Regarding bank account freeze

Banks cannot adjust your other account balance towards the outstanding/ unpaid loan amount, however the banks generally do that despite knowing that it is illegal.

Even a complaint with the banking ombudsman or RBI will not fetch you any desired relief.

You can approach consumer forum with a complaint for unfair trade practice and deficiency in service and can even ask for compensation.

But of course it will be a stretched litigation 

Since the Bank has issued legal demand notice under the provisions of SARFAESI Act, move to concerned / jurisdictional DRT and obtain suitable stay / defreeze order through a local prudent lawyer. No Financial institution can freeze your account without due process of law.

I'm sorry to hear about the difficulties you've faced regarding your loan and financial situation. The Sarfaesi Act empowers banks to take possession of assets without a court intervention in cases of default. If the bank has issued a legal notice and obtained a stay order from the high court, they might have acted within their rights to freeze your account and recover the outstanding amount.

However, freezing your account without notice or your consent may not align with proper procedures. You may consider consulting a lawyer specializing in financial law or consumer rights to understand if the bank's actions were lawful. It's essential to gather all documentation related to your loan, payments made, legal notices, and the freeze on your account.

Moreover, during negotiations, any payments made towards the loan or credits in your bank account should ideally be considered. It's crucial to have a detailed account statement reflecting all transactions and payments to support your case.

Given the complexity of the situation, legal advice tailored to your circumstances is vital. You might explore options to settle the matter amicably through negotiations or seek legal recourse if the bank's actions are deemed unjust or against legal protocols. Remember, seeking professional legal counsel would be your best course of action to navigate this challenging situation effectively.

Best option. in the given circumstances, is in approaching the Consumer Forum.