Cybercrime-linked bank accounts must be unfrozen; disputed amounts shall remain in fixed deposits pending Magistrate’s orders.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking directions to Punjab National Bank and the concerned authorities to defreeze his bank account and permit its operation without hindrance.

The petitioner’s counsel submitted that the case was covered by the High Court’s 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 account, frozen pursuant to information or directions from cyber-crime authorities, should be permitted to be operated and consequently unfrozen?

Whether the amount allegedly linked to cyber crime should be segregated and kept in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable legal provisions?

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs and directions to secure legal and constitutional rights.

It relied on the precedent in Malcolm Murayis & Ors. v. State Bank of India & Others, which held that where bank accounts are frozen on the basis of cyber-crime agency communications, the disputed amount may be retained in a fixed deposit and may be liquidated only after orders of the competent Judicial Magistrate within the prescribed period.

The Court found that the principle laid down in Malcolm Murayis applied mutatis mutandis to the petitioner’s case.

Accordingly, rather than permitting an indefinite restraint on the petitioner’s entire account, the Court directed the Bank to identify and segregate the amount reported by the crime agencies as disputed and to place that amount in a fixed deposit.

The amount identified by the crime agencies as disputed was to be kept in a fixed deposit and could be liquidated only upon orders of the competent Judicial Magistrate within three months. If such orders were not obtained within that period, the fixed-deposit amount could be released to the petitioner under intimation to the police agency.