Banks must unfreeze accounts except disputed sums, which must be held in fixed deposits.

The petitioner invoked Article 226 seeking directions concerning his bank account, including release of the account balance except for ₹3,000.

The Court found that the case was covered by Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, and applied that decision mutatis mutandis.

Whether the bank account should remain frozen in full, or whether only the disputed amount of ₹3,000 should be retained.

Whether the disputed amount should be kept in a fixed deposit pending action by the competent Judicial Magistrate under the applicable law.

The Court applied its decision in Malcolm Murayis, which directed that the amount identified by cybercrime agencies as disputed be kept in fixed deposits and liquidated only upon orders of the competent Judicial Magistrate within three months; absent such orders, the amount could be withdrawn by the account holder after informing the cybercrime agencies.

In the present case, the Court referred to action under the relevant provisions of the BNSS or any other law relied upon by the police agency, without identifying a specific BNSS provision.

Because the petitioner’s case was considered materially covered by Malcolm Murayis, the Court adopted that precedent’s approach.

It directed the bank to ring-fence only the ₹3,000 identified as disputed, pending a competent Magistrate’s order within three months, and held that the remainder of the account balance did not need to remain frozen.

The bank was directed to keep ₹3,000 in a fixed deposit, to be liquidated only upon an order of the competent Judicial Magistrate within three months; failing such an order, the petitioner could withdraw it after informing the police agency. The petitioner’s account was to be unfrozen, and any remaining balance was not to be frozen.