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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the hold/freeze on his bank account bearing Account No. 55550107484592 and the connected FDR/IFSC details.

The Court found that the petitioner’s case 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, concerning bank-account freezes initiated pursuant to communications from cyber-crime authorities.

In the present case, the cyber-crime agencies had identified ₹15,000 as the disputed amount connected with the petitioner’s account.

Whether the petitioner’s bank account, frozen pursuant to information or directions from police/cyber-crime agencies, should be unfrozen subject to preservation of the disputed amount of ₹15,000?

Whether the disputed amount should be retained in a fixed deposit pending appropriate orders by the competent Judicial Magistrate under the applicable law?

Whether the remaining balance in the petitioner’s account could continue to remain frozen in the absence of any identified dispute concerning that amount?

The Court exercised its jurisdiction under Article 226 of the Constitution to issue appropriate directions concerning the freezing of the petitioner’s 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 communications, the disputed amount may be segregated and placed in a fixed deposit, while the remaining funds may be made available to the account-holder; liquidation of the fixed deposit should depend on orders of the competent Judicial Magistrate within the prescribed period.

The Court further directed the police agency to proceed in accordance with the applicable provisions of the BNSS or other relevant law governing seizure/freezing of property and the reporting of such action to the competent Magistrate.

The Court treated the petitioner’s case as materially identical to Malcolm Murayis . Applying that precedent, it concluded that an indefinite freeze of the entire account was not justified merely because cyber-crime agencies had identified a particular disputed transaction.

The appropriate safeguard was to preserve the identified amount of ₹15,000 in a fixed deposit until the competent Judicial Magistrate passed appropriate orders within three months, while allowing the petitioner access to the undisputed balance.

Since no continuing basis was shown for freezing the remainder of the account, the Court directed that the account be unfrozen except to the extent necessary to secure the disputed amount.

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

The petitioner’s bank account was directed to be unfrozen, and the remaining amount, if any, was expressly held not to require freezing and was to be released to the petitioner.