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

The petitioner maintained Savings Bank Account No. 100220198348 with IndusInd Bank and was engaged in lawful retailer/business correspondent activities.

The account was placed on hold/frozen pursuant to information or directions received from cyber-crime/police agencies in connection with alleged cyber fraud.

The petitioner sought removal of the freeze and permission to operate the account under Article 226 of the Constitution.

Relying on Malcolm Murayis v. State Bank of India, W.P. No. 1100 of 2024, decided on 26 April 2024, the petitioner contended that the disputed amount could be secured separately while permitting operation of the account.

The Court recorded that the amount reported by the crime agencies as disputed was Rs. 2,80,104/-.

Whether the petitioner’s bank account, frozen on the basis of information supplied by cyber-crime/police agencies, should be permitted to be operated subject to protection of the disputed amount.

Whether the disputed amount of Rs. 2,80,104/- should be retained in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable criminal procedure law.

Whether the principles laid down in Malcolm Murayis v. State Bank of India were applicable mutatis mutandis to the petitioner’s case.

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs and directions to protect legal rights and prevent unjustified administrative action.

It relied on Malcolm Murayis v. State Bank of India, where the Court directed that the disputed amount identified by cyber-crime agencies be kept in fixed deposits and be liquidated only pursuant to orders of the competent Judicial Magistrate within the prescribed period, while permitting operation of the remaining account.

The earlier decision referred to compliance with Section 102 of the Code of Criminal Procedure, 1973, concerning seizure of property and reporting to the Magistrate; the present order directed the police agency to proceed under the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, or any 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 petitioner’s right to operate his bank account against the need to preserve funds allegedly connected with cyber crime, the Court adopted the safeguards formulated in the precedent: the specifically disputed sum of Rs. 2,80,104/- was to remain secured in a fixed deposit, while the account itself was to be unfrozen.

The fixed deposit could be liquidated only after an order of the competent Judicial Magistrate within three months, thereby preserving the investigating agency’s claim without continuing an unrestricted freeze over the petitioner’s entire account.

IndusInd Bank was directed to keep Rs. 2,80,104/-—the amount identified by the crime agencies—in a fixed deposit, to be liquidated only pursuant to an order 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 fixed-deposit amount could also be permitted to be withdrawn by the petitioner under intimation to the police agency.

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