Banks must unfreeze accounts except for disputed amounts held in FDRs pending further judicial orders.

The petitioner, Aditiya Pandey, approached the High Court challenging the complete freezing of his bank account (No. 100136504967) by Law Enforcement Agencies (LEA)

The petitioner alleged that the account was frozen without compliance with the procedural requirements of Sections 106(3) and 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, thereby violating his constitutional rights under Articles 14, 19(1)(g), 21, and 300A

The petitioner sought a direction for the bank to unfreeze the account while converting the specific disputed amount into a Fixed Deposit Receipt (FDR)

The petitioner relied on a prior decision of the same court in Malcolm Murayis & Ors. v. State Bank of India and Others

1. Whether the total freezing of the petitioner's bank account by law enforcement agencies, without following the mandates of BNSS, 2023, is arbitrary and illegal

2. Whether the disputed amount should be separated into a fixed deposit to allow the petitioner to operate the remainder of the account

the procedural mandates regarding the seizure of property under Sections 106(3) and 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 (successor to Section 102 of the Cr.P.C.), which require investigating agencies to report seizures to the concerned Magistrate

the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), which held that accounts cannot be indefinitely frozen without legal follow-up by cyber crime cells

The court determined that the petitioner’s case was squarely covered by the Malcolm Murayis decision

In that precedent, the court observed that cyber crime agencies often instruct banks to freeze accounts but fail to respond to emails or comply with the statutory requirement to inform the Magistrate under Section 102 of the Cr.P.C. (now BNSS)

The court reasoned that while the bank is bound by LEA instructions, the petitioner’s right to operate the account must be balanced against the investigation. By applying the Malcolm Murayis ruling mutatis mutandis, the court found that the disputed amount should be secured in a fixed deposit, while the rest of the account should be accessible to the petitioner to prevent undue hardship caused by the agency's procedural lapses

The bank was ordered to keep only the disputed amount in a fixed deposit, which is not to be liquidated unless ordered by a competent Judicial Magistrate within three months

if the police agency fails to proceed in accordance with the BNSS or obtain such orders within three months, the petitioner shall be allowed to withdraw the FD amount under intimation to the agency