Police cars barricaded the road to his home in Manikpur village in Sirajpur union on Saturday.
Police said they did not let the BNP leader go out for security reasons.
Moudud, a BNP Standing Committee member, told reporters that a number of police personnel were deployed in front of his house in the morning.
Moudud said he spoke to Companyganj Police Station OC and Superintendent of Police in Noakhali Md Ilias Sharif. Both denied him permission to go out.
Sharif said, “Moudud Ahmed is a senior political leader. We deployed police in front of his house considering his security.”
“The allegation of confinement is false.”
Moudud is one of the senior lawyers for their jailed party chief Khaleda Zia.
Earlier, speaking to reporters at his home in the morning, the former law minister threatened tough programmes to free Khaleda.
Awami League General Secretary Obaidul Quader, hailing from Rajapur village of the same union in Companyganj, beat Moudud in the 2008 elections and won the 2014 polls uncontested amid the boycott by the BNP and its allies.
In a clear reference to Quader, Moudud said, “We are happy that he has become a top leader of a big party. But he has failed to establish democracy in his own area.”