The Lucknow bench of the Allahabad High Court on Friday expressed displeasure over what it termed a growing tendency of banks to arbitrarily freeze accounts, observing that a bank acts as a trustee and not an investigative agency.
A division bench of Justice Shekhar B Saraf and Justice Avadhesh Kumar Chaudhary imposed a cost of Rs 50,000 on Indian Overseas Bank for freezing a customer’s account without valid justification, directing that the amount be paid to the account holder within four weeks.
The order came while allowing a petition filed by M/s SA Enterprises, a company which deals in fishery machinery.
In its plea, the company stated it had received Rs 23 lakh in its bank account through RTGS on January 16, 2026. The bank froze the account citing suspicion as the firm had declared an annual income of Rs 5.76 lakh at the time of opening the account.
In its defence, the bank argued that the transaction appeared suspicious and the action was taken under provisions of the Prevent​The Lucknow bench of the Allahabad High Court on Friday expressed displeasure over what it termed a growing tendency of banks to arbitrarily freeze accounts, observing that a bank acts as a trustee and not an investigative agency.
A division bench of Justice Shekhar B Saraf and Justice Avadhesh Kumar Chaudhary imposed a cost of Rs 50,000 on Indian Overseas Bank for freezing a customer’s account without valid justification, directing that the amount be paid to the account holder within four weeks.
The order came while allowing a petition filed by M/s SA Enterprises, a company which deals in fishery machinery.
In its plea, the company stated it had received Rs 23 lakh in its bank account through RTGS on January 16, 2026. The bank froze the account citing suspicion as the firm had declared an annual income of Rs 5.76 lakh at the time of opening the account.
In its defence, the bank argued that the transaction appeared suspicious and the action was taken under provisions of the Prevent ​Latest News [ SOBAN NEWS: International and National ]
