Cyber-fraud-linked bank accounts may be unfrozen while disputed amounts remain secured in fixed deposits pending Magistrate orders.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the freeze on his savings bank account maintained with Union Bank of India, Rajgarh Branch, and restoration of online and digital banking facilities, including UPI, NEFT and RTGS services.

The petitioner relied on the High Court’s earlier decision in Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

The account had been frozen pursuant to information or directions received from crime agencies in connection with alleged cyber-crime transactions.

The amount alleged to be connected with such transactions was quantified at ₹4,03,876.

The Court treated the earlier decision as applicable mutatis mutandis to the petitioner’s case.

Whether the petitioner’s frozen bank account should be unfrozen, subject to safeguarding the disputed amount allegedly connected with cyber-crime transactions?

Whether the disputed amount of ₹4,03,876 should be placed in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable law?

Whether the principles laid down in Malcolm Murayis & Others v. State Bank of India and Others applied to the present case?

The Court applied the principle laid down in Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, decided on 26 April 2024, under which a bank account frozen at the request of cyber-crime authorities may be unfrozen while the disputed amount is preserved in a fixed deposit.

In Malcolm Murayis, the Court had directed that the disputed amount be kept in fixed deposits and permitted liquidation only upon orders of the competent Judicial Magistrate within three months, while observing that the investigating agency was expected to proceed in accordance with Section 102 of the CrPC or other applicable law.

In the present case, the Court applied the corresponding requirement that the police agency proceed under the relevant provisions of the BNSS or any other applicable law.

The Court found the present matter substantially covered by the precedent in Malcolm Murayis, which dealt with bank-account freezes based on cyber-crime agency communications.

Following that principle, the Court balanced the petitioner’s right to operate his bank account against the need to preserve the amount allegedly linked to cyber-crime.

It therefore directed that ₹4,03,876 be segregated and maintained in a fixed deposit, ensuring that the alleged tainted amount remained protected while permitting ordinary operation of the remaining account.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months, thereby requiring the investigating agency to take timely action under the BNSS or other applicable law.

The respondent bank was directed to keep the disputed amount of ₹4,03,876 in a fixed deposit, to be liquidated only upon orders of the competent Judicial Magistrate within three months.

If the police agency failed to obtain appropriate orders within that period, the amount in the fixed deposit could also be permitted to be withdrawn by the petitioner, under intimation to the police agency.

The petitioner’s bank account was directed to be unfrozen, subject to the aforesaid protection of the disputed amount.