Police must obtain Magistrate’s orders within three months to sustain disputed bank-account freezes.

The petitioner approached the Madhya Pradesh High Court under Article 226 of the Constitution seeking removal of the hold/freeze on her bank account bearing No. 4375417350 and consequential reliefs.

The petitioner’s counsel submitted that the matter was covered by the High Court’s earlier decision in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, decided on 26 April 2024.

In Malcolm Murayis, the Court had dealt with bank-account freezes imposed on the instructions of cyber-crime police agencies in connection with suspected cyber fraud and had directed that the disputed amounts be kept in fixed deposits pending appropriate orders by the competent Judicial Magistrate.

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

It applied the principle laid down in Malcolm Murayis & Others v. State Bank of India & Others, W.P. No. 1100 of 2024, that where a bank account is frozen on the instructions of cyber-crime authorities, the disputed amount may be retained in a fixed deposit, while the remaining account is permitted to operate, subject to the investigating agency obtaining appropriate orders from the competent Judicial Magistrate within the prescribed period.

The earlier decision referred to compliance with Section 102 of the CrPC concerning seizure and reporting to the Magistrate; in the present case, the Court directed the police agency to proceed under the relevant provisions of the BNSS or any other applicable law.

The Court found that the earlier decision in Malcolm Murayis was applicable mutatis mutandis to the petitioner’s case.

Following that precedent, it balanced the investigating agency’s interest in preserving any amount allegedly linked to cyber crime with the petitioner’s right to operate her bank account.

Accordingly, instead of continuing an unrestricted freeze, the Court directed the bank to keep the disputed amount identified by the crime agencies in fixed deposits.

Those deposits could be liquidated only upon orders of the competent Judicial Magistrate, which the police agency was expected to obtain within three months under the applicable provisions of the BNSS or other law.

The respondent bank was directed to unfreeze Account No. 4375417350 of the petitioner, while retaining in fixed deposit the disputed amount communicated by the crime agencies.

The fixed-deposit amount could be released only pursuant to an order of the competent Judicial Magistrate within three months.

In the absence of such an order within that period, the amount could be made available for withdrawal by the petitioner upon intimation to the police agency.