MP HC Unfreezes Man’s Bank Account, Says Disputed Funds May Be Withdrawn If No Magistrate Order Comes Within 3 Months

The petitioner sought, under Article 226 of the Constitution, an order requiring the Bank of Maharashtra to defreeze his account and release undisputed funds, contending that the debit freeze was imposed without authority or statutory requisition.

He submitted that his case was covered by Malcolm Murayis & Ors. v. State Bank of India and Others, W.P. Nos. 1100 and 1185 of 2024, decided on 26 April 2024.

The High Court considered that precedent, which provided for disputed funds to be placed in fixed deposits pending action by the competent Magistrate.

1. Whether the approach adopted in Malcolm Murayis should apply to the petitioner’s bank-account freeze.

2. Whether the account should be unfrozen while the amount identified by the crime agencies is kept in fixed deposit pending action by the competent Judicial Magistrate.

The High Court exercised its jurisdiction under Article 226 and applied its decision in Malcolm Murayis mutatis mutandis.

In that precedent, the Court directed that amounts identified by cybercrime agencies as disputed be placed in fixed deposits and remain unavailable for liquidation until orders were passed by the competent Judicial Magistrate within three months; if the agency failed to proceed in accordance with law, the amount could be withdrawn by the account holder after giving intimation to the agency.

In the present case, the Court referred to the police agency’s obligation to proceed under the relevant provisions of the BNSS or other applicable law.

The Court found the earlier Malcolm Murayis decision applicable to the petitioner’s case.

It therefore balanced protection of the amount reported as disputed by the crime agencies against the petitioner’s access to the remainder of his account: the disputed amount was to be secured in fixed deposits, while the account itself was to be unfrozen.

The fixed-deposit restriction was made contingent on the competent Judicial Magistrate passing orders within three months; absent timely lawful action, the petitioner could withdraw the amount after notifying the police agency.

The deposits could be liquidated only after orders of the competent Judicial Magistrate within three months; failing that, the petitioner could withdraw the amount after informing the police agency.