MP HC Unfreezes Man’s Account While Keeping Disputed ₹5,000 in FD Pending a Magistrate’s Order Within 3 Months

In brief

The question

1. Whether the petitioner’s bank account should remain frozen when the disputed amount identified in the petition is ₹5,000.

The court held

The petition was disposed of with directions to unfreeze the petitioner’s account and permit its operation, while keeping ₹5,000 in a fixed deposit.

It also directed

The fixed deposit may be liquidated only after orders are passed by the competent Judicial Magistrate within three months; failing that, the petitioner may withdraw the amount after informing the police agency.

The bank may take lawful action if it receives a complaint concerning another transaction, having regard to the SOP.

01Facts

The petitioner sought de-freezing of his current bank account and removal of a lien of ₹5,000, challenging the bank’s action as illegal.

¶ 1

He relied on Malcolm Murayis v. State Bank of India and the subsequent decision in Archana v. State of Madhya Pradesh, which considered the Government’s Standard Operating Procedure (SOP) for grievances concerning bank accounts placed on hold in cybercrime cases.

¶ 2–4

The Court held that those decisions applied mutatis mutandis to the petitioner’s case.

¶ 5

02Issues

i.1. Whether the petitioner’s bank account should remain frozen when the disputed amount identified in the petition is ₹5,000.

¶ 1, 5–6

ii.2. Whether the disputed amount should be secured while permitting the petitioner to operate the remainder of the account, subject to action by the police in accordance with law.

¶ 6

03Law Applied

Under Article 226 of the Constitution, the Court may grant relief concerning an account freeze where the restraint is disproportionate to the disputed amount.

The Archana guidelines, framed with reference to the SOP dated 10 April 2026, require freezing measures to be reasonable and proportionate; where practicable, only the suspected amount should be secured, rather than the entire account.

¶ 15–16

The SOP provides a grievance-redressal mechanism and time-bound review of account holds.

¶ 11, 17

The Court also relied on Malcolm Murayis, which directed that disputed funds be placed in fixed deposits pending lawful action by the competent Magistrate, with release to the account holder if such action was not taken within the stipulated period.

¶ 3

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

Code of Criminal Procedure, 1973 Section 102

04Reasoning

Applying Malcolm Murayis and Archana to the case, the Court treated the ₹5,000 identified as disputed as the amount requiring preservation, rather than continuing a freeze on the petitioner’s entire account.

¶ 5–6

It directed that the disputed sum be kept in a fixed deposit and that the account otherwise be unfrozen, consistent with the proportionality approach in Archana.

¶ 6

The police were expected to proceed under the relevant provisions of the BNSS or other applicable law and obtain orders from the competent Judicial Magistrate within three months.

¶ 6