Unfreeze bank accounts by securing only disputed amounts in fixed deposits pending orders from a Magistrate.

The petitioner, Yash Joshi, filed a writ petition under Article 226 of the Constitution of India challenging the freezing of his savings account (No. 6745638072) held with Kotak Bank (Respondent No. 4)

The petitioner sought a Writ of Mandamus to restore the account and associated services, including internet banking and UPI

The petitioner contended that his case was identical to Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024), wherein bank accounts were frozen by cyber cells for alleged cyber fraud without providing notice to the account holders or complying with the statutory requirements of Section 102 of the Cr.P.C.

1. Whether the freezing of the petitioner's bank account by investigative agencies without following the prescribed legal procedure is sustainable

2. Whether the petitioner is entitled to operate his bank account subject to the protection of the disputed amount alleged to be involved in cybercrime

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

It relied on the procedural safeguards regarding the seizure of property under Section 102 of the Code of Criminal Procedure (Cr.P.C.), noting the transition to relevant provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS)

The Court applied the precedent established in Malcolm Murayis & Ors. v. State Bank of India and Others, which mandates that investigating agencies must proceed in accordance with law within a specific timeframe rather than indefinitely freezing accounts

The Court found that the petitioner’s grievances were squarely covered by the decision in Malcolm Murayis

In that precedent, the Court observed that cyber crime cells often request banks to freeze accounts but fail to respond to court notices or follow the mandatory reporting requirements to a Magistrate under Section 102 Cr.P.C.

Applying this reasoning mutatis mutandis to the present case, the Court held that the petitioner should not be deprived of his entire account functionality. It reasoned that the interests of justice and investigation could be balanced by isolating only the specific disputed amount in a fixed deposit while allowing the petitioner to operate the remainder of the account.

This FD is to remain frozen for three months, during which the police agency is expected to obtain appropriate orders from a competent Judicial Magistrate under the BNSS or relevant law. If the agency fails to act within three months, the petitioner is entitled to withdraw the FD amount under intimation to the police.