Cybercrime-linked bank accounts must be unfrozen except disputed sums secured in fixed deposits pending magistrate orders.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the hold/freeze on his ICICI Bank savings account bearing No. 091601510690, permission to operate the account and continue his retailer/business correspondent services, and restoration of his Retailer ID.

The account had been frozen pursuant to information received from police/cyber-crime agencies concerning suspected cyber-fraud transactions.

The Court found that the petitioner’s case was squarely covered by Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024.

In the present case, the disputed amount was identified as ₹2,88,000.

Whether the petitioner’s bank account could continue to remain completely frozen merely on the basis of information/intimation from cyber-crime or police authorities regarding suspected fraudulent transactions.

Whether the disputed amount of ₹2,88,000 should be segregated and retained in a fixed deposit pending orders of the competent Judicial Magistrate, while the remaining account balance is released.

Whether the bank account should be unfrozen and made operational subject to protection of the disputed amount.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the consequences of a bank-account freeze arising from an investigation into suspected cyber-fraud.

It relied on the principle stated in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, that the disputed amount may be retained in a fixed deposit and liquidated only pursuant to an order of the competent Judicial Magistrate, while the undisputed balance should not remain frozen indefinitely.

The Court also required the police agency to proceed in accordance with the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), or any other applicable law, within three months.

The earlier decision had referred to the corresponding obligation under Section 102 of the Code of Criminal Procedure concerning seizure and reporting to the Magistrate.

The Court held that the petitioner’s case was materially identical to the circumstances considered in Malcolm Murayis, where complete freezing of accounts on the basis of cyber-crime communications was found to require judicial control over the disputed funds.

Applying that precedent mutatis mutandis, the Court balanced the investigative interest in preserving allegedly tainted funds against the petitioner’s right to access the remainder of his account.

It therefore directed that ₹2,88,000—the amount identified by the crime agencies—be placed in a fixed deposit and be capable of liquidation only upon an order of the competent Judicial Magistrate within three months.

Since the remaining balance was not shown to require continued restraint, the Court directed that it be released and the account be unfrozen.

ICICI Bank was directed to keep ₹2,88,000 in a fixed deposit, which could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months, subject to action by the police agency under the relevant provisions of the BNSS or other applicable law.

Failing such action, the fixed-deposit amount could also be withdrawn by the petitioner under intimation to the police agency.

The petitioner’s bank account was ordered to be unfrozen, and any remaining amount was directed to be released, as it was not required to remain frozen.

The judgment did not expressly grant a separate direction for restoration of the petitioner’s Retailer ID.