Frozen bank accounts must be released, retaining only disputed amounts in fixed deposits pending judicial orders.

The petitioner, Arjun Yadav, approached the High Court under Article 226 of the Constitution of India to challenge the freezing of his bank account (Account No. 02 84101 80573) maintained with the India Post Payments Bank, Indore Branch

The petitioner contended that the hold placed on his account was illegal and arbitrary

He further argued that his case was identical to the matter of Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), wherein accounts were frozen by cyber cells of various police stations on allegations of cyber fraud without prior notice to the account holders or compliance with procedural mandates

1. Whether the freezing of the petitioner’s bank account by the respondent bank at the behest of investigating agencies was sustainable under the law

2. Whether the petitioner was entitled to have the account unfrozen subject to the conditions and procedural safeguards established in the precedent of Malcolm Murayis

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

This precedent interprets the duties of investigating agencies under 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 require agencies to report seizures or freezing of property to the concerned Magistrate

The rule dictates that while disputed amounts linked to crime may be secured, the entirety of an account should not be indefinitely frozen without due process

The Court determined that the petitioner’s circumstances were squarely covered by the decision in Malcolm Murayis, making that ruling applicable mutatis mutandis to the present case

In the cited precedent, the Court had observed that cyber crime cells often freeze accounts via email without subsequent legal follow-up or responding to court inquiries, which constitutes an irresponsible approach to statutory duties

The Court reasoned that to balance the interests of justice and the investigation, the respondent bank should only secure the specific "disputed amount" as informed by the crime agencies

This ensures that the petitioner can operate the remainder of the account while the authorities are given a strict window to prove the necessity of the freeze through a judicial order

The Court ordered that the disputed amount must be placed in a fixed deposit (FD), which shall only be liquidated upon orders from a competent Judicial Magistrate within a period of three months

The Police agency is expected to proceed under the relevant provisions of the BNSS or other applicable laws within this timeframe; if they fail to obtain a judicial order within three months, the petitioner is permitted to withdraw the FD amount under intimation to the agency