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

The petitioner maintained Bank Account No. 50100075402716 with HDFC Bank, Khategaon, District Dewas.

The account was placed on hold/frozen pursuant to information or directions received from cyber-crime authorities concerning an allegedly disputed amount.

The petitioner filed a petition under Article 226 of the Constitution seeking removal of the freeze, costs, and other appropriate reliefs.

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

In the present case, the amount identified by the crime agencies as disputed was Rs. 972.

1. Whether the petitioner’s bank account, frozen pursuant to cyber-crime-related directions, should continue to remain completely frozen under Article 226 of the Constitution.

2. Whether the disputed amount of Rs. 972 should be segregated and retained in a fixed deposit pending orders of the competent Judicial Magistrate, while permitting the petitioner to operate the remaining balance.

3. Whether the investigating agency was required to proceed in accordance with Section 102 of the CrPC or the corresponding provisions of the BNSS within a specified period.

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate directions to prevent arbitrary or disproportionate interference with the operation of a bank account.

It relied on the precedent in Malcolm Murayis & Ors. v. State Bank of India & Ors., which held that, where an account is frozen on the basis of cyber-crime allegations, the disputed amount may be retained in a fixed deposit subject to orders of the competent Judicial Magistrate, while the undisputed balance should not remain frozen.

The Court further required the police authorities to proceed in accordance with Section 102 of the CrPC, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), concerning seizure or attachment of property connected with an alleged offence.

The Court found the petitioner’s case materially identical to the circumstances addressed in Malcolm Murayis and therefore applied that decision mutatis mutandis.

Since only Rs. 972 had been identified by the crime agencies as the disputed amount, a complete freeze of the petitioner’s account was held to be unnecessary.

The Court balanced the interests of the investigation and the petitioner by directing that the disputed sum be placed in a fixed deposit, subject to liquidation only upon an order of the competent Judicial Magistrate within three months.

At the same time, the petitioner was permitted to operate the account in respect of the remaining funds, thereby preserving the allegedly tainted amount without unduly restricting access to undisputed money.

HDFC Bank was directed to keep Rs. 972, being the disputed amount, in a fixed deposit, which could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months.

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

The petitioner’s bank account was ordered to be unfrozen, and any remaining amount in the account was directed not to be kept under freeze.