Bank accounts must be unfrozen while disputed cybercrime funds remain secured in fixed deposits pending magistrate orders.

The petitioner filed a writ petition under Article 226 of the Constitution seeking, among other reliefs, removal of the hold or freeze on its bank account, a declaration that the freezing was unlawful, and compensation for resulting losses and hardship.

The petitioner submitted that its case was covered by Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024.

1. Whether the directions issued in Malcolm Murayis concerning disputed amounts in accounts frozen at the instance of cyber-crime agencies applied to the petitioner’s case.

2. Whether the petitioner’s bank account should be unfrozen while the disputed amount remained protected pending action by the police agency and orders of the competent Judicial Magistrate.

The Court exercised its jurisdiction under Article 226 of the Constitution and applied Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024.

Under that precedent, the bank was directed to keep the amount identified by the investigating agencies in fixed deposits, to be liquidated only upon orders of the competent Judicial Magistrate within three months; if the agency failed to proceed in accordance with law within that period, the amount could be released to the account holders after intimation to the agency.

In the present case, the Court referred to proceedings under the relevant provisions of the BNSS or any other law relied upon by the police agency.

The Court accepted that the petitioner’s case was governed mutatis mutandis by Malcolm Murayis.

Applying that precedent, it balanced preservation of the disputed amount pending lawful action by the police agency against the petitioner’s request to regain access to its account: the disputed amount was to remain in fixed deposits pending an order of the competent Judicial Magistrate, while the account itself was to be unfrozen.

Those deposits could be liquidated only after orders of the competent Judicial Magistrate within three months; failing lawful action within that period, the amount could be withdrawn by the petitioner after notifying the police agency.

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