Cybercrime-linked bank accounts must be unfrozen, while disputed sums remain secured in fixed deposits.

The petitioner invoked Article 226 of the Constitution seeking removal of the hold on Axis Bank Account No. 920010074565421 and consequential relief.

The petitioner relied on the Madhya Pradesh 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 authorities.

In Malcolm Murayis, the Court had directed that disputed amounts allegedly linked to cyber fraud be kept in fixed deposits, subject to orders of the competent Judicial Magistrate, while permitting operation of the remaining account.

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

Whether the petitioner’s bank account, placed on hold pursuant to information or directions from crime/cyber-crime authorities, should be unfrozen subject to preservation of the disputed amount.

Whether the disputed amount should be kept in a fixed deposit pending orders of the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate directions to protect legal rights and remedy arbitrary administrative action.

It relied principally on Malcolm Murayis & Ors. v. State Bank of India & Ors., which directed banks to segregate the amount identified by cyber-crime agencies as allegedly connected with fraud and retain it in fixed deposits, while allowing the account holder to operate the balance.

The Court further required the police or investigating agency to proceed in accordance with the applicable provisions of the BNSS, or any other governing law, including obtaining appropriate orders from the competent Judicial Magistrate within the prescribed period.

The underlying principle is that an account cannot remain indefinitely frozen merely on an uncompleted investigative request; the allegedly tainted amount may be preserved, but continued restraint must be supported by lawful judicial or statutory action.

Since the petitioner’s grievance was materially identical to that considered in Malcolm Murayis, the Court adopted the earlier safeguards mutatis mutandis.

It balanced the interests of the investigation and the petitioner by directing that only the amount identified by the crime agencies as disputed be placed in a fixed deposit, rather than permitting an indefinite freeze of the entire account.

The fixed deposit could be liquidated only upon orders of the competent Judicial Magistrate within three months.

If the police agency failed to take the matter before the Magistrate within that period, the petitioner would be entitled to withdraw the preserved amount, after informing the police agency.

On that basis, the Court ordered that the petitioner’s Axis Bank account be unfrozen.

The respondents/bank were directed to keep the disputed amount communicated by the crime agencies in a fixed deposit, to 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 petitioner could withdraw the fixed-deposit amount under intimation to the agency.

The petitioner’s Axis Bank Account No. 920010074565421 was directed to be unfrozen.