Bank must unfreeze account and move disputed cyber-fraud amounts to fixed deposits pending magistrate orders.

The petitioner, Anam Ahmed, filed a writ petition under Article 226 of the Constitution of India seeking a direction to the Central Bank of India to remove a freeze/hold placed on her bank account (No. 3343452004).

The account was frozen following intimations from cyber crime agencies alleging involvement in cyber fraud.

The petitioner contended that the case was identical to the precedent of Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where the court addressed bank accounts frozen by police authorities without following due process.

1. Whether the bank account of the petitioner can remain frozen indefinitely without adherence to statutory procedures by investigating agencies

2. Whether the petitioner is entitled to operate the bank account while securing the disputed amount allegedly linked to cyber crime

Section 102 of the Code of Criminal Procedure (Cr.P.C.) [now relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)], which mandates that investigating agencies inform the concerned Magistrate regarding the seizure of property.

The precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (2024), which established that freezing orders must not indefinitely paralyze an account holder’s legitimate funds if investigate agencies fail to respond or follow procedure.

The court observed that cyber crime cells often request banks to freeze accounts but fail to respond to judicial inquiries or attend court proceedings, demonstrating an irresponsible approach.

Applying the mutatis mutandis principle from the Malcolm Murayis case, the court reasoned that while the disputed amount must be protected, the entire account should not be rendered inaccessible indefinitely.

The court determined that the balance between state investigation and the petitioner's rights could be maintained by converting only the disputed "marked" amount into a fixed deposit, pending an order from a competent Judicial Magistrate, rather than keeping the entire account frozen.

The bank was ordered to keep only the disputed amount (as identified by the crime agencies) in a fixed deposit, which may only be liquidated upon orders from a competent Judicial Magistrate within three months.

If the investigating agency fails to proceed in accordance with the law (BNSS) within that timeframe, the petitioner is permitted to withdraw the fixed deposit amount under intimation to the agency.

The petition was disposed of with these directions.