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

The petitioner sought relief under Article 226, including removal of the hold, freeze or lien on his State Bank of India account, which had been placed following a complaint.

He submitted that his case was covered by Malcolm Murayis & Ors. v. State Bank of India & Ors. and relied also on the later order in Archana v. State of Madhya Pradesh & Ors., which discussed the Ministry of Home Affairs’ Standard Operating Procedure (SOP) dated 10 April 2026 for accounts put on hold through the NCRP-CFCFRMS.

The Court found those decisions applicable to the petitioner’s case.

1. Whether the petitioner’s frozen bank account should be unfrozen, subject to preservation of the disputed amount.

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

Under Article 226, the High Court may grant appropriate relief concerning a bank-account freeze.

The Court applied the principles in Malcolm Murayis and Archana mutatis mutandis.

As discussed in Archana, the 10 April 2026 SOP establishes a grievance mechanism for accounts placed on hold through the NCRP-CFCFRMS and requires proportionate action: ordinarily, a restraint should be limited to the suspected amount where that is sufficient, while a broader freeze requires justification.

The police are expected to proceed under the relevant provisions of the BNSS or other applicable law; the Court’s cited Malcolm Murayis decision had referred to compliance with Section 102 of the CrPC.

The Court considered the petitioner’s case in light of the two cited decisions and held that their approach applied mutatis mutandis.

It balanced preservation of the disputed funds against the petitioner’s ability to operate the account: the disputed amount was to be placed in a fixed deposit, while the account itself was to be unfrozen.

The police were given three months to proceed in accordance with law and obtain orders from the competent Judicial Magistrate; if they did not, the fixed deposit could be withdrawn by the petitioner, with intimation to the police agency.

The bank account was to be unfrozen and the petitioner permitted to operate it.

The disputed amount was to be kept in a fixed deposit and could be liquidated only upon an order of the competent Judicial Magistrate within three months; failing such an order, the petitioner could withdraw that amount after informing the police agency.

The bank remained free to act in accordance with law if it received a complaint concerning another transaction, having regard to the SOP.