Cyber-fraud account freezes must be lifted except disputed sums held in fixed deposits pending magistrate orders.

The petitioner sought relief under Article 226 of the Constitution for removal of the hold/freeze on his bank account

The Court noted that the matter was covered by Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. Nos. 1100/2024 and 1185/2024, decided on 26 April 2024

The amount reported by the crime agencies as disputed was ₹1,600

1. Whether the petitioner’s bank account should remain frozen in full where the crime agencies had identified only ₹1,600 as disputed

2. Whether the disputed amount should be preserved pending action by the competent Judicial Magistrate under the applicable law

The Court applied the directions in Malcolm Murayis, under which the bank is to place the disputed amount in fixed deposit, to be liquidated only after orders of the competent Judicial Magistrate within three months; if the police agency does not proceed in accordance with law within that period, the amount may be released to the account holder after intimation to the agency

The Court applied that precedent mutatis mutandis and referred to proceedings under the relevant provisions of the BNSS or any other law relied upon by the police agency

The Court considered the present case materially covered by Malcolm Murayis and applied its safeguards to the petitioner’s account

Because the crime agencies had identified only ₹1,600 as disputed, it directed that only that sum be preserved in a fixed deposit pending appropriate orders, while the remaining balance was not required to remain frozen

The bank was directed to place ₹1,600 in a fixed deposit, subject to the stated three-month period for orders by the competent Judicial Magistrate; failing such orders, the amount may be withdrawn by the petitioner after informing the police agency. The petitioner’s account was to be unfrozen, and any remaining amount was to be released from the freeze