Banks must unfreeze accounts while retaining disputed cybercrime amounts in fixed deposits pending Magistrate’s orders.

In brief

The question

1. Whether the hold/freeze on the petitioner’s Bandhan Bank account should be removed, subject to safeguarding the disputed amount identified by the crime agencies.

The court held

The petition was disposed of.

It also directed

The respondents/Bank were directed to keep the disputed amount reported by the crime agencies in a fixed deposit, to be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

In the absence of such an order, the amount could be withdrawn by the petitioner under intimation to the police agency.

The hold on the petitioner’s Bandhan Bank account No. 20200118000622 was directed to be removed/unfrozen.

01Facts

The petitioner invoked Article 226 of the Constitution seeking removal of the hold on her Bandhan Bank account bearing No. 20200118000622 and consequential reliefs.

¶ 1

Her counsel contended that the matter was covered by Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024.

¶ 2

In Malcolm Murayis, the Court had dealt with bank-account freezes based on communications from cyber-crime authorities and directed that the disputed amounts be placed in fixed deposits, subject to orders of the competent Magistrate.

¶ 3

Applying that precedent, the Court considered the petitioner’s account and the disputed amount reported by the crime agencies.

¶ 4–5

02Issues

i.1. Whether the hold/freeze on the petitioner’s Bandhan Bank account should be removed, subject to safeguarding the disputed amount identified by the crime agencies.

¶ 1, 4–5

ii.2. Whether the disputed amount should be retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable provisions of the BNSS or other relevant law.

¶ 5

03Law Applied

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs and directions to protect legal rights and prevent arbitrary interference with a bank account.

It relied on the principle formulated in Malcolm Murayis & Ors. v. State Bank of India & Ors., namely that where an account is frozen pursuant to cyber-crime authorities’ communications, the disputed amount may be segregated and placed in a fixed deposit, while the account is otherwise permitted to operate; liquidation of the fixed deposit is to remain subject to orders of the competent Judicial Magistrate within the prescribed period.

¶ 3

The Court further directed the police agency to proceed in accordance with the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), or any other applicable law.

¶ 5

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 102

04Reasoning

The Court found that the petitioner’s case was covered mutatis mutandis by Malcolm Murayis.

¶ 4

Following that precedent, it balanced the petitioner’s right to operate her bank account against the need to preserve any amount connected with the alleged cyber-crime.

¶ 5

Instead of allowing the entire account to remain frozen, the Court directed that only the disputed amount communicated by the crime agencies be placed in a fixed deposit.

¶ 5

That amount could be liquidated only upon orders of the competent Judicial Magistrate within three months; failing such orders, it could be released to the petitioner under intimation to the police agency.

¶ 5