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

The petitioner sought relief under Article 226 of the Constitution, alleging that Axis Bank had frozen its current account and asking that it be allowed to operate the account.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Ors. and on the Standard Operating Procedure (SOP) discussed in Archana v. State of Madhya Pradesh & Ors.

The Court recorded that the disputed amount identified in the petition was Rs. 5,48,921.

Whether the petitioner’s account should remain frozen in full, or be unfrozen while the disputed amount is secured separately.

Whether the disputed amount should remain secured pending action by the competent Judicial Magistrate under the applicable law.

Article 226 empowers the High Court to grant appropriate relief where the handling of a frozen bank account warrants intervention.

In Malcolm Murayis, the Court directed that the amount alleged to be connected with cyber fraud be kept in fixed deposits, subject to orders of the competent Judicial Magistrate within three months; absent such orders, the amount could be withdrawn by the petitioners under intimation to the cyber-crime agencies.

In Archana, the Court considered the Ministry of Home Affairs’ SOP dated 10 April 2026 and emphasized that account restraints should be proportionate, with a lien or partial freeze preferred where it adequately secures the suspected amount.

The Court held that these decisions applied mutatis mutandis to the present case.

Applying Malcolm Murayis and Archana, the Court treated the disputed amount as capable of being secured separately rather than maintaining a freeze on the petitioner’s entire account.

It directed that Rs. 5,48,921 be placed in a fixed deposit while the account was unfrozen, preserving the disputed sum pending action by the competent Judicial Magistrate.

The Court also allowed the Bank to take appropriate action in accordance with law if it received a complaint concerning another transaction, having regard to the SOP.

The disputed amount could be liquidated only after orders were passed by the competent Judicial Magistrate within three months; if no such orders were passed within that period, the amount could be withdrawn by the petitioner under intimation to the Police agency.

The petition was disposed of in those terms.