MP HC Unfreezes Account, Lets Holder Operate It While ₹31,300.65 From 3 Disputed Entries Remains In FD

In brief

The question

1. Whether the petitioner’s bank account should remain frozen in full when the identified disputed amount was Rs. 31,300.65

The court held

The Court directed the bank to keep Rs. 31,300.65 in a fixed deposit and to unfreeze the petitioner’s account, permitting him to operate it.

It also directed

The fixed-deposit amount may be liquidated only upon orders of the competent Judicial Magistrate within three months; failing such orders, the petitioner may withdraw it after informing the police agency.

The petition was disposed of accordingly

01Facts

The petitioner sought restoration of his Axis Bank savings account and its associated banking facilities, which had been put on hold.

p. 1 · ¶ 2–4

The petition identified three disputed transactions totalling Rs. 31,300.65.

p. 1 · ¶ 2–4

Relying on Malcolm Murayis & Ors. v. State Bank of India & Others and Archana v. State of Madhya Pradesh & Others, the petitioner sought relief under Article 226 of the Constitution

p. 1 · ¶ 2–4

02Issues

i.1. Whether the petitioner’s bank account should remain frozen in full when the identified disputed amount was Rs. 31,300.65

¶ 6

ii.2. Whether the disputed amount should instead be secured separately while permitting the petitioner to operate the account, subject to action by the police in accordance with law

¶ 6

03Law Applied

Article 226 of the Constitution empowers the High Court to grant appropriate relief where a bank-account freeze causes unjustified restraint.

The Court applied Malcolm Murayis, which directed that disputed funds be kept in fixed deposits and made subject to orders of the competent Magistrate within three months, failing which they could be released to the account holders under intimation to the investigating agency

p. 1 · ¶ 3

It also applied Archana, which endorsed the principle that restrictions on bank accounts in cybercrime investigations should be proportionate and, where feasible, limited to the suspected amount, while requiring investigation and grievance processes to proceed in accordance with the applicable SOP and law

pp. 3–7 · ¶ 4–5

The present order referred to the relevant provisions of the BNSS or other law relied upon by the police

¶ 6

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 102

04Reasoning

The Court found the petitioner’s case covered by Malcolm Murayis and Archana and applied their approach to the identified disputed sum of Rs. 31,300.65.

¶ 5–6

It directed that this amount be retained in a fixed deposit, rather than continuing to restrain operation of the entire account.

¶ 5–6

The police were expected to proceed in accordance with the relevant law within three months; any additional complaint concerning another transaction could be addressed by the bank in accordance with law and the SOP

¶ 5–6