Entire bank accounts cannot remain frozen; disputed cyber-fraud amounts must be secured in fixed deposits.

The petitioner challenged the notice dated 8 July 2025 issued by IndusInd Bank freezing her bank account No. 100047483782, allegedly pursuant to instructions from the Delhi Cyber Police in connection with a cyber-crime investigation.

She sought quashing of the freeze notice, restoration of full operation of the account, and, alternatively, a direction that only the specific amount allegedly connected with the investigation be retained or frozen.

The petitioner relied on Malcolm Murayis & Others v. State Bank of India & Others , W.P. No. 1100 of 2024, decided on 26 April 2024, in which this Court had directed that disputed amounts be placed in fixed deposits while permitting operation of the remaining account balance.

The State and other respondents were represented before the Court.

Whether the petitioner’s entire bank account could continue to remain frozen pursuant to a cyber-police request, or whether only the disputed amount connected with the alleged cyber offence should be secured?

Whether the principles laid down in Malcolm Murayis regarding retention of the disputed amount in a fixed deposit and restoration of operation of the bank account applied to the present case?

Whether the investigating agency was required to proceed in accordance with Section 102 of the CrPC or the corresponding provisions of the BNSS and obtain appropriate orders from the competent Judicial Magistrate?

The Court applied the principle that where a bank account is frozen at the request of a cyber-crime investigating agency, the entire account should not ordinarily remain inoperative when only a specific amount is alleged to be connected with the offence.

In Malcolm Murayis , the Court relied upon Section 102 of the CrPC, which governs the seizure of property suspected to be connected with an offence and requires appropriate reporting to the jurisdictional Magistrate.

The Court further relied on its precedent directing the bank to place the disputed amount in a fixed deposit, subject to liquidation only upon orders of the competent Judicial Magistrate within a specified period, while permitting the petitioner to operate the remainder of the account.

In the present case, the Court referred to the corresponding provisions of the BNSS or any other applicable law governing the investigating agency’s action.

The Court found that the petitioner’s case was materially covered by Malcolm Murayis and held that its directions applied mutatis mutandis .

Following that precedent, the Court balanced the investigative need to preserve the amount allegedly linked to the cyber offence against the petitioner’s right to operate her bank account.

It therefore directed that the disputed amount communicated by the police agency be kept in a fixed deposit rather than allowing the entire account to remain frozen.

The fixed deposit could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months, during which period the police agency was expected to take action in accordance with the BNSS or other applicable law.

If the agency failed to obtain the requisite judicial orders within that period, the petitioner could seek withdrawal of the fixed-deposit amount after informing the police agency.

The Court directed the respondent bank to unfreeze the petitioner’s bank account and permit its operation, while retaining only the disputed amount identified by the investigating agency in a fixed deposit.

The fixed deposit was to be liquidated only on the orders of the competent Judicial Magistrate within three months.

In the event of failure by the police agency to proceed in accordance with law within that period, the petitioner could withdraw the fixed-deposit amount after giving intimation to the police agency.