Banks must unfreeze accounts while securing only disputed cybercrime amounts in fixed deposits.

The petitioner sought a direction to remove the freeze or hold on its Canara Bank account, alleging that it had been imposed without lawful authority.

The petitioner relied on *Malcolm Murayis & Ors. v. State Bank of India & Ors.*, W.P. No. 1100 of 2024, and the guidelines in *Archana v. State of Madhya Pradesh & Ors.*, decided on 27 July 2026.

The Court considered those decisions applicable to the case.

The order does not specify the disputed amount or further particulars of the transaction giving rise to the freeze.

1. Whether the disputed amount in the petitioner’s account should be secured separately while permitting the petitioner to operate the account.

2. Whether the disputed amount could remain secured indefinitely without the police agency obtaining an order from the competent Judicial Magistrate.

The Court applied the principles in *Malcolm Murayis*, under which the disputed amount may be placed in a fixed deposit and retained pending appropriate action by the competent Judicial Magistrate within three months; failing such action, the amount may be released to the account holder under intimation to the police agency.

It also applied *Archana*, which relied on the Ministry of Home Affairs’ Standard Operating Procedure dated 10 April 2026 and held that account freezes in cybercrime cases should be proportionate, ordinarily limited to the suspected amount where that is sufficient, and subject to the prescribed grievance process and timelines.

The present Court directed the police agency to proceed under the relevant provisions of the BNSS or other applicable law.

Treating *Malcolm Murayis* and *Archana* as applicable *mutatis mutandis*, the Court balanced preservation of the disputed funds against the petitioner’s ability to conduct banking operations.

It ordered that only the disputed amount be kept in a fixed deposit and that the account otherwise be unfrozen and available for operation.

The deposit would remain subject to an order of the competent Judicial Magistrate within three months; absent such an order, the petitioner could withdraw it after notifying the police agency.

The Court also left the bank free to act according to law and the SOP if it received a complaint concerning another transaction.

The bank was directed to unfreeze the petitioner’s account and permit its operation, while keeping the disputed amount in a fixed deposit.

That amount could be liquidated only upon an order of the competent Judicial Magistrate within three months; if no such order was passed, the petitioner could withdraw it under intimation to the police agency.