MP HC Unfreezes YES Bank Account, Keeps Disputed ₹18,000 in FD While Police Have 3 Months to Obtain Magistrate’s Order

The petitioner sought relief under Article 226 of the Constitution against the freeze imposed on his Yes Bank account, alleging that it had been frozen without lawful authority or an order

The Court was informed that the disputed amount was ₹18,000

The petitioner relied on Malcolm Murayis v. State Bank of India and on the subsequent decision in Archana v. State of Madhya Pradesh, which discussed the Ministry of Home Affairs’ Standard Operating Procedure (SOP) dated 10 April 2026 for grievances concerning accounts put on hold through the NCRP-CFCFRMS

Article 226 empowers the High Court to grant appropriate relief against unlawful or disproportionate restrictions on bank accounts.

In Malcolm Murayis v. State Bank of India, the Court directed that the disputed amount be secured in fixed deposits and permitted its withdrawal if the competent Magistrate did not pass the requisite orders within three months.

In Archana v. State of Madhya Pradesh, the Court set out SOP-based safeguards, including that account restrictions should ordinarily be limited to the suspected amount, that freezing should be proportionate and supported by reasons, and that banks and investigating agencies should follow the prescribed grievance procedure and timelines.

The Court applied these decisions mutatis mutandis to the present case.

Applying Malcolm Murayis and Archana, the Court considered that the identified disputed amount was ₹18,000 and concluded that the account need not remain frozen in its entirety.

It directed that the disputed sum be kept in a fixed deposit while the petitioner was permitted to operate the account.

The Court also left the Bank free to act in accordance with law and the SOP if it received a complaint concerning another transaction.

The disputed amount of ₹18,000 was to be kept in a fixed deposit and could be liquidated only after orders were passed by the competent Judicial Magistrate within three months; failing that, the petitioner could withdraw the amount under intimation to the police agency.