Cybercrime-flagged accounts must be unfrozen, with disputed sums held in fixed deposits pending magistrate orders.

The petitioner sought removal of the freeze on his State Bank of India account.

The Court noted that the cyber-crime agencies had identified ₹2,033 in the account as disputed.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. Nos. 1100 and 1185 of 2024, which directed that disputed funds be kept in fixed deposits pending action by the investigating agency.

1. Whether the petitioner’s bank account should remain frozen on account of the disputed sum of ₹2,033

2. Whether the disputed sum should be retained separately pending action by the police agency, while the balance is released to the petitioner

The Court applied its decision in Malcolm Murayis, holding that where cyber-crime agencies identify a disputed amount in a bank account, the bank may retain that amount in a fixed deposit pending orders of the competent Judicial Magistrate.

The investigating agency is expected to proceed in accordance with the applicable law; if it does not obtain the requisite orders within three months, the amount may be withdrawn by the account holder after giving intimation to the agency.

The remaining, undisputed balance need not remain frozen.

The present order refers to the relevant provisions of the BNSS or other applicable law but does not identify a specific provision.

The Court considered the present case covered mutatis mutandis by Malcolm Murayis.

Applying that approach, it directed that only the ₹2,033 identified by the crime agencies be placed in a fixed deposit, subject to orders of the competent Judicial Magistrate within three months.

It found no basis to continue freezing the petitioner’s account or any other funds in it.

The bank was directed to keep ₹2,033 in a fixed deposit, releasable only after orders of the competent Judicial Magistrate; if no such orders are passed within three months, the petitioner may withdraw that amount after informing the police agency.

The petitioner’s account is to be unfrozen, and any remaining balance is to be released.