Justice G R Udhvani reserved the order after Setalvad's lawyer Mihir Desai summed up his arguments against the action of Crime Branch of Ahmedabad Police.
Citing rulings of various high courts, Mr Desai contended that the probe agency was required to give a notice before freezing the accounts, which was not done.
The police should have allowed Ms Setalvad to operate her account after obtaining a bond from her, which is the routine procedure in such cases, he said.
"You could have frozen the accounts provided they are required to probe a crime which has been discovered. In this case they are running the probe in reverse gear," Mr Desai said.
"Two of these accounts were FCRA accounts which cannot be frozen by the local police. (Union) Ministry of Home Affairs can do it, but the local police can't," he said.
The Crime Branch froze the accounts last year soon after it started probing a case in which Ms Setalvad and others are accused of embezzling Rs 1.51 crore collected to convert Gulberg Society -- where 69 people were killed during the post-Godhra riots -- into a museum for 2002 riots.
A lower court had last November rejected their pleas seeking defreezing of the bank accounts, observing that the accused had not cooperated with the investigation. Ms Setalvad and Mr Anand have challenged this order before the high court.
Ms Setalvad, who pursued the cases related to the riots in various courts, has also sought anticipatory bail from the Supreme Court which has granted her temporary protection from arrest pending the hearing.
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