Postal Department Can't Indefinitely Freeze Fixed Deposits Over Non-Adjudicated Fraud Allegations: Telangana High Court
The Telangana High Court has held that postal department cannot indefinitely continue a freeze on Joint-B “Either or Survivor” fixed deposit accounts (joint account which allows either holder to operate it independently), merely because allegations of fraud were raised in a legal notice.This, particularly when the Department of Posts itself has made no adjudication on such allegations,...
The Telangana High Court has held that postal department cannot indefinitely continue a freeze on Joint-B “Either or Survivor” fixed deposit accounts (joint account which allows either holder to operate it independently), merely because allegations of fraud were raised in a legal notice.
This, particularly when the Department of Posts itself has made no adjudication on such allegations, no rival claimant has come forward and the governing rules otherwise permit either holder to independently operate the deposits.
Justice Nagesh Bheemapaka held that in the present matter, continued denial of access to the 75-year-old petitioner's own funds was not justified.
The Court observed that the respondent department had themselves admitted that the fixed deposit accounts were Joint-B accounts and that, under the Post Office Savings Bank Rules, 2019 and CBS operational procedures, either depositor could ordinarily withdraw or close the deposits independently without the consent of the other holder.
It further noted that the accounts had been frozen "only after receipt of a legal notice dated 09.09.2025 raising allegations of fraud", and that the Department had not undertaken any independent assessment regarding the correctness of those allegations.
"In these circumstances, the action of continuing freeze on petitioner's Fixed Deposit accounts indefinitely, without any adjudication of rights and without any statutory 11 provision authorising such continued restriction, cannot be sustained. Respondents themselves have acknowledged that accounts are Joint-B accounts permitting independent operation by either holder under the POSB Rules and CBS operational procedures. Once the Department has not undertaken any determination regarding the allegations and once respondents themselves state that they await directions of this Court, the continued denial of access to petitioner's own deposits cannot be justified".
The Petitioner had pleaded that he is a 75- year-old senior citizen suffering from serious medical condition and requires access to his funds for medical treatment and personal care. The court said that the department had not disputed that funds standing in Fixed Deposit accounts originated from petitioner's savings bank account. The had also not asserted any competing claim from any other person with respect to the deposits.
"In such circumstances, continued freezing of deposits operates as a restriction on petitioner's access to his own property and funds. When the governing rules themselves recognise the right of either holder of a Joint-B account to independently operate the deposit, the Department cannot indefinitely withhold operation of the account merely on the 12 basis of a legal notice raising allegations without any further determination," the court said.
The court was hearing a plea by Girigalla Srinivas, who stated that he was a septuagenarian in an end-stage medical condition, bedridden and unable to walk or travel, and urgently required access to his fixed deposit amounts maintained at GPO Abids for life-saving medical treatment, nursing and hospital care.
He asserted that the deposits, totalling Rs.2.40 crore, were opened in Joint-B “Either or Survivor” mode and had been funded exclusively by him from his Postal Savings Account using sale proceeds from ancestral property.
According to the petitioner, a caretaker appointed to assist him impersonated herself as his wife, manipulated identity details, and caused her name to be inserted in certain fixed deposit records. He claimed to have complained to the police and also to the postal authorities, requesting removal of the fraudulent entry and release of the deposit records. The postal authorities, however, froze the fixed deposits and declined to provide him access, though they later confirmed the existence of the deposits and the fact of freezing.
Accordingly, the High Court allowed the writ petition and directed the respondents to forthwith lift the freeze imposed on Fixed Deposit Accounts, permitting the petitioner to operate those accounts and withdraw or close the deposits in accordance with the Joint-B “Either or Survivor” mandate under the Post Office Savings Bank Rules, 2019.
The Court also directed that the amounts standing in those fixed deposits be released and credited into the petitioner's personal savings bank account with IDBI Bank subject to applicable procedural formalities, and further ordered that no third party be permitted to interfere with operation of the deposits except in accordance with law.
Case Title: Girigalla Srinivas v. Union of India & Ors.
Case No.: W.P. No.35374 of 2025
Appearance: Sri G. Santosh Pawan Babu for the petitioner; Sri Sunkari Janardhan Goud for Respondents 1 to 3.