That implies that a fruitseller is responsible for ensuring each and every account that he is transacting with, is not involved with fraud. Is that legal ? If yes, how does that even make any sense ? Anyways, moving off-topic.Yes, I am a Lawyer.
Yes, they can freeze your account if it has any transactions with fraud-related accounts.
It happened recently in Kerala where a fruitseller's account was frozen for a transaction worth 430rs only, because the UPI used for making payment was involved in some fraud case that too indirectly.
Read here - LINK