Frozen bank accounts must be unfrozen, securing disputed amounts in fixed deposits pending time-bound judicial orders.

The Petitioner, Amit, filed a writ petition under Article 226 of the Constitution of India seeking to quash the freezing of his savings account (No. 50160007075470) at Bandhan Bank.

The account, along with internet banking, UPI, and mobile banking services, had been restricted following instructions from investigative agencies regarding alleged cyber crimes.

The Petitioner contended that his case was identical to the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), where accounts were frozen without prior notice or strict adherence to statutory procedures.

1. Whether the directions and relief granted in the case of Malcolm Murayis v. State Bank of India regarding the unfreezing of bank accounts are applicable to the Petitioner’s circumstances.

2. Whether the freezing of the bank account without a timeline for investigation or a specific order from a Judicial Magistrate is sustainable under the law.

The Court primarily applied the principles governing the seizure of property under Section 102 of the Code of Criminal Procedure (Cr.P.C.), now interpreted in the context of the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS).

It relied on the precedent Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024), which establishes that while investigative agencies can request the freezing of accounts linked to cyber fraud, they must proceed in accordance with the law and inform the concerned Magistrate; otherwise, the account holder is entitled to operate the account while the disputed amount remains secured.

The Court observed that the Petitioner’s grievance was squarely covered by the Malcolm Murayis decision, where the court had criticized the "irresponsible approach" of cyber crime cells for freezing accounts without responding to inquiries or following Section 102 Cr.P.C.

The Court determined that the same reasoning applied mutatis mutandis to the present case.

It reasoned that a balance must be struck between the needs of the criminal investigation and the Petitioner's right to access his funds.

Therefore, instead of a total freeze, the Court found it appropriate to secure only the "disputed amount" in a fixed deposit for a limited timeframe, allowing the investigative agency to obtain a legal order from a Magistrate, failing which the Petitioner’s rights over the entire balance would be restored.

The Bank was ordered to keep the specific disputed amount—as identified by the crime agencies—in a fixed deposit (FD).

The FD is to be liquidated only upon an order from a competent Judicial Magistrate within three months.

If the police agency fails to obtain such an order under the BNSS or other applicable laws within three months, the Petitioner is permitted to withdraw the FD amount under intimation to the agency.

All other banking facilities, such as UPI and internet banking, are to be restored.