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

In brief

The question

Whether the hold/freeze on the petitioner’s Bandhan Bank account should be removed, subject to safeguarding any amount identified by the investigating or cyber-crime authorities as disputed.

The court held

The petition was disposed of.

It also directed

The respondents/Bank were directed to place the amount identified by the crime agencies as disputed in a fixed deposit, to be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

In default of such an order, the petitioner could withdraw the fixed-deposit amount after informing the police agency.

The petitioner’s Bandhan Bank Account No. 50180028063385 was directed to be unfrozen.

01Facts

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the hold on his Bandhan Bank account bearing Account No. 50180028063385.

¶ 1

The petitioner’s counsel submitted that the case was covered by the Court’s earlier decision in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

¶ 2

In Malcolm Murayis, the Court had dealt with bank-account freezes based on communications from cyber-crime police authorities and directed that the allegedly disputed amounts be kept in fixed deposits pending appropriate orders from the competent Judicial Magistrate.

¶ 3 · quoted precedent · ¶ 3–10

The Court held that the same approach applied to the present case.

¶ 4

02Issues

i.Whether the hold/freeze on the petitioner’s Bandhan Bank account should be removed, subject to safeguarding any amount identified by the investigating or cyber-crime authorities as disputed.

¶ 1, 4–5

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

¶ 5

03Law Applied

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs and directions to protect legal rights and ensure lawful exercise of public power.

¶ 1

It relied on the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, namely that where a bank account is frozen pursuant to police or cyber-crime communications, the disputed amount may be segregated and placed in a fixed deposit, while the investigating agency must obtain appropriate orders from the competent Judicial Magistrate within the prescribed period.

¶ 3 · quoted precedent · ¶ 9

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

¶ 5

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 102

04Reasoning

The Court found that the present matter was materially identical to Malcolm Murayis and therefore applied that decision mutatis mutandis.

¶ 4

Balancing the petitioner’s right to operate his bank account against the need to preserve funds allegedly connected with cyber-crime, the Court directed that only the disputed amount communicated by the crime agencies be retained in a fixed deposit.

¶ 5

Such amount could be liquidated only after an order by the competent Judicial Magistrate within three months, thereby requiring the investigating agency to take prompt action under the applicable law.

¶ 5

If no such order was obtained within that period, the amount held in the fixed deposit could be withdrawn by the petitioner after intimating the police agency.

¶ 5