MP High Court Orders Unfreezing of Firm’s Bank Account, Says Disputed Amount Can Be Protected Separately

The Madhya Pradesh High Court has ruled that a bank account cannot remain frozen indefinitely merely on the basis of communications from investigating agencies. While granting relief to a private company, the Court directed IDFC First Bank to unfreeze its account and simultaneously safeguard the disputed amount through fixed deposits.

Justice Subodh Abhyankar passed the order in a petition filed by Dekain Perfect Tech Ksolution Private Limited, which challenged the lien placed on its bank account. The company argued that the freezing of its account had severely affected its business operations and sought permission to operate the account without restrictions.

The petitioner relied on the High Court’s earlier decision in Malcolm Murayis v. State Bank of India, where accounts were frozen following allegations of cyber fraud. In that case, the Court had expressed concern over the practice of freezing accounts without timely follow-up action by investigating agencies.

Referring to the earlier ruling, the Court noted that cybercrime authorities often direct banks to freeze accounts but fail to pursue the matter further or respond to communications from banks. Such conduct, the Court had previously observed, reflects an irresponsible approach on the part of investigating agencies.

Applying the same principle, the Court directed the bank to place the disputed amount identified by crime agencies in fixed deposits. The deposits can be dealt with only after orders from a competent Judicial Magistrate within three months. If no legal action is taken within that period, the company may seek withdrawal of the amount after informing the concerned agency. The bank account was ordered to be unfrozen immediately.