Cybercrime-linked bank accounts must be unfrozen; disputed sums remain in fixed deposits pending Magistrate orders within three months.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the hold/freeze imposed on her Bank of Maharashtra account bearing Account No. 60586283131.

Her counsel relied on the High Court’s earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, concerning bank-account freezes based on communications from cyber-crime agencies.

In Malcolm Murayis, the Court had directed that the disputed amount identified by cyber-crime agencies be placed in fixed deposits, subject to orders of the competent Judicial Magistrate within three months, while permitting operation of the remaining account.

The Court held that the earlier decision applied mutatis mutandis to the present case.

Whether the petitioner’s bank account, frozen pursuant to information or directions received from crime-investigating agencies, should be unfrozen subject to preservation of the disputed amount.

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

The Court applied Article 226 of the Constitution to examine the legality of the continuing freeze on the petitioner’s bank account.

It relied on the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., under which a bank account should not remain wholly frozen merely on the basis of an investigating agency’s communication where the disputed amount can be secured separately; the disputed amount may be placed in a fixed deposit and dealt with pursuant to orders of the competent Judicial Magistrate.

The Court further required the police agency to proceed in accordance with the relevant provisions of the BNSS or other applicable law concerning seizure or restraint of property connected with an offence.

The Court found that the present case was governed by the ratio of Malcolm Murayis and applied that decision mutatis mutandis.

Balancing the investigative interest in preserving allegedly tainted funds against the petitioner’s right to operate her bank account, the Court directed that only the amount reported as disputed by the crime agencies be secured in a fixed deposit.

The investigating agency was required to obtain appropriate orders from the competent Judicial Magistrate within three months under the applicable law.

Since the disputed amount could thereby be protected without continuing a blanket restraint on the account, the Court directed that the petitioner’s bank account be unfrozen.

The Bank of Maharashtra was directed to unfreeze the petitioner’s account while placing the disputed amount, as informed by the crime agencies, 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 obtain such an order within that period, the amount in the fixed deposit could also be released to the petitioner, under intimation to the police agency.