Bank Must Unfreeze Account and Secure Disputed Cyber-Fraud Amounts in Fixed Deposits Pending Judicial Orders status.

The petitioner, Ayush Raghuwanshi, held a bank account (No. 35470100017004) with the Bank of Baroda, Aerodrum Road Branch, Indore.

This account was frozen by the bank following instructions from various cyber cell police agencies investigating alleged cyber frauds.

The petitioner approached the High Court under Article 226 of the Constitution of India seeking a writ of Mandamus to unfreeze the account, asserting that the case was identical to a previously decided matter, Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024).

1. Whether the bank account of the petitioner, frozen on the basis of police intimations regarding cyber fraud, should be unfrozen to allow for continued operation.

2. Whether the investigating agencies are required to adhere to statutory procedures under the Bharatiya Nagarik Suraksha Sanhita (BNSS) or Cr.P.C. when seizing or freezing bank accounts.

The court primarily applied the legal principles established in Malcolm Murayis & Ors. v. State Bank of India and Others (2024), which governs the balancing of police investigative powers with a citizen's right to operate a bank account.

The court emphasized compliance with Section 102 of the Code of Criminal Procedure (Cr.P.C.)—and by extension, the relevant provisions of the successor Bharatiya Nagarik Suraksha Sanhita (BNSS)—which mandates that police must report seizures to the concerned Magistrate.

The court found that the petitioner’s situation was squarely covered by the Malcolm Murayis precedent, where accounts were frozen without proper notice or adherence to procedural safeguards.

In that precedent, the court noted that cyber crime cells often fail to respond to judicial or bank inquiries, demonstrating an "irresponsible approach".

To resolve the impasse, the court reasoned that while the disputed amount (linked to fraud) must remain secured to protect the investigation, the petitioner should not be deprived of the entire account's utility. Consequently, it applied the mechanism of isolating the disputed funds into a fixed deposit while allowing the remainder of the account to be operational.

The bank was ordered to keep the specific disputed amount, as identified by the crime agencies, in a fixed deposit (FD). This FD is only to be liquidated upon orders from a competent Judicial Magistrate within three months, pending the police agency's lawful proceedings under the BNSS or other applicable laws. If the agencies fail to proceed within this timeframe, the petitioner may withdraw the FD amount under intimation to the agency.