Cyber-fraud-linked disputed sums must be placed in fixed deposits; remaining bank balances must be unfrozen.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the freeze/hold placed on her HDFC Bank account bearing Account No. 50100566567488 and consequential directions.

The Court noted that the petition was covered by its earlier decision in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

In the present case, the cyber-crime agencies had identified disputed credits amounting to ₹40,133.70 in the petitioner’s account.

Whether the petitioner’s bank account, frozen pursuant to communications from cyber-crime agencies, should be unfrozen subject to safeguarding the disputed amount.

Whether the disputed amount of ₹40,133.70 should be retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable law.

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

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, that where an account is frozen on the basis of cyber-crime allegations, the disputed amount may be segregated and placed in a fixed deposit, while the undisputed balance should not remain frozen indefinitely.

The Court further required the police agency to proceed in accordance with the relevant provisions of the BNSS or other applicable law and obtain appropriate orders from the competent Judicial Magistrate within three months.

The earlier decision had referred to compliance with Section 102 of the CrPC concerning seizure of property and reporting to the Magistrate.

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

Applying that precedent, it balanced the investigative interest in preserving allegedly tainted funds against the petitioner’s right to operate her bank account.

Accordingly, only the identified disputed amount of ₹40,133.70 was required to be placed in a fixed deposit, to be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

Since the remaining amount was not shown to be connected with the alleged cyber offence, there was no justification for continuing the freeze over the entire account.

HDFC Bank was directed to place the disputed amount of ₹40,133.70 in a fixed deposit, which could be liquidated only after orders of the competent Judicial Magistrate within three months under the applicable BNSS provisions or other law.

The petitioner’s bank account was directed to be unfrozen, and any remaining amount in the account was ordered to be released from the freeze.