Cybercrime-linked bank accounts must be unfrozen while disputed amounts remain in fixed deposits pending Magistrate orders.

The petitioner challenged the restriction placed on his State Bank of India account maintained at the City Center Branch, Gwalior, bearing Account No. 43862831672.

He sought disclosure of the documents and reasons underlying the hold, freeze, or lien, together with directions for a uniform Standard Operating Procedure requiring banks to provide affected account holders with meaningful information regarding such restrictions and the concerned investigating authority.

Relying on Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, the petitioner contended that the account should be unfrozen subject to preservation of any disputed amount.

The Court reproduced the Malcolm Murayis directions, under which the disputed amount was to be placed in fixed deposits pending orders of the competent Judicial Magistrate and compliance by the investigating agency with the applicable law concerning seizure of bank accounts.

Whether the petitioner was entitled to relief against the freeze or hold placed on his bank account in terms of the principles laid down in Malcolm Murayis.

Whether the disputed amount could be segregated and retained in a fixed deposit, while permitting operation of the remaining account, subject to orders of the competent Judicial Magistrate under the applicable provisions of the BNSS or other law.

Whether the Court should issue directions for formulation and implementation of a uniform SOP governing bank-account freezes, holds, and liens.

The Court applied the principle that where a bank account is restricted at the instance of a cyber-crime or investigating agency, the disputed amount may be preserved separately in a fixed deposit, while the account may otherwise be made operational, subject to orders of the competent Judicial Magistrate.

The Court relied on Malcolm Murayis & Ors. v. State Bank of India & Ors., which expected the investigating agency to proceed in accordance with Section 102 of the CrPC or the corresponding applicable provisions of the BNSS and to place the seizure or restriction before the competent Magistrate within the prescribed period.

Under Malcolm Murayis, if the investigating agency failed to obtain appropriate judicial orders within three months, the amount retained in fixed deposit could be released to the petitioner under intimation to the concerned cyber-crime or police agency.

The Court found that the petitioner’s case was squarely covered by Malcolm Murayis and held that the earlier decision would apply mutatis mutandis.

Consequently, instead of permitting an indefinite freeze, the Court directed that only the amount identified by the crime agencies as disputed be retained in a fixed deposit.

Such amount would remain subject to orders of the competent Judicial Magistrate, thereby preserving the interests of the investigation while preventing unnecessary deprivation of access to the petitioner’s account.

The Court further required the police agency to act under the relevant provisions of the BNSS or other applicable law within three months; failing such action, the fixed-deposit amount could also be withdrawn by the petitioner after informing the police agency.

Although the petitioner had sought broader SOP-related directions, the Court disposed of the petition on the basis of the specific relief and precedent-based account-restoration directions, without separately formulating an SOP.

The State Bank of India was directed to unfreeze the petitioner’s City Center Branch, Gwalior account, Account No. 43862831672.

Any amount identified by the crime agencies as disputed was to be kept in a fixed deposit and could be liquidated only pursuant to orders of the competent Judicial Magistrate.

The investigating agency was expected to proceed in accordance with the applicable provisions of the BNSS or other relevant law within three months; failing that, the fixed-deposit amount could be withdrawn by the petitioner under intimation to the police agency.