MP HC Orders Bank To Unfreeze Man’s Account, Keep ₹40,666 In FD Pending Magistrate’s Order Within Three Months

In brief

The question

Whether the petitioner’s bank account should be unfrozen while the disputed amount is retained separately.

The court held

The Court directed that Rs. 40,666 be kept in a fixed deposit and that the petitioner’s bank account be unfrozen so he could operate it.

It also directed

The fixed deposit may be liquidated only after orders are passed by the competent Judicial Magistrate within three months; if no such orders are passed, the amount may be withdrawn by the petitioner after notifying the police agency.

Any further complaint concerning another transaction may be dealt with by the bank in accordance with law and the SOP.

The petition was disposed of accordingly.

01Facts

The petitioner filed a petition under Article 226 seeking removal of the lien or freeze on his IDBI Bank account, with the disputed amount to remain secured separately.

¶ 1 · p. 1

He relied on Malcolm Murayis & Ors. v. State Bank of India & Ors., which directed that disputed funds be placed in fixed deposits while permitting operation of the remaining account, and on Archana v. State of Madhya Pradesh & Ors., which considered the Ministry of Home Affairs’ Standard Operating Procedure (SOP) dated 10 April 2026 and set out guidelines for handling cyber-fraud account freezes.

¶ 2–4 · pp. 1–8

The Court identified Rs. 40,666 as the disputed amount.

¶ 6 · p. 8

02Issues

i.Whether the petitioner’s bank account should be unfrozen while the disputed amount is retained separately.

¶ 5–6 · pp. 7–8

ii.Whether the disputed amount should remain secured pending action by the competent Judicial Magistrate under the applicable law.

¶ 6 · p. 8

03Law Applied

Under Article 226, the High Court may grant appropriate relief concerning the freezing of a bank account. Malcolm Murayis supports securing the identified disputed amount in a fixed deposit while allowing the account holder to operate the balance, subject to the competent Magistrate’s orders within the specified period.

¶ 3 · pp. 1–2

The Archana guidelines, based on the MHA SOP dated 10 April 2026, require account freezes to be reasonable and proportionate: where practicable, only the suspected amount should be subject to a lien or debit freeze, and the investigating agency must proceed in accordance with law.

¶ 4 · pp. 3–7

The Court applied these decisions mutatis mutandis.

¶ 5 · p. 7

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 102

04Reasoning

The Court found the principles in Malcolm Murayis and Archana applicable to the petitioner’s case.

¶ 5 · p. 7

Applying the proportionality approach, it concluded that the account could be operated while the identified disputed amount of Rs. 40,666 remained protected in a fixed deposit.

¶ 5–6 · pp. 7–8

The investigating agency was expected to seek the competent Magistrate’s orders under the relevant provisions of the BNSS or other applicable law within three months; absent such orders, the amount could also be released to the petitioner, with intimation to the police agency.

¶ 5–6 · pp. 7–8