Frozen accounts must be unfrozen, securing only disputed amounts in fixed deposits pending judicial orders.

The Petitioner approached the High Court under Article 226 of the Constitution seeking a writ to compel Punjab National Bank to defreeze/remove a lien on his bank account (No. 2892000109094169).

The Petitioner argued that his case was identical to Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024), wherein accounts were frozen by cyber cells on allegations of cyber fraud—often involving cryptocurrency trading—without the account holders receiving prior notice or the agencies complying with statutory seizure procedures.

In the precedent cited, the court had noted the lack of communication from investigative agencies and the failure to report seizures to the Magistrate.

1. Whether the Petitioner is entitled to the defreezing of his bank account based on the principles established in Malcolm Murayis & Ors. v. State Bank of India and Others.

2. Whether the investigative agencies are required to follow specific procedural timelines under the BNSS or Cr.P.C. to maintain a freeze on a bank account.

The Court exercised its extraordinary jurisdiction under Article 226 of the Constitution of India.

It applied the procedural requirements for seizure of property as contemplated under Section 102 of the Code of Criminal Procedure (Cr.P.C.), now governed by the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS).

The Court followed the precedent of Malcolm Murayis & Ors. v. State Bank of India and Others, which establishes that while disputed amounts tied to criminal investigations may be secured, the entirety of an account should not remain frozen indefinitely without active legal proceedings.

The Court found that the facts of the present case were covered mutatis mutandis by the Malcolm Murayis decision.

It reasoned that investigative agencies often exhibit an "irresponsible approach" by instructing banks to freeze accounts via email without subsequent follow-up or compliance with the law.

To balance the interests of the investigation with the Petitioner's right to his property, the Court determined that the disputed amount should be isolated in a fixed deposit rather than freezing the entire account.

The Court emphasized that it is the responsibility of the police agency to proceed according to the law under the BNSS within a specific timeframe (three months) to justify the continued retention of the funds.

The Bank was ordered to keep the specific disputed amount, as identified by the investigative agencies, in a fixed deposit (FD), which is only to be liquidated upon orders from a competent Judicial Magistrate within three months.

Should the investigative agency fail to proceed under the BNSS or other relevant law within this three-month period, the Petitioner is permitted to withdraw the FD amount under intimation to the agency.