Bank accounts shall be unfrozen while disputed cyber-fraud amounts remain in fixed deposits pending Magistrate’s orders.

The petitioner, Shree Mayur Seeds and Agritech, through its proprietor Ankit Jadoun, maintained Current Account No. 30005501070 with ICICI Bank, Ujjain.

The account was frozen pursuant to information or instructions received from crime/cyber-crime agencies alleging that an amount connected with cyber crime had been credited into the account.

The petitioner invoked Article 226 of the Constitution and sought de-freezing of the account and permission to operate it.

The petitioner relied upon Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, where the High Court had directed that the disputed amount be kept in fixed deposit and permitted operation of the remaining account, subject to further orders of the competent Judicial Magistrate.

In the present case, the disputed amount identified by the crime agencies was Rs. 12,000.

Whether the petitioner’s bank account, frozen on the instructions of crime/cyber-crime agencies in relation to an alleged cyber-fraud transaction, should be permitted to operate subject to safeguarding the disputed amount?

Whether the disputed amount of Rs. 12,000 should be segregated in a fixed deposit pending orders of the competent Judicial Magistrate and further action by the police agency under law?

The Court applied Article 226 of the Constitution, permitting judicial review and appropriate directions where a bank account has been frozen pursuant to investigative action.

It relied on the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, that the disputed amount may be secured in a fixed deposit while the account holder is allowed to operate the balance of the account.

The earlier decision referred to compliance with Section 102 of the Code of Criminal Procedure, 1973, concerning seizure of property suspected to be connected with an offence and reporting such seizure to the jurisdictional Magistrate.

In the present matter, the Court directed the police agency to proceed under the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, or any other applicable law, within three months.

The Court found that the present case was materially covered by the principle in Malcolm Murayis and applied that decision mutatis mutandis.

Rather than allowing the entire account to remain frozen, the Court balanced the petitioner’s right to operate its bank account against the investigative interest in preserving the allegedly tainted amount.

Accordingly, only the disputed sum of Rs. 12,000 was required to be placed in a fixed deposit.

Its liquidation was made subject to orders of the competent Judicial Magistrate, while the account itself was directed to be unfrozen.

The direction was also time-bound: the police agency was expected to take lawful steps within three months, failing which the petitioner could seek withdrawal of the fixed-deposit amount after intimating the agency.

ICICI Bank was directed to unfreeze the petitioner’s account and permit its operation, while retaining Rs. 12,000 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with the applicable law within that period, the amount could also be withdrawn by the petitioner under intimation to the concerned police agency.