Andhra Pradesh High Court: In a writ petition filed against the respondent Bank’s action of freezing the petitioner’s current account at the instance of the cyber cell without notice and without following due process of law, on the basis of a single Unified Payments Interface (UPI) transaction of ₹1000, a Single Judge Bench of Ravi Cheemalapati, J., directed the respondent Bank to unfreeze the petitioner’s account holding that freezing the petitioner’s account without verifying the credentials of the petitioner and without noticing his involvement in any criminal case was unsustainable, contrary to law and illegal.
Background
The petitioner, a licensed wine trader, opened a current account with State Bank of India, Mangalagiri branch, i.e. Respondent 3. The account was abruptly frozen on 19 August 2025, on the directions of Respondent 4, i.e. Cyber Cell Officer, Patna.
A case of cheating was registered in Patna against an individual, who had purchased liquor worth ₹1000 from the petitioner, by making payment through UPI in the name of Sri Sai Wines. Due to this transaction, the petitioner’s account was frozen at the instance of Respondent 4 without notice and without following due process of law. At the time of freezing, an amount of ₹8,26,633 was lying in the petitioner’s account.
The said action of freezing the petitioner’s account, without notice and without any speaking order, was assailed in this writ petition.
Analysis and Decision
The Court noted the petitioner’s contentions that the action of freezing of account without notice and without following due process of law was contrary to law and in clear violation of principles of natural justice when there was no fault on the part of the petitioner, causing irreparable loss and hardship to petitioner.
Regarding transactions in petty businesses, the Court observed that amounts are being transferred between vendors and vendees through PhonePe, Google Pay, etc. by using UPI. And if any individual purchases goods and pays through UPI using the above said applications, the vendor cannot verify the credentials of such individual.
The Court opined that without verifying the credentials of the petitioner and without noticing his involvement in any criminal case registered against the said individual, the authorities cannot freeze the petitioner’s account.
Thus, the Court held that the manner in which the petitioner’s account was frozen was unsustainable, contrary to law and illegal and issued directions to respondent Bank to unfreeze the petitioner’s account.
[Sri Sai Wines v. Union of India, Writ Petition No. 969 of 2026, decided on 22-6-2026]
Judgment Authored By: Justice Ravi Cheemalapati
Advocates who appeared in this case:
For Petitioner: Chetan Ponnuru
For Respondents: J U M V Prasad
