Frozen bank accounts must be unfrozen by converting disputed amounts into fixed deposits pending investigation.

The petitioner, Sachin Soni, filed a writ petition under Article 226 of the Constitution of India seeking a direction to Indusland Bank to remove a lien or freeze placed upon his bank account

The petitioner contended that his case was identical to the matter of Malcolm Murayis & Ors. Vs. 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 adherence to statutory seizure procedures

1. Whether the freeze on the petitioner's bank account should be lifted in accordance with the precedent set in the Malcolm Murayis case

2. What conditions should be imposed on the disputed funds to balance the interests of the investigating agencies and the account holder

Article 226 of the Constitution regarding the High Court's discretionary power to issue directions for the enforcement of rights

The precedent established in Malcolm Murayis & Ors. Vs. State Bank of India and Others, which mandates that bank accounts frozen due to cyber crime intimations should be managed by securing the disputed amount in fixed deposits rather than a total freeze

Section 102 of the Cr.P.C. (and the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita/BNSS) regarding the legal obligations of police officers to report seizures to a Magistrate

The Court found that the petitioner’s circumstances were squarely covered by the decision in Malcolm Murayis, applying the principle mutatis mutandis to the present case

the court noted the "irresponsible approach" of cyber crime cells that freeze accounts via email but fail to respond to court proceedings or comply with the procedural mandates of Section 102 Cr.P.C.

To rectify this while preserving the integrity of potential investigations, the Court reasoned that the specific disputed amount must be isolated into a fixed deposit

This ensures the account remains operational for the petitioner while the disputed funds remain secured for a limited period of three months, pending a formal order from a competent Judicial Magistrate

The bank was ordered to keep the disputed amount in a fixed deposit (FD), which can only be liquidated upon orders from a competent Judicial Magistrate within three months

If the police agency fails to proceed in accordance with the BNSS or relevant law within that period, the petitioner is entitled to withdraw the FD amount under intimation to the agency