Cybercrime-frozen bank accounts must be unfrozen, while disputed amounts remain secured in fixed deposits pending Magistrate’s orders.

The petitioner approached the High Court under Article 226 of the Constitution seeking removal of the cybercrime-related debit freeze imposed on his SBI account bearing No. 3469095669, or alternatively, release of the hold over ₹75,000 and permission to operate the account.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024, in which the Court had directed that disputed amounts in frozen bank accounts be kept in fixed deposits and that the accounts otherwise be made operational.

The Court found the earlier decision applicable mutatis mutandis to the present case.

Whether the petitioner’s bank account, frozen pursuant to communications from cybercrime/police authorities, should be unfrozen while preserving the disputed amount in accordance with law.

Whether the disputed amount should be retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable provisions of the BNSS or other enabling law.

The Court applied Article 226 of the Constitution, recognising the High Court’s power to issue appropriate directions where a bank account has been frozen pursuant to police or cybercrime investigations.

It relied on the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others, under which the bank may retain the amount identified by investigating agencies in a fixed deposit, while permitting operation of the remaining account; liquidation of the fixed deposit should ordinarily await orders of the competent Judicial Magistrate within the prescribed period.

The Court further proceeded on the requirement that the investigating agency act in accordance with Section 102 of the CrPC, or the corresponding applicable provisions of the BNSS or other law, concerning seizure/freezing of property during investigation.

The petitioner’s case was materially covered by Malcolm Murayis, where the Court had found that bank accounts could not remain indefinitely frozen merely on the basis of cybercrime communications, particularly when the investigating authorities failed to take consequential steps before the competent Magistrate.

Applying that principle, the Court balanced the petitioner’s right to operate his bank account with the investigating agency’s interest in preserving the allegedly tainted amount.

It therefore directed that the disputed amount communicated by the crime agencies be placed in a fixed deposit, subject to liquidation only upon an order of the competent Judicial Magistrate within three months, while the petitioner’s account was otherwise unfrozen.

The SBI was directed to unfreeze the petitioner’s account No. 3469095669, while keeping the disputed amount in a fixed deposit.

The fixed deposit could be liquidated only pursuant to 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 in the fixed deposit could also be withdrawn by the petitioner under intimation to the police agency.