Only the disputed cybercrime-linked amount may remain frozen; the remaining bank balance must be defreezed.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking directions to HDFC Bank to defreeze his bank account bearing No. 50100551062968.

The account had been frozen pursuant to information or instructions allegedly received from cyber-crime/police authorities in connection with suspected cyber-fraud transactions.

The petitioner’s case was held to be covered by the Court’s earlier decision in Malcolm Murayis, W.P. No. 1100 of 2024, decided on 26 April 2024.

In that precedent, the Court had directed that the disputed amount be placed in fixed deposits pending appropriate orders from the competent Judicial Magistrate, while permitting the remaining balance to be operated by the account holders.

Whether the petitioner’s bank account, frozen pursuant to cyber-crime/police instructions, should be wholly defrozen or otherwise regulated by segregating the disputed amount?

Whether the disputed amount should remain secured in a fixed deposit pending orders of 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 operation of the petitioner’s bank account.

It applied the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors. that, where bank accounts are frozen on the basis of cyber-crime allegations, the disputed amount may be secured in fixed deposits pending lawful action by the investigating agency and orders of the competent Judicial Magistrate, while the undisputed balance should not remain frozen.

The Court referred to the obligation of the police to proceed under the applicable provisions of the BNSS, or any other enabling law, corresponding to the earlier reference to Section 102 of the Cr.P.C. concerning seizure or freezing of property suspected to be connected with an offence.

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

Balancing the investigation into suspected cyber-fraud with the petitioner’s right to access undisputed funds, the Court directed that only the amount identified by the cyber-crime or police agencies as disputed should be retained in fixed deposits.

Such amount could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months, during which period the police authorities were expected to proceed in accordance with the BNSS or other applicable law.

Since the remaining amount was not shown to require continued restraint, the Court held that it should be released from the freeze.

HDFC Bank was directed to unfreeze the petitioner’s account, while retaining the disputed amount, as identified by the police or cyber-crime agencies, in fixed deposits.

The fixed deposit could be liquidated only after orders of the competent Judicial Magistrate within three months; failing such lawful action, the amount could also be released to the petitioner under intimation to the concerned police agency.

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