Only the disputed cyber-fraud amount may remain frozen; the bank must unfreeze the remainder.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking defreezing of bank account No. 50100750367254 maintained with HDFC Bank and consequential reliefs.

The account had been frozen pursuant to communications from cyber-crime authorities alleging that a sum of ₹8,000 in the account was connected with cyber fraud.

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

In Malcolm Murayis, the Court had directed that the disputed amount be placed in fixed deposits pending appropriate orders by the competent Judicial Magistrate, while permitting operation of the remaining account balance.

Whether the petitioner’s bank account, frozen on the basis of cyber-crime agency communications, should be defrozen subject to safeguarding the disputed amount of ₹8,000.

Whether the disputed amount should be retained in a fixed deposit pending orders by the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court exercised its jurisdiction under Article 226 of the Constitution of India to issue appropriate directions concerning the freezing of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India and Others, W.P. No. 1100 of 2024, that where an account is frozen on the basis of cyber-crime allegations, the disputed amount may be secured in a fixed deposit and the remaining balance should not ordinarily remain frozen.

The earlier decision required the investigating agency to proceed in accordance with Section 102 of the CrPC or the corresponding applicable provisions of the BNSS, and to obtain orders from the competent Judicial Magistrate within three months; failing such action, the disputed amount could be released to the account-holder subject to intimation to the investigating agency.

The Court considered the petitioner’s case to be materially identical to Malcolm Murayis and therefore applied that decision mutatis mutandis.

Balancing the investigative interest in preserving the allegedly tainted sum against the petitioner’s right to operate his bank account, the Court directed that only ₹8,000 be segregated and placed in a fixed deposit.

The remaining amount, if any, was not required to remain frozen.

The fixed deposit could be liquidated only upon orders of the competent Judicial Magistrate within three months, thereby ensuring compliance with the applicable criminal-procedure safeguards.

HDFC Bank and the concerned respondents were directed to unfreeze the petitioner’s bank account, while keeping ₹8,000 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 obtain such orders within that period, the amount could also be released to the petitioner under intimation to the agency.

Any remaining amount in the account was directed to be defrozen.