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

The petitioner sought restoration of his savings accounts maintained with ICICI Bank and Kotak Mahindra Bank, along with access to associated banking services, after the accounts were frozen in connection with a cybercrime investigation.

He relied on Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. No. 1100 of 2024, decided on 26 April 2024, in which the Court had directed that disputed amounts be kept in fixed deposits pending action by the competent Magistrate.

The Court considered that precedent applicable to the petitioner’s case.

Whether the directions in Malcolm Murayis applied to the petitioner’s frozen bank account and disputed amount.

Whether the account should be unfrozen while the disputed amount remained protected pending action by the competent Judicial Magistrate.

The Court applied its decision in Malcolm Murayis & Ors. v. State Bank of India and Others, which provided for disputed funds to be placed in fixed deposits and for the investigating agency to proceed in accordance with law, including by seeking orders from the competent Judicial Magistrate within the specified period.

In the present case, the Court directed action under the relevant provisions of the BNSS or any other law relied upon by the police agency; it did not identify a specific BNSS provision.

Having found Malcolm Murayis applicable mutatis mutandis, the Court adopted its approach to balancing the petitioner’s access to his account against preservation of the amount linked to the alleged cybercrime.

It therefore directed that the disputed sum of ₹27,000 be held in a fixed deposit pending an order of the competent Judicial Magistrate, while allowing the petitioner’s bank account to be unfrozen.

If the police agency failed to proceed in accordance with law within that period, the amount could also be withdrawn by the petitioner under intimation to the agency. The petitioner’s bank account was to be unfrozen.