MP High Court Directs IDFC First Bank to Unfreeze Account, Converts Disputed Cyber-Fraud Amount to Fixed Deposit

The Madhya Pradesh High Court at Indore applied its earlier ruling in Malcolm Murrays to direct that only the disputed cyber-fraud amount be ring-fenced in a fixed deposit, freeing the rest of the account.

The High Court of Madhya Pradesh at Indore, in a writ petition filed under Article 226 of the Constitution of India, has directed IDFC First Bank to unfreeze the bank account of Dekain Perfecttech Solutions Private Limited and to place only the amount flagged by cyber-crime agencies into a fixed deposit. Justice Subodha Bhayankar, sitting singly, disposed of the petition on 22 June 2026 by applying the court's earlier decision in Malcolm Murrays & Ors. v. State Bank of India and Others (W.P. No. 1100 of 2024, decided 26 April 2024). The fixed deposit can be liquidated only after a competent Judicial Magistrate passes orders within three months; if no such order is passed in time, the petitioner may withdraw the amount after intimating the police agency.

The Account Freeze and the Petitioner's Grievance

Dekain Perfecttech Solutions Private Limited, through its director Sanjay Sharma, approached the High Court seeking two reliefs: an order directing IDFC First Bank to unfreeze or remove the lien marked on Account No. 10200602447, and a direction restraining the bank from creating any hindrance in the lawful operation of that account.

The petitioner's counsel, Shri Harshwardhan Sharma, submitted that the account had been frozen solely on the basis of intimations sent by cyber-crime cells of various police stations, which alleged that the account was involved in cyber fraud. The petitioner contended that it had never received any notice from any police station regarding its involvement in any such offence and that it was lawfully carrying on its business. The submission was that some person involved in fraud may have transacted through the petitioner's account, but that did not justify a complete freeze without notice.

Counsel also pointed out that none of the investigating agencies had complied with Section 102 of the Code of Criminal Procedure by informing the concerned Magistrate about the seizure of the account.

The Bank's Position and the Precedent in Malcolm Murrays

Counsel for IDFC First Bank submitted that the bank had not frozen the account on its own initiative but only pursuant to instructions from various cyber-crime cell police stations, and that it was bound by those instructions.

The petitioner's counsel argued that the present case was squarely covered by the court's earlier decision in Malcolm Murrays & Ors. v. State Bank of India and Others. In that case, the petitioners were engaged in trading of crypto and virtual currency, and their accounts with State Bank of India and ICICI Bank had been frozen on intimations from cyber-crime cells of multiple police stations alleging cyber fraud. The court had noted that State Bank of India had sent emails to the concerned cyber-crime cells in compliance of an interim order, but that except the cyber-crime cell of Bangalore, Karnataka, no other police station had responded to those emails. The court had observed that this demonstrated the “poor functioning and irresponsible approach” of those cyber-crime cells, which had sent emails to banks directing freezes but were unwilling to respond when contacted.

In Malcolm Murrays, the court had directed as an interim measure that each petitioner be allowed to withdraw Rs. 50,000 per month from their respective accounts. On final disposal, it directed that the disputed amount as communicated by the cyber-crime agencies be kept in fixed deposits, to be liquidated only after orders by a competent Judicial Magistrate within three months, failing which the petitioners could withdraw the amounts under intimation to the cyber-crime agencies.

How the Court Reasoned in the Present Case

Justice Bhayankar considered the submissions and the record and held that the decision in Malcolm Murrays applied mutatis mutandis to the present case. The factual matrix was materially the same: a business account frozen on the basis of cyber-crime cell intimations, without the petitioner having received any notice, and without the investigating agency having approached a Magistrate under the relevant statutory provisions.

The court's approach in both cases reflects a consistent position: a complete freeze of a business account, based only on an email from a cyber-crime cell and without Magistrate oversight, cannot be sustained indefinitely. The disputed amount — the specific sum identified by the agencies as linked to cyber fraud — is to be ring-fenced in a fixed deposit so that it remains available if the investigation results in a lawful order. The remainder of the account is freed for normal operation.

In the present case, the court directed that the police agency proceed in accordance with law under the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS) or any other law on which it was relying. The three-month window is intended to give the investigating agency a defined period to obtain proper judicial authorisation for the continued retention of the disputed funds.

Outcome

Justice Subodha Bhayankar disposed of Writ Petition No. 18579 of 2026 with the following directions:

• IDFC First Bank is directed to unfreeze Account No. 10200602447 of Dekain Perfecttech Solutions Private Limited.
• The disputed amount, as communicated to the bank by the crime agencies, is to be kept in a fixed deposit.
• The fixed deposit shall be liquidated only after orders are passed by a competent Judicial Magistrate within three months.
• If no such order is passed within three months, the petitioner may withdraw the amount kept in the fixed deposit after giving intimation to the police agency.

The State of Madhya Pradesh was represented by Shri Tejas Vyas, Panel Lawyer appearing on behalf of the Advocate General.