Banks Can Freeze Only Disputed Amount, Must Allow Customer To Operate Rest Of Account: Rajasthan High Court
The Rajasthan High Court made a significant ruling while hearing a writ petition challenging action of State Bank of India of freezing the account of the petitioner, reflecting guiding principles for the Banks as well as the Investigating Agencies in such cases.While disposing the writ petition, the bench of Justice Nupur Bhati, directed the bank to keep only such amount frozen in...
The Rajasthan High Court made a significant ruling while hearing a writ petition challenging action of State Bank of India of freezing the account of the petitioner, reflecting guiding principles for the Banks as well as the Investigating Agencies in such cases.
While disposing the writ petition, the bench of Justice Nupur Bhati, directed the bank to keep only such amount frozen in the petitioner's account that was allegedly transferred illegally while allowing the petitioner to freely use his account and make transactions using the remaining balance.
The Court further observed that in case the bank had not received any information regarding the exact figure of the disputed amount, it shall write a letter to the concerned Investigating Officer/Police to know the amount to be earmarked for lien.
It was further stated that after receiving such communication or letter from the bank, the concerned Investigating Officer/Police was obligated to provide such information within a period of 7 days, following which the bank shall earmark that amount for lien.
However, in case no reply was received from the concerned Investigating Office/Police, the bank was duty bound to act in accordance with the instant order.
Accordingly, with these directions, the writ petition was disposed of.
Title: Sayed Sarfaraj v Reserve Bank of India & Anr.
Citation: 2025 LiveLaw (Raj) 403
Counsel for Petitioner: Mr. Aakash Goyal