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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking defreezing of his HDFC Bank account No. 50100421525654, maintained at the South Tukoganj Branch, Indore, and release of amounts placed on hold pursuant to three cyber-crime-related transactions: ₹2,278 credited on 31 December 2025, ₹820.96 credited on 14 May 2026, and ₹1,999.99 credited on 15 May 2026.

The petitioner relied on the High Court’s earlier decision in Malcolm Murayis v. State Bank of India, W.P. No. 1100 of 2024, decided on 26 April 2024.

The Court considered that precedent applicable mutatis mutandis to the present case.

Whether the petitioner’s bank account, which had been frozen pursuant to communications from cyber-crime/police agencies, should be unfrozen while securing the disputed amounts.

Whether the disputed amounts should be kept in fixed deposits pending orders from the competent Judicial Magistrate under the applicable provisions of the BNSS or other law.

The Court applied Article 226 of the Constitution, recognising the High Court’s power to issue appropriate directions where a bank account has been frozen pursuant to investigative action.

It relied on Malcolm Murayis v. State Bank of India, where it was held that disputed amounts identified by cyber-crime agencies should be retained in fixed deposits and liquidated only upon orders of the competent Judicial Magistrate within a specified period, while the remaining bank account may be permitted to operate.

The Court further directed the police agency to proceed in accordance with the relevant provisions of the BNSS or any other applicable law.

The Court found the present case materially identical to Malcolm Murayis, which concerned bank accounts frozen on the instructions of cyber-crime authorities in connection with alleged fraudulent transactions.

Applying that precedent, the Court balanced the petitioner’s right to operate his bank account against the investigative interest in preserving the allegedly tainted funds.

It therefore required only the disputed amounts reported by the crime agencies to be secured in fixed deposits, rather than continuing the freeze over the entire account.

The fixed deposits were to remain subject to orders of the competent Judicial Magistrate, and the police agency was expected to initiate appropriate proceedings within three months under the BNSS or other applicable law.

The amounts identified by the crime agencies—₹2,278, ₹820.96, and ₹1,999.99—were to be kept in fixed deposits and 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 law within that period, the fixed-deposit amounts could also be released to the petitioner, subject to intimation to the police agency.

The petition was accordingly disposed of.