Frozen bank accounts must be released by securing only the disputed amount in fixed deposits.

The petitioner, Jyoti Kushwah, filed a writ petition under Article 226 of the Constitution of India challenging the action of respondent bank no. 3 in creating a lien of ₹5,803 on her current bank account (No. 20242725013) at the LIG Branch.

The petitioner sought directions for the removal of the lien, contending that the action was illegal.

The petitioner relied on the precedent set by the High Court of Madhya Pradesh in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where bank accounts were frozen by cyber cells alleging cyber fraud without following statutory procedures.

1. Whether the action of the respondent bank in creating a lien/freeze on the petitioner’s account based on instructions from investigative agencies was legally sustainable.

2. Whether the petitioner is entitled to relief in line with the directions issued in the case of Malcolm Murayis (supra).

The court primarily applied the legal principles established in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024).

This precedent addresses the requirements of Section 102 of the Code of Criminal Procedure (Cr.P.C.)—and by extension, the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which mandate that investigating agencies must inform the concerned Magistrate regarding the seizure of property (including bank accounts) and proceed in accordance with the law.

The Court observed that the petitioner’s case was squarely covered by the decision in Malcolm Murayis (supra) and should be applied mutatis mutandis.

In the cited precedent, the Court noted that cyber crime cells often instruct banks to freeze accounts without providing notice to the account holder or responding to subsequent inquiries, reflecting an irresponsible approach.

To balance the interests of the investigation and the petitioner's right to operate their account, the Court reasoned that disputed amounts should be secured in fixed deposits (FDs) rather than freezing the entire account, ensuring that the police agency complies with procedural laws under the BNSS or Cr.P.C. within a reasonable timeframe.

However, the bank was directed to keep the disputed amount (₹5,803) in a fixed deposit, which can only be liquidated upon orders from a competent Judicial Magistrate.

If the police agency fails to proceed in accordance with the law within three months, the petitioner is permitted to withdraw the amount under intimation to the agency.