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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking unfreezing of his SBI bank account, quashing of the notice dated 8 April 2024, and consequential reliefs.

The petitioner relied on the Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, concerning bank-account freezes based on communications from cyber-crime agencies. Applying that precedent, the Court considered the petitioner’s SBI account bearing No. 31792810728 and the disputed amount allegedly identified by crime agencies as connected with cyber fraud.

Whether the petitioner’s SBI bank account, frozen pursuant to communications from cyber-crime/police agencies, should be unfrozen where the investigating agency had not secured appropriate judicial orders within the prescribed period.

Whether the disputed amount allegedly linked to cyber fraud should remain subject to restraint, and if so, in what manner.

Whether the relief granted in Malcolm Murayis was applicable mutatis mutandis to the petitioner’s case.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., under which the bank may preserve the disputed amount in a fixed deposit, but the amount may be liquidated only upon orders of the competent Judicial Magistrate within three months; failing such orders, the amount may be released to the account holder under intimation to the concerned cyber-crime agency. The earlier decision referred to compliance by investigating agencies with Section 102 of the Code of Criminal Procedure, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), governing seizure/freezing of property during investigation.

The same safeguards were applied in the present case under the relevant provisions of the BNSS or other applicable law.

The Court found that the petitioner’s case was materially covered by Malcolm Murayis and therefore applied that decision mutatis mutandis.

Balancing the investigative interest in preserving any amount connected with alleged cyber fraud against the petitioner’s right to operate his bank account, the Court directed that only the disputed amount communicated by the crime agencies be placed in fixed deposits. The restraint was made conditional and time-bound: the fixed deposits 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 BNSS or other applicable law. If no such order was obtained within that period, the amount could also be withdrawn by the petitioner upon intimation to the police agency.

In the absence of such an order, the petitioner could withdraw the fixed-deposit amount under intimation to the concerned police agency. The Court consequently disposed of the petition without recording a separate order expressly quashing the notice dated 8 April 2024.