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

The petitioner approached the High Court under Article 226 of the Constitution seeking a direction to Fino Payments Bank to remove the freeze/hold/lien on her bank account No. 20142402391.

The petitioner’s counsel submitted that the case was covered by Malcolm Murayis & Others v. State Bank of India & Others, W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024.

The account had been frozen pursuant to information received from crime/cyber-crime agencies, and an amount of ₹4,648 was identified as the disputed amount allegedly connected with cyber-crime transactions.

The Court considered the earlier decision, in which it had directed that disputed amounts be kept in fixed deposits while permitting operation of the bank accounts, subject to proceedings before the competent Judicial Magistrate.

Whether the petitioner’s bank account, frozen pursuant to communications from cyber-crime/police agencies, should be unfrozen subject to safeguarding the disputed amount of ₹4,648?

Whether the disputed amount should be retained in a fixed deposit pending orders of the competent Judicial Magistrate and compliance by the investigating agency with the applicable law?

The Court exercised its writ jurisdiction under Article 226 of the Constitution of India to issue appropriate directions concerning the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, that where a bank account is frozen on the request of cyber-crime authorities, the disputed amount may be secured in a fixed deposit, while the account itself may be unfrozen, subject to orders of the competent Judicial Magistrate.

The earlier decision proceeded on the requirement that investigating agencies act in accordance with Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, and place the seizure/freezing before the competent Magistrate within the prescribed period.

The Court found the petitioner’s case to be covered mutatis mutandis by the principles in Malcolm Murayis.

Balancing the petitioner’s right to operate her bank account against the investigating agency’s interest in preserving allegedly tainted funds, the Court directed that only the disputed amount of ₹4,648 be secured in a fixed deposit.

The remainder of the account was therefore required to be unfrozen.

The fixed deposit could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months, thereby ensuring judicial oversight and requiring the police agency to proceed in accordance with the BNSS or other applicable law.

Fino Payments Bank was directed to unfreeze the petitioner’s bank account, while retaining ₹4,648 in a fixed deposit.

The fixed deposit could be liquidated only after an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with the applicable law within that period, the amount kept in the fixed deposit could also be permitted to be withdrawn by the petitioner, under intimation to the police agency.