Cyber-fraud freezes must preserve only disputed sums while allowing account holders to operate remaining balances.

The petitioner sought relief under Article 226 of the Constitution after HDFC Bank froze his savings account.

He asked the Court either to direct immediate unfreezing or, alternatively, to restrict the hold to two disputed credits of Rs. 49,750 and Rs. 49,751, received on 20 September 2026, while allowing him to operate the rest of the account.

Relying on Malcolm Murayis v. State Bank of India and Archana v. State of Madhya Pradesh, the petitioner argued that only the disputed sums should remain secured.

The Court considered those decisions applicable to the case.

1. Whether the entire bank account should remain frozen when the identified disputed amounts can be secured separately.

2. Whether the disputed amounts should be retained in fixed deposits pending action by the competent Judicial Magistrate, while the petitioner is permitted to operate the account.

Under Article 226, the Court may grant appropriate relief where a bank-account freeze is disproportionate to the suspected proceeds of crime.

In Malcolm Murayis v. State Bank of India, the Court directed that disputed amounts be placed in fixed deposits and permitted their withdrawal if the competent Magistrate did not pass an order within the specified period.

In Archana v. State of Madhya Pradesh, the Court relied on the Ministry of Home Affairs’ Standard Operating Procedure dated 10 April 2026 and emphasized proportionality: where practicable, only the suspected amount should be subject to a lien or debit freeze, while continuation of a full-account freeze requires recorded reasons.

The present Court held that these decisions applied mutatis mutandis.

The Court applied the proportionality approach in Malcolm Murayis and Archana to the two identified credits.

It directed that those sums be secured in fixed deposits rather than maintaining a freeze on the entire account.

This preserved the disputed funds while allowing the petitioner to access the remainder of the account.

The Court also left open the Bank’s ability to act lawfully if it received a complaint concerning another transaction, having regard to the SOP.

Those deposits may be liquidated only after an order by the competent Judicial Magistrate within three months; if no such order is passed within that period, the petitioner may withdraw the amounts after informing the Police agency.

The Bank was directed to unfreeze the account and permit the petitioner to operate it, without prejudice to lawful action concerning any other reported transaction.