Banks must unfreeze accounts while keeping disputed cyber-fraud amounts in fixed deposits pending magistrate orders.

The petitioner invoked Article 226 of the Constitution seeking removal of liens of ₹2,484 and ₹997 marked on his bank account, totalling ₹3,481.

Relying on Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. Nos. 1100/2024 and 1185/2024, decided on 26 April 2024, the petitioner submitted that the case was covered by that decision.

The Court considered the prior decision and disposed of the petition by applying it mutatis mutandis.

1. Whether the bank should be directed to remove the liens marked on the petitioner’s account in connection with the disputed amount.

2. Whether the disputed amount should instead be secured in fixed deposits pending action by the competent Judicial Magistrate, with the account unfrozen.

Article 226 empowers the High Court to grant appropriate relief in the circumstances of the case.

The Court applied Malcolm Murayis, which directed that an amount identified by cybercrime agencies as disputed be kept in fixed deposits and remain unavailable for withdrawal unless and until orders were passed by the competent Judicial Magistrate within three months; if the agency failed to proceed in accordance with law within that period, the amount could be withdrawn under intimation to the agency.

The Court also referred to action by the police under the relevant provisions of the BNSS or any other applicable law, without specifying a particular provision.

The Court found the present case covered by Malcolm Murayis and applied that decision mutatis mutandis.

Accordingly, rather than directing immediate release of the disputed funds, it ordered the bank to secure ₹3,481 in fixed deposits pending orders of the competent Judicial Magistrate, while requiring the police agency to proceed in accordance with law within three months.

It separately directed that the petitioner’s bank account be unfrozen as expeditiously as possible.

The bank was directed to place the disputed amount of ₹3,481 in fixed deposits, to be liquidated only after orders of the competent Judicial Magistrate within three months; failing such action, the petitioner could withdraw the amount under intimation to the police agency.

The petitioner’s bank account was also to be unfrozen expeditiously.