MP HC Unfreezes Woman’s Bank Account, Keeps Disputed ₹49,999 In FD; She May Withdraw It If No Magistrate Order In 3 Months

The petitioner invoked Article 226 of the Constitution seeking removal of the hold or freeze on her Kotak Mahindra Bank account.

Her counsel relied on Malcolm Murayis & Ors. v. State Bank of India & Ors. and Archana v. State of Madhya Pradesh & Ors.

The Court identified ₹49,999 as the disputed amount and considered the applicability of the principles and Standard Operating Procedure (SOP) discussed in those decisions.

The Court applied Article 226 and followed Malcolm Murayis, which directed that disputed funds be kept in fixed deposits pending orders of the competent Judicial Magistrate within three months, with withdrawal permitted if such orders were not passed within that period.

It also applied Archana, which considered the Ministry of Home Affairs SOP dated 10 April 2026 and emphasized proportionate freezing, preservation of identifiable suspected amounts, and the use of the prescribed grievance process.

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

The Court held that the principles in Malcolm Murayis and Archana applied mutatis mutandis to the petitioner’s case.

It secured the identified disputed sum of ₹49,999 in a fixed deposit while permitting the petitioner to operate the account, thereby preserving the disputed funds without continuing the freeze on the entire account.

The Court also left open the bank’s ability to act lawfully if it received a complaint concerning another transaction, having regard to the SOP.

The ₹49,999 disputed amount must be kept in a fixed deposit and may be liquidated only upon orders of the competent Judicial Magistrate within three months; failing such orders, the petitioner may withdraw that amount after notifying the police agency.

The bank may take appropriate action in accordance with law and the SOP if another complaint is received.