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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking unfreezing and activation of its ICICI Bank current account, production of the cyber-complaint or order forming the basis of the freeze, and permission to operate the account while retaining the disputed amount in a fixed deposit.

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

In that precedent, the Court had directed that the disputed amount identified by cyber-crime agencies be retained in fixed deposits while permitting operation of the remaining account, subject to action by the competent Judicial Magistrate.

Whether the petitioner’s bank account, frozen on the basis of communications from cyber-crime authorities, should be directed to be unfrozen so that the petitioner may operate the undisputed balance.

Whether the amount allegedly connected with cyber-crime should be retained in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable law.

Whether, in the absence of appropriate proceedings or orders by the competent Judicial Magistrate within the stipulated period, the disputed amount may be released to the petitioner subject to intimation to the police agency.

The Court exercised its jurisdiction under Article 226 of the Constitution to issue appropriate directions concerning the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, that where a bank account is frozen pursuant to cyber-crime agency communications, the disputed amount may be secured in a fixed deposit, while the remaining account may be unfrozen and operated by the account-holder.

The disputed amount is to be liquidated only pursuant to an order of the competent Judicial Magistrate within three months, with the investigating agency expected to proceed in accordance with Section 102 of the CrPC, the relevant provisions of the BNSS, or any other applicable law.

The Court found that the petitioner’s case was materially identical to the circumstances considered in Malcolm Murayis and therefore applied that decision mutatis mutandis.

Balancing the need to preserve funds allegedly linked to cyber-crime with the petitioner’s right to operate its business account, the Court directed that only the disputed amount identified by the cyber-crime agencies be placed in fixed deposits. The balance of the account was to be unfrozen.

The investigating authorities were given three months to obtain appropriate orders from the competent Judicial Magistrate under the applicable legal provisions; failing such action, the amount retained in fixed deposit could be withdrawn by the petitioner after informing the police agency.

The respondent bank was directed to unfreeze the petitioner’s bank account.

The amount reported by the cyber-crime agencies as disputed was to be kept in a fixed deposit and could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

If no such order was obtained within that period, the petitioner could withdraw the fixed-deposit amount upon intimation to the concerned police agency.