an alleged cyber crime, the bank may preserve only the disputed amount in a fixed deposit, while the account itself may be unfrozen.

The disputed amount may be liquidated only upon orders of the competent Judicial Magistrate within three months, as required under the applicable provisions of the BNSS or any other law relied upon by the police; failing such action, withdrawal may be permitted under intimation to the police agency.

The earlier decision had referred to the corresponding procedure under Section 102 of the CrPC and the obligation to place the seizure before the competent Magistrate.

The Court found that the present case was materially covered by Malcolm Murayis, which addressed freezing of bank accounts on cyber-crime authorities’ instructions.

Applying that precedent, the Court balanced the investigative interest in preserving allegedly tainted funds with the petitioner’s right to operate his bank account.

It therefore directed that only the amount reported as disputed by the crime agencies be secured in a fixed deposit, rather than continuing the freeze over the entire account.

The fixed deposit was to remain subject to orders of the competent Judicial Magistrate within three months, failing which the amount could be released to the petitioner after informing the police agency.

The petitioner’s bank account was directed to be unfrozen.

The disputed amount identified by the crime agencies was to be kept in a fixed deposit and could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with the applicable provisions of the BNSS or other relied-upon law within that period, the amount could be withdrawn by the petitioner under intimation to the police agency.