Bank accounts must be unfrozen while disputed sums remain in fixed deposits pending Magistrate orders within three months.

In brief

The question

Whether the petitioner was entitled to relief concerning the hold/freeze placed on his bank account and disclosure of the material forming its basis.

The court held

The petition was disposed of.

It also directed

The concerned bank was directed to keep the disputed amount identified by the crime agencies in fixed deposits, permitting liquidation only upon orders of the competent Judicial Magistrate within three months.

In the event of non-compliance by the investigating agency, the amount could be withdrawn by the petitioner under intimation to that agency.

The petitioner’s Yes Bank account bearing No. 68363700000232 was directed to be unfrozen.

The broader prayer for formulation of a uniform SOP was not separately adjudicated or granted in the operative directions.

01Facts

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution alleging that his bank account had been placed on hold/frozen and seeking disclosure of the documents and reasons underlying the restriction.

p. 1

He also sought directions for formulation of a uniform Standard Operating Procedure requiring banks to disclose, to the extent legally permissible, the reason, extent, authority, complaint/FIR details, and contact particulars of the investigating agency or officer responsible for the freeze.

p. 1

The petitioner relied upon Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

p. 2

The Court found that the account maintained by the petitioner with Yes Bank, City Center Road Branch, Gwalior, under the “FREEDOM FLEXI 500” scheme, Account No. 68363700000232, had been restricted pursuant to information supplied by crime agencies.

p. 5

02Issues

i.Whether the petitioner was entitled to relief concerning the hold/freeze placed on his bank account and disclosure of the material forming its basis.

p. 1 / para. 1

ii.Whether the directions issued in Malcolm Murayis regarding disputed amounts, fixed deposits, and compliance by investigating agencies under the applicable criminal-procedure law applied mutatis mutandis to the present case.

pp. 4 / paras. 4–5

iii.Whether the concerned bank account should be unfrozen, subject to preservation of the disputed amount pending orders of the competent Judicial Magistrate.

p. 5 / para. 5

03Law Applied

The Court exercised its jurisdiction under Article 226 of the Constitution of India.

p. 1

It relied primarily on Malcolm Murayis & Ors. v. State Bank of India & Others, wherein it directed that the disputed amount identified by cyber-crime agencies be kept in fixed deposits and permitted liquidation only upon orders of the competent Judicial Magistrate within three months, requiring the investigating agency to proceed in accordance with Section 102 of the Code of Criminal Procedure, 1973, or other applicable law.

pp. 3–5

In the present matter, the Court applied the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), or any other law relied upon by the police agency, and adopted the same protective mechanism for the disputed amount.

p. 5

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 102

04Reasoning

The Court held that the petitioner’s case was covered by Malcolm Murayis and that the earlier directions applied mutatis mutandis.

p. 4

Following that precedent, the Court balanced the petitioner’s right to operate his account against the investigating agency’s need to preserve funds allegedly connected with crime.

It therefore directed that the amount communicated by the crime agencies as disputed be placed in fixed deposits, to be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

p. 5

If the investigating agency failed to obtain such an order within that period, the fixed-deposit amount could be withdrawn by the petitioner after intimation to the police agency.

p. 5

The Court also directed that the identified Yes Bank account be unfrozen.

p. 5