MP HC Unfreezes Bank Account, Keeps Rs 1,690 Disputed Amount in FD Pending Magistrate’s Order Within Three Months

The petitioner sought relief under Article 226 of the Constitution, asking that Bank of Baroda release the undisputed funds in his account and restrict the lien to the disputed amount of ₹1,690.

He relied on Malcolm Murayis v. State Bank of India and Archana v. State of Madhya Pradesh, including the latter decision’s guidelines on account freezes and the grievance-redressal process under the Ministry of Home Affairs’ SOP dated 10 April 2026.

The Court applied those decisions to the petitioner’s case.

Article 226 empowers the High Court to grant appropriate relief where a bank-account freeze causes an unjustified restraint.

The Court applied the proportionality principles and account-freeze guidelines set out in Archana v. State of Madhya Pradesh, including that a freeze should ordinarily be confined to the suspected amount where that is sufficient to protect the investigation; a wider freeze requires justification, and authorities must act in accordance with the applicable SOP and law.

It also applied Malcolm Murayis v. State Bank of India, under which the disputed amount may be kept in a fixed deposit pending action by the competent Magistrate, with release to the account holder if the required action is not taken within the stipulated period.

The Court referred to the police agency’s obligation to proceed under the relevant provisions of the BNSS or other applicable law.

The Court considered Malcolm Murayis and Archana applicable mutatis mutandis.

Consistent with their approach, it distinguished the identified disputed sum of ₹1,690 from the remainder of the account and concluded that the dispute did not warrant continuing a freeze over the whole account.

It therefore directed that the disputed sum be secured in a fixed deposit while the account was unfrozen, preserving the disputed amount without preventing the petitioner from operating the account.

The disputed amount of ₹1,690 must be kept in a fixed deposit and may be liquidated only after orders are passed by the competent Judicial Magistrate within three months; failing that, the petitioner may withdraw the fixed-deposit amount after informing the police agency.

The Bank may take appropriate action in accordance with law if it receives a complaint concerning another transaction.