Bank darf nur verdächtige Beträge einbehalten; Kontosperrung darf rechtmäßige Transaktionen und Gehaltseingänge nicht vollständig blockieren.

The petitioner, a trainee Forest Officer, challenged the action of respondent No. 2 (State Bank of India) in freezing his savings/salary account (No. 37962266689) without prior notice or assigned reasons

The petitioner alleged he suffered financial hardship as his salary was credited to the frozen account

The bank orally informed the petitioner that the freeze was due to suspicious transactions related to online gaming, although no FIR or criminal proceedings had been initiated against him

The petitioner contended that the action was arbitrary and violated principles of natural justice

1. Whether a bank can freeze an entire savings/salary account indefinitely without prior notice based solely on suspicious transactions when only a portion of the funds is under investigation

The Court applied the principles of natural justice and the doctrine of proportionality in administrative action

legal standard that while banks have the authority to safeguard funds under suspicion of unlawful activity, such power must be exercised reasonably and should not extend to non-suspicious funds, such as a petitioner’s legally earned salary, which would cause undue financial hardship

The Court noted that the bank’s primary concern was the protection of specific amounts involved in suspicious online gaming transactions

However, the Court observed that freezing the entire account—including the petitioner’s salary—was excessive in the absence of formal criminal proceedings

The Court reasoned that the interests of justice would be served by balancing the bank's duty to prevent fraud with the petitioner’s right to access his lawful livelihood. Consequently, the Court determined that the bank should only withhold the specific disputed amount rather than paralyzing the entire account

The remaining balance was ordered to be released to allow the petitioner to operate the account for lawful purposes, including salary withdrawals. The bank was ordered to comply within 10 days

the order does not preclude competent authorities from proceeding according to law regarding the suspicious amount