Frozen bank accounts must be unfrozen while disputed sums remain in fixed deposits pending magistrate orders within three months.

The petitioner filed a petition under Article 226 of the Constitution challenging the freezing of his SBI savings account and seeking restoration of its operation and disclosure of the material relied on to freeze it.

The Court was informed that cyber-crime agencies had identified ₹2,379 in the account as disputed.

The petitioner relied on Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024, in which the Court had directed that disputed funds be placed in fixed deposits pending action by the competent Magistrate.

Whether the approach adopted in Malcolm Murayis should apply to the petitioner’s frozen bank account and disputed funds.

Whether the petitioner’s account should be unfrozen while the disputed amount is retained subject to proceedings before the competent Judicial Magistrate.

Article 226 of the Constitution empowers the High Court to grant appropriate relief in writ jurisdiction.

The Court applied Malcolm Murayis, which directed banks to place amounts identified by cyber-crime agencies as disputed in fixed deposits, pending orders of the competent Judicial Magistrate within the prescribed period; if the agency failed to proceed in accordance with law, the amount could be withdrawn by the account holder after notifying the agency.

In the present case, the Court referred to the relevant provisions of the BNSS or any other law relied upon by the police agency, without identifying a specific statutory provision.

The Court considered the petitioner’s case covered by Malcolm Murayis and held that its directions applied mutatis mutandis.

Following that approach, it separated the treatment of the disputed amount from the status of the account: ₹2,379 was to be secured in a fixed deposit pending an order by the competent Judicial Magistrate, while the account itself was to be unfrozen.

The bank was directed to place ₹2,379 in a fixed deposit, to be liquidated only after orders of the competent Judicial Magistrate within three months; if the police agency failed to proceed in accordance with law within that period, the petitioner could withdraw the amount after informing the agency.

The petitioner’s bank account was also directed to be unfrozen.