MP HC Unfreezes Man’s Bank Account, Holds Disputed Sum in FD for 3 Months Before Allowing Withdrawal if Magistrate Does Not Act

The petitioner invoked Article 226 seeking removal of the hold or freeze on his State Bank of India account, Account No. 20291884032, and permission to operate it.

He submitted that his case was covered by Malcolm Murayis & Ors. v. State Bank of India & Others, W.P. No. 1100 of 2024, and the Court also considered the subsequent decision in Archana v. State of Madhya Pradesh & Others, which discussed the Government’s Standard Operating Procedure (SOP) for grievances concerning accounts frozen through the NCRP-CFCFRMS.

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

The Court applied the principles in Malcolm Murayis, under which a disputed amount may be preserved in a fixed deposit pending proceedings before the competent Judicial Magistrate, while permitting withdrawal if the police do not proceed within the stipulated period.

It also applied Archana, which considered the Ministry of Home Affairs SOP dated 10 April 2026 and emphasized proportionate account restraints, grievance redressal, and compliance with prescribed procedures and timelines.

The Court directed the police to proceed under the relevant provisions of the BNSS or other applicable law.

The Court found the two cited decisions applicable to the petitioner’s circumstances and adopted their approach to balancing the investigation’s need to secure suspected proceeds against the account holder’s ability to operate the account.

It therefore directed that only the disputed amount be retained in a fixed deposit, while the account itself be unfrozen.

The fixed deposit may be liquidated only after orders are passed by the competent Judicial Magistrate within three months; if the police do not proceed within that period, the petitioner may withdraw the amount after informing the police agency.

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

The bank account was directed to be unfrozen and made available for the petitioner’s use, while the disputed amount was to be kept in a fixed deposit pending the specified judicial process.

If the competent Judicial Magistrate does not pass orders within three months, the petitioner may withdraw that amount upon intimation to the police agency.