Bank Account Cannot Remain Frozen Indefinitely: MP High Court Grants Relief to Firm

The Madhya Pradesh High Court has directed IDFC First Bank to unfreeze the bank account of a private company whose account was frozen following communications from crime agencies, while also protecting the disputed amount by directing that it be kept in a fixed deposit until appropriate legal proceedings are completed.

Passing the order in a petition filed by Dekain Perfect Tech Ksolution Private Limited through its director Sanjay Sharma, Justice Subodh Abhyankar held that the case was covered by an earlier decision of the Court dealing with freezing of bank accounts on the basis of cybercrime allegations. The Court disposed of the petition with directions balancing the interests of investigation agencies and the account holder.

The petitioner had approached the High Court under Article 226 of the Constitution seeking removal of the lien marked on its account maintained with IDFC First Bank. The company also sought a direction restraining the bank from creating obstacles in the lawful operation of the account. According to the petition, the freezing of the account had adversely affected its ability to conduct business operations.

Appearing for the petitioner, Advocate Harshwardhan Sharma argued that the controversy was squarely covered by the High Court’s earlier ruling in Malcolm Murayis and Others v. State Bank of India and Others, decided in April 2024. On the other hand, Shri Tejas Vyas, Panel Lawyer, appeared on behalf of the Advocate General for the State of Madhya Pradesh.

In its order, the Court reproduced substantial portions of the Malcolm Murayis judgment, which dealt with bank accounts frozen after cybercrime cells from different states informed banks that certain transactions were linked to alleged cyber fraud. In that case, the Court had noted concerns regarding the manner in which accounts were frozen and the lack of follow-up action by investigating agencies after sending communications to banks.

The earlier judgment had observed that despite emails being sent by banks to the concerned cybercrime authorities, most agencies failed to respond. The Court had remarked that such conduct demonstrated a “poor functioning and irresponsible approach” on the part of the cybercrime cells, particularly when they had initiated the process leading to freezing of accounts.

Relying on that precedent, Justice Abhyankar held that the same principle would apply to the present case as well. The Court said that the earlier ruling would be applicable “mutatis mutandis” to the dispute before it.

The High Court accordingly directed the bank to keep the disputed amount, as identified by the concerned crime agencies, in fixed deposits. The order states that those deposits may be liquidated only after appropriate orders are passed by the competent Judicial Magistrate within a period of three months. The Court further recorded its expectation that the police agency would proceed in accordance with the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS) or any other law on which it sought to rely.

Importantly, the Court clarified that if the authorities fail to take the necessary legal steps within the stipulated period, the amount kept in fixed deposits may be permitted to be withdrawn by the petitioner after giving intimation to the police agency. The Court categorically directed that “the bank account of the petitioner shall be unfrozen.”

Case Title: Dekain Perfect Tech Ksolution Private Limited through its director Sanjay Sharma v. IDFC First Bank and Others

Date of Order: June 22, 2026

Bench: Justice Subodh Abhyankar