Banks must unfreeze accounts while disputed cyber-fraud amounts remain secured in fixed deposits pending Magistrate’s orders.

The petitioner filed a writ petition under Article 226 of the Constitution seeking removal of the hold, freeze, or lien imposed on his bank account maintained with Punjab National Bank

The petitioner relied on Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, contending that the same legal principles applied to his case

The disputed amount allegedly linked to cyber-crime complaints was Rs. 1,300, and the account had been frozen pursuant to information or instructions from crime-investigating agencies

Whether the petitioner’s bank account should remain frozen solely on the basis of communications or instructions issued by cyber-crime or police authorities

Whether the disputed amount of Rs. 1,300 should be preserved in a fixed deposit, subject to orders of the competent Judicial Magistrate, while permitting the petitioner to operate the remainder of the account

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the consequences of a bank-account freeze arising from a cyber-crime investigation

It followed the precedent in Malcolm Murayis & Others v. State Bank of India & Others, which directed that the disputed amount be kept in a fixed deposit and permitted liquidation only upon an order of the competent Judicial Magistrate within three months, in accordance with Section 102 of the CrPC or other applicable law

In the present case, the Court applied the corresponding procedure under the BNSS or any other law relied upon by the police agency, while protecting the disputed amount and removing the blanket freeze on the bank account

The Court found that the petitioner’s case was squarely covered by Malcolm Murayis and held that the same directions would apply mutatis mutandis

Rather than allowing the entire account to remain frozen, the Court balanced the petitioner’s right to operate his account with the investigative agency’s interest in preserving the allegedly tainted amount. Accordingly, only Rs. 1,300 was required to be secured in a fixed deposit pending lawful proceedings before the competent Judicial Magistrate. The continued freezing of the entire account was therefore considered unnecessary once the disputed amount was separately protected

Punjab National Bank was directed to keep the disputed amount of Rs. 1,300 in a fixed deposit, which could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months under the applicable provisions of the BNSS or other relevant law. If no such order was obtained within that period, the amount could also be withdrawn by the petitioner upon intimation to the police agency. The petitioner’s bank account was directed to be unfrozen