Frozen bank accounts must be unfrozen, retaining only the disputed amount in fixed deposits.

The petitioner, Piyush Bhatevara, filed a writ petition under Article 226 of the Constitution of India challenging a "debit-freeze" placed on his bank account (Account No. 100157385781) maintained with IndusInd Bank

The freeze was initiated following intimations from law enforcement agencies regarding alleged cyber fraud

The petitioner sought a direction to unfreeze the account or, alternatively, to permit its operation while retaining a disputed amount of ₹4,000 for investigation purposes

The petitioner relied on a precedent set by the same court in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where similar freezes were challenged

1. Whether the petitioner’s bank account should be unfrozen subject to the retention of the specific disputed amount involved in the investigation

2. Whether the investigating agencies are required to comply with statutory procedures under the Bharatiya Nagarik Suraksha Sanhita (BNSS) when freezing bank accounts

The Court applied the procedural requirements for the seizure of property by police as established under the Bharatiya Nagarik Suraksha Sanhita (BNSS) (formerly Section 102 of the Cr.P.C.)

It further relied on the judicial principle established in Malcolm Murayis & Ors. v. State Bank of India and Others (2024), which holds that bank accounts cannot be frozen indefinitely without the investigating agency informing the concerned Magistrate and proceeding in accordance with law

The court also applied the principle of mutatis mutandis to extend the relief granted in the cited precedent to the present case

The Court found that the petitioner’s situation was squarely covered by the decision in Malcolm Murayis (supra)

In that case, the Court observed that while banks act on instructions from cyber crime cells, those agencies often fail to respond to court notices or follow the mandatory procedural requirements of Section 102 Cr.P.C.

The Court reasoned that to balance the interests of the investigation with the petitioner's right to operate their account, the disputed amount should be isolated in a fixed deposit while the rest of the account is unfrozen

This ensures that the specific funds suspected of being linked to a crime remain secured for three months, giving the police a deadline to obtain a formal order from a Judicial Magistrate

The bank was ordered to keep the specific "disputed amount" (as identified by the crime agencies) in a fixed deposit

This deposit is only to be liquidated upon orders from a competent Judicial Magistrate within three months

If the police agency fails to proceed under the BNSS or other relevant laws within this three-month period, the petitioner is permitted to withdraw the fixed deposit amount under intimation to the agency