The Andhra Pradesh High Court has directed the State Bank of India (SBI) to immediately defreeze the bank account of a licensed wine trader after finding that the account had been frozen merely because it received a ₹1,000 UPI payment from a person allegedly involved in a cheating case. The Court held that freezing the account without notice or following due process was unsustainable in law.
Background of the Case
The petitioner, Sri Sai Wines, operates a licensed liquor retail outlet in Nuthakki Village, Mangalagiri Mandal, Guntur District. According to the petition, the business maintained a current account with SBI's Mangalagiri Branch.
The account was frozen on August 19, 2025. The trader later learned that the action had been taken on the instructions of the Cyber Cell, Patna, in connection with a cheating case registered at Bariarpur Police Station in Bihar. The trader argued that the account contained ₹8,26,633, and its freezing had brought business operations to a standstill.
The petitioner contended that a customer had purchased liquor worth ₹1,000 through UPI and that the customer was later found to be involved in a cheating case. The trader maintained that he had no connection with the alleged offence and had accepted the payment in the ordinary course of business.
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Court's Observations
Justice Ravi Cheemalapati observed that in today's commercial environment, small businesses routinely receive digital payments through UPI platforms such as PhonePe and Google Pay.
The Court noted,
"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."
The bench further observed that ordinary vendors cannot reasonably verify the background or conduct of every customer making a digital payment before accepting money.
Holding that the petitioner had not been shown to have any role in the alleged cheating case, the Court concluded that freezing his bank account solely because it had received a ₹1,000 payment from the suspected individual violated due process.
The Court also found fault with the absence of prior notice or any reasoned order before the account was frozen.
Court's Decision
Allowing relief to the petitioner, the Andhra Pradesh High Court directed the State Bank of India to defreeze Account No. 43461149232.
The writ petition was disposed of with this direction, while the proceedings against the fifth respondent (the Station House Officer, Bariarpur Police Station) were dismissed as not pressed. No order as to costs was made.
Case Details:
Case Title: Sri Sai Wines v. Union of India & Ors.
Case Number: Writ Petition No. 969 of 2026
Judge: Justice Ravi Cheemalapati
Decision Date: 22 June 2026
