Only the disputed cyber-fraud amount may remain frozen; remaining account funds must be defreezed.

The petitioner maintained Account No. 2181100100001610 with Punjab National Bank, Venkatesh Nagar Branch, Indore.

The account was frozen pursuant to information or directions received from cyber-crime authorities alleging that certain funds in the account were connected with cyber crime.

The petitioner approached the High Court under Article 226 of the Constitution seeking defreezing of the account and consequential reliefs.

The Court noted that the petitioner’s case was substantially covered by its earlier decision in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

In the present case, the amount reported as disputed was Rs. 2,013.29.

Whether the petitioner’s bank account, frozen on the basis of information received from cyber-crime authorities, should be defrozen subject to safeguarding the disputed amount?

Whether the disputed amount of Rs. 2,013.29 should be retained in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable law?

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs or directions to protect legal rights and ensure lawful exercise of public power.

It relied on the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, that where a bank account is frozen on the request of cyber-crime authorities, the disputed amount may be secured in a fixed deposit, while the remaining balance is ordinarily permitted to be operated by the account holder; liquidation of the fixed deposit is subject to orders of the competent Judicial Magistrate within the prescribed period.

The earlier decision referred to compliance with Section 102 of the Code of Criminal Procedure, 1973, or other applicable law concerning seizure or freezing of property during investigation.

In the present matter, the Court directed the police agency to proceed under the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita or any other applicable law.

The Court found the present case to be covered mutatis mutandis by Malcolm Murayis.

Applying that principle, it balanced the investigative interest in preserving allegedly tainted funds against the petitioner’s right to operate the bank account.

Accordingly, only the specifically disputed sum of Rs. 2,013.29 was required to be placed in a fixed deposit, to remain subject to orders of the competent Judicial Magistrate within three months.

Since the entire account need not remain frozen merely because a limited amount was allegedly connected with cyber crime, the Court directed that the account be unfrozen and that the remaining funds be made available to the petitioner.

Punjab National Bank was directed to keep Rs. 2,013.29, being the disputed amount, in a fixed deposit.

The fixed deposit could be liquidated only pursuant to orders 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 also be permitted to be withdrawn by the petitioner under intimation to the police agency.

The petitioner’s bank account was ordered to be unfrozen, and any other amount lying in the account was declared not liable to remain frozen.