Secure disputed amounts in fixed deposits to unfreeze bank accounts pending criminal investigation.

The Petitioner, a proprietorship firm, filed a writ petition under Article 226 of the Constitution of India challenging the freezing of its Central Bank of India account (No. 3834176758) by Respondent No. 2 (Special Task Force, STF, Bhopal).

The Petitioner sought a writ of mandamus to unfreeze the account, alleging the action was arbitrary, illegal, and violated fundamental rights under Articles 14, 19(1)(g), and 21.

The Petitioner contended that the matter was squarely covered by the Court’s earlier decision in Malcolm Murayis & Ors. Vs. State Bank of India and Others (W.P. No. 1100 of 2024), which dealt with bank accounts frozen by cyber cells without following due process.

Whether the freezing of the Petitioner’s bank account was sustainable in law and whether the Petitioner was entitled to relief in light of the precedent set in Malcolm Murayis.

The Court primarily exercised its jurisdiction under Article 226 of the Constitution of India.

Procedural mandates of Section 102 of the Code of Criminal Procedure (Cr.P.C.) and the corresponding relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which govern the power of police officers to seize property and require reporting such seizures to a Magistrate.

The judicial principle established in Malcolm Murayis & Ors. Vs. State Bank of India and Others, which balances investigative requirements with the account holder's right to operate their business.

The Court observed that the Petitioner’s circumstances were identical to those in Malcolm Murayis, where accounts were frozen based on cyber cell intimations regarding alleged fraud without prior notice to the account holders or compliance with statutory reporting requirements to the Magistrate.

In the referenced precedent, the Court noted the "irresponsible approach" of investigative agencies that failed to respond to communications or follow the mandate of Section 102 Cr.P.C.

Applying this reasoning to the present case, the Court determined that the Petitioner should not be entirely deprived of account operations. It reasoned that the "disputed amount" linked to the alleged crime should be secured in a fixed deposit to protect the interests of the investigation, while the remainder of the account should be accessible to the Petitioner to prevent irreparable harm to their business.

The Court directed the Respondents to unfreeze the Petitioner’s bank account.

The Bank was ordered to keep the specific "disputed amount" (as identified by the crime agencies) in a fixed deposit (FD), which shall only be liquidated upon the orders of a competent Judicial Magistrate within three months.

If the police agency fails to proceed in accordance with the law (BNSS/Cr.P.C.) within this period, the Petitioner shall be permitted to withdraw the FD amount under intimation to the agency.