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

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the freeze/hold imposed on his State Bank of India account bearing No. 0000037457986215 and IFSC Code SBIN0030391, contending that the account had been frozen without lawful authority or order.

The Court found that the petitioner’s case was covered by 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 cyber-crime agencies had identified ₹3,06,749 as the disputed amount connected with alleged cyber-crime transactions.

Whether the petitioner’s bank account, frozen pursuant to information or instructions from cyber-crime agencies, should be wholly unfrozen in the absence of further lawful proceedings before the competent Magistrate.

Whether the disputed amount of ₹3,06,749 should be preserved in a fixed deposit pending orders of the competent Judicial Magistrate, while permitting the petitioner to operate the remainder of the account.

The Court exercised its jurisdiction under Article 226 of the Constitution to regulate the continuation of the bank-account freeze.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, that where bank accounts are frozen on the basis of cyber-crime allegations, the disputed amount may be secured in a fixed deposit and may be liquidated only pursuant to an order of the competent Judicial Magistrate; the investigating agency is expected to proceed in accordance with Section 102 of the CrPC or the applicable legal provision.

In the present case, the Court referred to the relevant provisions of the BNSS or any other law relied upon by the police agency.

The Court held that the facts of the petitioner’s case were materially identical to those in Malcolm Murayis and that the earlier directions therefore applied mutatis mutandis.

Balancing the need to preserve the allegedly tainted funds with the petitioner’s right to access undisputed funds, the Court directed the Bank to segregate ₹3,06,749 and place it in a fixed deposit.

The amount could be released only after an order of the competent Judicial Magistrate within three months, thereby requiring the police agency to initiate and pursue lawful proceedings.

Since only the disputed amount required preservation, the remaining balance was not required to remain frozen.

The Bank was directed to keep ₹3,06,749 in a fixed deposit, which could be liquidated only pursuant to an order of the competent Judicial Magistrate within three months; failing such an order, the petitioner could withdraw the fixed-deposit amount after intimating the police agency.

The petitioner’s bank account was otherwise directed to be unfrozen, and any remaining undisputed amount was to be released from the freeze.