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

The petitioner, Shree Mayur Seeds and Agritech, filed a petition under Article 226 of the Constitution seeking directions to unfreeze its current account bearing No. 0088102000039260 maintained with IDBI Bank, Ujjain, and to permit its operation.

The account had been frozen pursuant to information or directions issued by cyber-crime agencies in connection with an alleged cyber fraud.

The amount allegedly linked to the cyber offence was stated to be ₹39,500.

The petitioner’s case was held to be squarely covered by the Madhya Pradesh High Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

In that precedent, the Court had directed that the disputed amount be secured in fixed deposits while permitting operation of the remaining account, subject to further orders of the competent Magistrate.

Whether the petitioner’s bank account, frozen on the basis of information supplied by cyber-crime authorities, should be directed to be unfrozen while securing the amount allegedly connected with the cyber fraud?

Whether the disputed amount of ₹39,500 should be retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable criminal-procedure law?

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the continuation of the bank-account freeze and to protect the petitioner’s right to operate the undisputed funds.

It relied on the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, that where a bank account is frozen pursuant to cyber-crime investigations, the disputed amount may be secured in a fixed deposit, but the entire account need not remain frozen indefinitely.

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, including obtaining appropriate orders from the competent Judicial Magistrate within the prescribed period.

The disputed amount could be liquidated only pursuant to such judicial orders; failing that, it could be released to the petitioner under intimation to the police agency.

The Court found the present case materially identical to Malcolm Murayis and therefore applied that decision mutatis mutandis.

Since only ₹39,500 was claimed to be connected with the cyber offence, freezing the petitioner’s entire bank account was considered unnecessary.

The Court balanced the investigative interests of the cyber-crime authorities with the petitioner’s right to conduct its business by directing the bank to place the disputed amount in a fixed deposit, thereby preserving it for the investigation or criminal proceedings, while permitting the account itself to be unfrozen.

The police authorities were expected to seek appropriate orders from the competent Judicial Magistrate under the applicable statutory procedure within three months.

The respondent bank was directed to keep ₹39,500 in a fixed deposit, which could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If no such order was obtained within that period, the fixed-deposit amount could be withdrawn by the petitioner under intimation to the police agency.

The petitioner’s bank account was ordered to be unfrozen, and any amount beyond the disputed sum was directed to be released from the freeze.