Facts
The petitioners maintained Bank Account No. 30086782755 with the State Bank of India, Masturi Branch.
Source reference: p. 2–3, paras. 2–3Petitioner No. 1, a CRPF Head Constable/GD, received his salary in the account, which was also used for repayment of home-loan EMIs.
Source reference: p. 2–3, paras. 2–3Certain credits—stated by the petitioners as ₹5,000, ₹9,500 and ₹2,782.85, and by the Bank as ₹5,000, ₹9,500 and ₹782.85—were received from unknown sources and placed under scrutiny.
Source reference: p. 3, para. 3; p. 4, para. 5In June 2026, the Bank placed a hold on the entire account, preventing the petitioners from using their salary and meeting regular financial obligations.
Source reference: p. 3, para. 3The petitioner thereafter submitted a representation dated 08.07.2026, received by the Bank on 09.07.2026, seeking de-freezing of the account or restriction of the hold to the disputed amounts, but no action was taken.
Source reference: p. 3–4, para. 4The Bank conceded that only the specified transactions were under scrutiny and that no other amount in the account was involved.
Source reference: p. 4, para. 5Issues
Whether the Bank could continue to freeze the petitioners’ entire bank account when the scrutiny was confined to certain disputed credits.
Source reference: p. 4, paras. 5–6Whether the petitioners were entitled to operate the remaining balance, subject to retention of an amount corresponding to the transactions under investigation.
Source reference: p. 4–5, paras. 6–8Law Applied
The Court applied the principle of proportionality in exercising writ jurisdiction, holding that a restraint imposed in connection with suspicious transactions must be confined to the amount actually under scrutiny and should not unnecessarily obstruct lawful use of the remaining funds.
Source reference: p. 4–5, paras. 6–8The Court also recognised that de-freezing the balance would not prevent the competent authority or investigating agency from continuing its investigation in accordance with law.
Source reference: p. 4–5, paras. 6–8Reasoning
The Bank admitted that the investigation concerned only the specified credits and that no other funds in the account were under scrutiny.
Source reference: p. 4, para. 5In view of that admission, the Court held that freezing the entire account was disproportionate because it prevented the petitioners from accessing salary and conducting ordinary lawful banking transactions, including repayment of home-loan EMIs.
Source reference: p. 3, paras. 2–3; p. 4, para. 6The Court therefore balanced the petitioners’ need to operate the account against the Bank’s and investigating agency’s interest in preserving the disputed amount, directing retention of a specified sum while releasing the balance.
Source reference: p. 4–5, paras. 6–8The order was expressly made without deciding the merits of the underlying transactions or interfering with the ongoing investigation.
Source reference: p. 4–5, paras. 6–8Holding
The Court held that continuation of the hold over the entire account was disproportionate.
It directed the Bank to retain the lien/hold only to the extent of ₹17,725.37 and to forthwith release or de-freeze the remaining balance, permitting the petitioners to undertake all lawful banking transactions with respect to that balance.
Source reference: p. 4–5, para. 7The direction was not to impede investigation, and the petitioners were required to cooperate with the competent authority or investigating agency and furnish lawfully required information and documents.
Source reference: p. 5, para. 8The writ petition was disposed of, with no order as to costs.
Source reference: p. 5, paras. 9–10Original Court PDF
RAM NARAYAN CHATURWEDIvsSTATE BANK OF INDIA
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