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

The petitioner, Sapnaa, approached the High Court under Article 226 of the Constitution of India seeking a direction to the respondents to remove an "illegal and arbitrary" hold/freeze placed on her bank account at the Bank of India, Rangwasa Branch.

The petitioner contended that her case is identical to Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024), involving accounts frozen by cyber cell authorities without prior notice or strict adherence to statutory seizure procedures.

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

This precedent mandates compliance with Section 102 of the Code of Criminal Procedure (Cr.P.C.)—now corresponding to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS)—which requires investigating agencies to inform the jurisdictional Magistrate of seizures.

The rule dictates that while disputed funds may be secured during an investigation, the account holder cannot be deprived of the use of the entire account indefinitely without due process.

The Court found that the petitioner’s circumstances were squarely covered by the Malcolm Murayis decision and applied its findings mutatis mutandis.

In the cited precedent, the Court critiqued the "irresponsible approach" of cyber crime cells that freeze accounts via email but fail to respond to judicial proceedings or follow the procedural mandates of the law.

Reasoning that the same logic applied here, the Court determined that the petitioner’s right to operate her account must be restored, provided the specific "disputed amount" identified by the police is protected in a fixed deposit to ensure it remains available should the investigation yield a criminal charge.

The bank was ordered to keep only the specific "disputed amount" in a fixed deposit (FD).

This FD is to be liquidated only upon orders from a competent Judicial Magistrate within a three-month period.

If the investigating agency fails to take appropriate legal action under the BNSS within said three months, the petitioner is permitted to withdraw the FD amount under intimation to the agency.