Frozen Bank Accounts Must be Unfrozen Subject to Term Deposits of Disputed Amounts Pending Investigation.

The petitioner, Alifiya, filed a writ petition under Article 226 of the Constitution of India challenging a notice/letter (No. 449A/2023) dated 02.09.2023 issued by the State (Respondent No. 1) to HDFC Bank (Respondent No. 2), which resulted in the freezing of her bank account.

The petitioner sought a writ of mandamus to de-freeze Account No. 50100390385591 and permit normal banking operations.

The petitioner contended that her case is squarely governed by the precedent in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), where accounts were frozen by cyber cells without proper notice or compliance with statutory seizure procedures.

1. Whether the respondent bank can be directed to unfreeze a bank account blocked on the instructions of cyber crime agencies while ensuring the security of the allegedly proceeds of crime.

2. Whether the investigating agencies must comply with the procedural requirements of Section 102 of the Cr.P.C. (now relevant provisions of BNSS) regarding the seizure of bank accounts.

The Court primarily relied on the principles established in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), which addressed the "responsible approach" required by cyber crime cells when freezing accounts.

Section 102 of the Code of Criminal Procedure (Cr.P.C.), which mandates that investigating agencies inform the concerned Magistrate regarding seizures.

The Court also referenced the transition to the Bharatiya Nagarik Suraksha Sanhita (BNSS) as the governing procedural law for modern investigations.

The Court observed that the petitioner’s situation was identical to the Malcolm Murayis case, where accounts were frozen solely on the intimation of cyber cells without the account holders being served notice or being directly implicated in an offence.

It noted a pattern of "poor functioning and irresponsible approach" by cyber crime cells that freeze accounts but fail to respond to court proceedings or follow statutory mandates.

To balance the interests of justice and the investigation, the Court reasoned that the specific disputed amount (Rs. 8,37,462/-) should be secured in a fixed deposit while allowing the remainder of the account to be utilized, shifting the burden onto the police to seek a formal order from a Magistrate within a specified timeframe.

The Court ordered the bank to keep the disputed amount of Rs. 8,37,462/- 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 law (BNSS or other relevant statutes) within that period, the petitioner is permitted to withdraw the FD amount.