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

The petitioner sought relief under Article 226 of the Constitution after IDBI Bank froze its current account.

Relying on Malcolm Murayis & Ors. v. State Bank of India & Ors. and Archana v. State of Madhya Pradesh & Ors., the petitioner sought permission to operate the account.

The Court recorded that the disputed amount was Rs. 3,56,900, arising from 26 transactions.

Whether the petitioner’s bank account should remain frozen in full when the disputed transactions total Rs. 3,56,900.

Whether the disputed amount should instead be secured separately while permitting the petitioner to operate the account.

Article 226 empowers the High Court to grant appropriate relief against an unlawful or disproportionate restriction.

In Malcolm Murayis, the Court directed that disputed cyber-fraud funds be kept in fixed deposits, subject to orders by the competent Magistrate within three months, failing which the funds could be withdrawn under intimation to the cybercrime agencies.

In Archana, the Court applied the Ministry of Home Affairs’ SOP dated 10 April 2026 and the principle of proportionality: account restraints should ordinarily be limited to the suspected amount where that is sufficient to safeguard the investigation, and the grievance mechanism and applicable legal procedures should be followed.

The present order also required the police agency to proceed under the relevant provisions of the BNSS or other applicable law.

The Court considered Malcolm Murayis and Archana applicable mutatis mutandis.

It therefore distinguished the disputed amount from the remainder of the account: the Rs. 3,56,900 was to be preserved in a fixed deposit, while the account itself was to be unfrozen so the petitioner could operate it.

This approach preserved the funds identified as disputed while avoiding a continuing freeze of the entire account.

The Bank could address any further complaint concerning another transaction in accordance with law and the SOP.

The disputed amount may be liquidated only upon an order by the competent Judicial Magistrate within three months; if no such order is passed within that period, the petitioner may withdraw the fixed-deposit amount under intimation to the police agency.

The petition was disposed of accordingly.