Bank accounts must be unfrozen while disputed cybercrime-linked sums remain secured pending Magistrate’s orders.

The petitioner approached the High Court under Article 226 of the Constitution seeking directions to the respondents to unfreeze his bank account maintained with Punjab National Bank.

The account had been frozen pursuant to information or directions received from crime/cyber-crime agencies, and an amount of ₹16,274 was identified as the disputed amount.

The petitioner relied upon the decision in Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, decided on 26 April 2024, in which the Court had directed that the disputed amount be kept in a fixed deposit while permitting operation of the bank account.

Whether the petitioner’s bank account, frozen on the basis of information received from crime agencies, should be unfrozen while preserving the disputed amount of ₹16,274?

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

The Court applied the principle laid down in Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, that where a bank account is frozen pursuant to cyber-crime or police communications, the disputed amount may be segregated and kept in a fixed deposit, while the remaining account is permitted to operate.

Liquidation of the fixed deposit is to depend upon orders of the competent Judicial Magistrate, after the investigating agency proceeds in accordance with Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, or any other law relied upon by the investigating agency.

The Court applied the earlier decision mutatis mutandis to the petitioner’s case.

The Court found that the petitioner’s case was covered by the ratio of Malcolm Murayis.

Following that precedent, it balanced the need to preserve the allegedly tainted amount for the purposes of investigation with the petitioner’s right to operate his bank account.

Accordingly, instead of continuing the complete freeze, the Court directed the bank to place only the disputed amount of ₹16,274 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months, thereby requiring the police agency to proceed in accordance with the applicable law.

Punjab National Bank was directed to keep the disputed amount of ₹16,274 in a fixed deposit, to be liquidated only upon orders of the competent Judicial Magistrate within three months.

In the absence of such orders within that period, the amount could be released to the petitioner upon intimation to the police agency.

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