Unfreeze bank accounts by securing disputed cybercrime funds in fixed deposits pending time-bound judicial adjudication.

The petitioner approached the High Court under Article 226 of the Constitution seeking a direction to Respondent No. 1 (State Bank of India) to defreeze her bank account, which had been placed under a hold/lien.

The petitioner contended that her case was identical to the matter of Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), wherein bank accounts were frozen by banks solely based on intimations from various cyber cell police stations regarding alleged cyber fraud/crypto trading without prior notice to the account holders.

In the relied-upon precedent, the court noted that investigating agencies often failed to comply with statutory requirements, such as informing the Magistrate of the seizure.

1. Whether the respondent bank can indefinitely freeze the petitioner’s account based on police intimations without the investigating agencies following the mandatory statutory procedures for seizure.

2. Whether the petitioner is entitled to operate her bank account subject to the preservation of the specific disputed amount allegedly linked to cybercrime.

The court primarily relied on Article 226 of the Constitution of India regarding the High Court's power to issue writs for the enforcement of rights.

It applied the procedural requirements for the seizure of property by police as contemplated under Section 102 of the Code of Criminal Procedure (Cr.P.C.), and its successor provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS).

The court followed the judicial precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others, which mandates that disputed amounts be secured in fixed deposits while allowing the remainder of the account to be operational.

The court observed that the petitioner’s situation was squarely covered by the Malcolm Murayis decision, where the court found a "poor functioning and irresponsible approach" by cyber crime cells that freeze accounts via email but fail to respond to legal proceedings or comply with Section 102 of the Cr.P.C.

Applying the principle of mutatis mutandis, the court reasoned that the interests of justice would be served by balancing the needs of the criminal investigation with the petitioner's right to access her funds.

The court determined that the specific "disputed amount" identified by the crime agencies should be isolated and secured, rather than freezing the entire account indefinitely, especially when agencies fail to timely approach a competent Magistrate.

The bank was ordered to keep only the specific disputed amount (as informed by the crime agencies) in a fixed deposit (FD).

The court held that this FD shall only be liquidated upon orders from a competent Judicial Magistrate within three months, during which time the police are expected to proceed in accordance with the BNSS.

Should the agency fail to act within three months, the petitioner is permitted to withdraw the FD amount under intimation to the police agency.