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

The petitioner challenged the freezing of his savings bank account by Kotak Mahindra Bank and sought restoration of full account operations, disclosure of the complaints or orders underlying the freeze, and a declaration that the action was unlawful.

He submitted that the case was covered by *Malcolm Murayis & Ors. v. State Bank of India & Others*, W.P. No. 1100 of 2024, decided on 26 April 2024.

The Court recorded that the disputed amount communicated by the crime agencies was Rs. 3.46/-, without specifying a unit.

Whether the bank account, frozen following communication from crime agencies, should remain frozen or be restored to operation.

Whether the disputed amount should remain secured pending action by the competent Judicial Magistrate, and on what terms.

The Court followed *Malcolm Murayis & Ors. v. State Bank of India & Others*, which directed banks to place amounts identified by cybercrime agencies in fixed deposits, with liquidation contingent on orders of the competent Judicial Magistrate within three months; failing such orders, the petitioners could withdraw the amounts after intimating the agencies.

That decision expected investigating agencies to proceed in accordance with Section 102 of the Code of Criminal Procedure, 1973, or other applicable law.

In the present case, the Court applied that approach *mutatis mutandis*, referring to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, or any other law relied upon by the police agency.

The Court considered the petitioner’s case covered by *Malcolm Murayis* and applied its safeguards to the present account-freeze dispute.

It balanced securing the disputed amount with restoring the petitioner’s access to the account: the amount reported by the crime agencies was to be placed in fixed deposits pending orders from the competent Judicial Magistrate, while the account itself was to be unfrozen.

If the police agency did not obtain the requisite orders within three months, the fixed-deposit amount could also be withdrawn after intimation to that agency.

The bank was directed to keep the disputed amount, recorded as Rs. 3.46/-, in fixed deposits, releasable only after orders of the competent Judicial Magistrate within three months; failing such orders, the petitioner could withdraw it after intimating the police agency.

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