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

The petitioner filed a writ petition under Article 226 of the Constitution seeking removal of the hold/freeze imposed on five bank accounts maintained in her name with SVC Co-operative Bank Ltd.

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

In the present case, the crime agencies had identified ₹15,634 as the disputed amount.

Whether the petitioner’s bank accounts, frozen pursuant to communications from crime/cyber-crime agencies, should continue to remain entirely frozen in the absence of further lawful proceedings before the competent Magistrate?

Whether the disputed amount of ₹15,634 should be preserved separately in a fixed deposit while permitting the petitioner to operate the remaining balance in the accounts?

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

It relied on the principle underlying Section 102 of the Code of Criminal Procedure, 1973, as applied in Malcolm Murayis, that when a bank account or funds are treated as seized or connected with an alleged offence, the investigating agency must proceed in accordance with law and place the matter before the competent Judicial Magistrate.

The Court also relied on its earlier decision in Malcolm Murayis & Ors. v. State Bank of India & Others, which directed that the disputed amount be kept in fixed deposit and permitted release of the remaining funds where the investigating agencies failed to take timely lawful steps.

For the present case, the Court referred to the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), or any other applicable law, as the governing procedural framework.

The Court held that the reasoning in Malcolm Murayis applied mutatis mutandis to the petitioner’s case.

Since only ₹15,634 had been identified by the crime agencies as disputed, an indiscriminate freeze of the petitioner’s entire bank accounts was not justified.

The Court therefore balanced the investigative interest in preserving allegedly tainted funds with the petitioner’s right to access the undisputed balance: the disputed sum was to be secured in fixed deposits pending orders of the competent Judicial Magistrate, while the remaining funds were not required to remain frozen.

The investigating agency was expected to initiate and pursue proceedings in accordance with the BNSS or other applicable law within the prescribed period.

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

The petitioner’s bank accounts referred to in the writ petition were directed to be unfrozen, and the remaining balance, if any, was expressly ordered to be released from the freeze.

The petition was disposed of.