Frozen bank accounts must be unfrozen while placing disputed amounts in fixed deposits pending magistrate orders.

The petitioner, Ajay Thakur, filed a writ petition under Article 226 of the Constitution of India seeking an order to unfreeze his bank account held with State Bank of India.

The account had been frozen following intimations from cyber crime agencies regarding alleged involvement in cyber fraud.

The petitioner contended that the freezing was done without prior notice or compliance with statutory procedures by the investigating agencies.

The petitioner sought relief on the grounds that his case was identical to the precedent set in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024).

1. Whether the bank account of the petitioner should be unfrozen subject to certain conditions regarding the disputed amounts allegedly linked to cyber crime.

2. Whether the investigating agencies are required to proceed under the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS) or Cr.P.C. within a specified timeframe to justify the continued freezing of funds.

The court primarily applied the principle of parity and the precedent established in Malcolm Murayis & Ors. Vs. State Bank of India and Others.

Section 102 of the Code of Criminal Procedure (Cr.P.C.), now corresponding to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which governs the power of police officers to seize property and requires reporting such seizures to a Magistrate.

The court observed that in similar crypto-trading and cyber-fraud cases, bank accounts were often frozen indefinitely without proactive follow-up from investigating agencies.

By applying the Malcolm Murayis precedent mutatis mutandis to the present facts, the court reasoned that the interests of justice are balanced by securing the specific disputed amounts—Rs. 15,800 and Rs. 60,000—while allowing the petitioner access to the remainder of his account.

The court noted that because the police agencies often fail to respond to bank inquiries or judicial notices, a time-bound stay on the disputed funds is necessary to prevent indefinite hardship to the account holder.

The bank was ordered to place the disputed amounts (Rs. 15,800 and Rs. 60,000) into fixed deposits (FDs), which are to remain frozen and can only be liquidated upon orders from a competent Judicial Magistrate within three months; if no action is taken by agencies within this period, the petitioner is permitted to withdraw the FD amounts under intimation to the police.