Cyber-fraud account freezes must be limited to disputed amounts pending Magistrate’s orders.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the lien/freeze on his Axis Bank Account No. 92201000871301. The account had been frozen pursuant to NCRP Complaint Acknowledgement No. 32706260063403 concerning an alleged cyber-fraud-linked credit of ₹20,000.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, where the Court directed that the disputed amount be secured in a fixed deposit while permitting operation of the remaining account. The Court found the present case to be squarely covered by that decision.

Whether the petitioner’s bank account, frozen on the basis of a cyber-crime complaint involving an alleged disputed credit of ₹20,000, should be unfrozen subject to safeguarding the disputed amount.

Whether the disputed ₹20,000 should be retained in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court exercised its jurisdiction under Article 226 of the Constitution to grant appropriate relief against the continued freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others, under which the disputed amount identified by cyber-crime authorities is to be kept in a fixed deposit and may be liquidated only upon orders of the competent Judicial Magistrate within the prescribed period; the investigating agency must proceed in accordance with Section 102 of the CrPC or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

The undisputed balance in the account is not required to remain frozen.

The Court held that the factual and legal circumstances were materially identical to those in Malcolm Murayis and therefore applied that decision mutatis mutandis.

Balancing the investigative interest in preserving the alleged cyber-fraud proceeds with the petitioner’s right to operate his bank account, the Court directed that only the disputed ₹20,000 be secured in a fixed deposit. The amount could be released or liquidated only pursuant to an order of the competent Judicial Magistrate within three months, during which the police agency was expected to take steps under the applicable provisions of the BNSS or other governing law.

Since the remaining funds were not shown to be connected with the alleged offence, they were not liable to continued freezing.

Any remaining amount in the account was directed to be defrozen.