Cybercrime-disputed amounts must be placed in fixed deposits while remaining bank balances are defrozen.

The petitioner maintained a Savings Bank Account No. 33953177695 and an Individual Current Account No. 44939322991 with the State Bank of India, Khatiwala Tank Branch, Indore.

Debit restrictions/freezes were imposed on both accounts pursuant to information or requests allegedly received from cybercrime authorities in relation to suspected cyber-fraud transactions.

The petitioner sought removal of the restrictions, restoration of banking facilities, and segregation of only the amounts allegedly connected with cybercrime—₹18,228.34 in the savings account and ₹69,703.76 in the current account—while permitting operation of the remaining balances.

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

Whether the petitioner’s bank accounts could remain wholly frozen merely on the basis of cybercrime-related instructions, without restricting the freeze to the specifically disputed amounts?

Whether the disputed amounts should be retained separately in fixed deposits pending orders of the competent Judicial Magistrate, while the remaining account balances and banking facilities are restored?

The Court exercised its jurisdiction under Article 226 of the Constitution of India to issue appropriate directions concerning the bank-account restrictions.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others , under which the bank must retain only the amount specifically identified by cybercrime authorities as disputed in fixed deposit, subject to liquidation upon orders of the competent Judicial Magistrate; the investigating agency is expected to proceed in accordance with Section 102 of the CrPC or the corresponding applicable provisions of the BNSS, and failure to do so within the prescribed period may justify release of the amount.

The Court further applied the principle that amounts not shown to be connected with the alleged offence should not remain frozen.

The Court found the petitioner’s case to be squarely covered by Malcolm Murayis , where a blanket freeze based on cybercrime communications was treated as requiring a narrower and proportionate response.

Applying that precedent mutatis mutandis , the Court directed that only ₹18,228.34 in the savings account and ₹69,703.76 in the current account—the amounts reported as disputed—be placed in fixed deposits.

Those deposits would remain subject to orders of the competent Judicial Magistrate, with the police agency expected to take lawful steps under the relevant provisions of the BNSS or other applicable law within three months.

Since the alleged dispute related only to identified amounts, the Court held that the rest of the balances did not need to remain frozen and that the accounts should be unfrozen for normal operation.

The State Bank of India was directed to place ₹18,228.34 from the petitioner’s savings account and ₹69,703.76 from the petitioner’s current account in fixed deposits.

The fixed deposits could be liquidated only after orders of the competent Judicial Magistrate; if the police agency failed to proceed in accordance with law within three months, the petitioner could seek withdrawal of those amounts after informing the police agency.

The petitioner’s bank accounts were ordered to be unfrozen, and all remaining amounts, if any, were directed to be released from the freeze.