Only the disputed amount shall remain in fixed deposit; remaining account funds must be unfrozen.

The petitioner’s Savings Bank Account No. 996618210002679 maintained with Bank of India, Jeetpur Kala Branch, Rajgarh, Madhya Pradesh, was subjected to a debit freeze/lien in respect of ₹9,031 on the instructions of crime/cyber-crime authorities.

The petitioner invoked Article 226 of the Constitution seeking removal of the freeze, release of the amount, and permission to operate the account without restriction.

The Court found that the matter was squarely covered by its earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

1. Whether the debit freeze/lien imposed on the petitioner’s bank account in respect of ₹9,031 should be removed and the account be permitted to operate without restriction.

2. Whether the disputed amount should be retained separately in a fixed deposit pending action by the competent Judicial Magistrate under the applicable law.

3. Whether the remaining balance, if any, in the petitioner’s bank account could continue to remain frozen.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate an investigative debit freeze affecting the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Others, under which the disputed amount identified by cyber-crime agencies is to be kept in a fixed deposit and may be liquidated only pursuant to orders of the competent Judicial Magistrate within the prescribed period.

The earlier decision proceeded on the expectation that investigating agencies would comply with Section 102 of the Code of Criminal Procedure, or the corresponding applicable law, by placing the seizure/freezing action before the competent Magistrate.

In the present case, the Court referred to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), or any other law relied upon by the police agency.

The Court held that the petitioner’s case was materially identical to Malcolm Murayis, which had addressed bank-account freezes initiated on the basis of cyber-crime complaints and communications from investigating agencies.

Applying that precedent mutatis mutandis, the Court balanced the investigative interest in preserving the allegedly tainted amount against the petitioner’s right to operate the account.

It therefore directed that ₹9,031 be placed in a fixed deposit, subject to liquidation only upon an order of the competent Judicial Magistrate within three months.

If the police agency failed to proceed in accordance with the applicable law within that period, the amount could be withdrawn by the petitioner after intimation to the agency.

Since only the disputed amount required preservation, the continued freezing of the bank account and any remaining balance was held unjustified.

The respondent bank was directed to unfreeze the petitioner’s bank account and permit its operation, while keeping ₹9,031 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months; failing lawful action by the police agency within that period, the petitioner could withdraw the amount after informing the agency.

Any other amount lying in the account was not required to remain frozen and was directed to be released from the freeze.