If found guilty, Bhajji will be in violation of a level 4 offence of the ICC player code of conduct. It's a charge that carries it with a ban ranging from ten games to life.
He will miss the Mumbai Indians match on Sunday.
Harbhajan Singh had allegedly slapped Kings XI Punjab pacer S Sreesanth on Friday night.
Farokh Engineer gave his decision based on prima facie video evidence provided by Sony & TWI.
"A decision has been reached to suspend with immediate effect Harbhajan Singh of the Mumbai Indians pending the inquiry into the incident on Monday, April 28th 2008," IPL Commissioner said in a press release.
A final verdict would be announced after the hearing at New Delhi on Monday.
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Bhajji 'slaps' Sreesanth during match
Harbhajan Singh must have probably been asking Lalit Modi to save him from the wrath of the cricketing world after his altercation with Sreesanth. But it obviously did not work.
The inquiry into the incident at Mohali in the game between King's XI Punjab and Mumbai Indians will now take place at the Maurya Sheraton, New Delhi on April 28th 2008.
As per the ICC Code of Conduct, slapping a fellow player constitutes a level 4 offence and could lead to a life ban or a minimum ban of five Tests to 10 ODIs. BCCI President Sharad Pawar said that he had told the IPL Chairman if there was prima facie evidence of wrong-doing on the part of any player, the IPL should take immediate action against the player.
The immediate provocation for Harbhajan's action last night appears to be Sreesanth saying "hard luck" to the off spinner who was in a bad mood following the Mumbai team's third successive loss.
As the cricket world reacted with shock and condemned his behaviour, the Mumbai Indians brazenly announced late evening that Singh would captain Sunday's match against Deccan Chargers in Mumbai in the absence of an unfit Sachin Tendulkar.
But shortly, Modi's announcement came as a setback to the team which has already lost all the three matches in the tournament so far.
Symonds - Bhajji incident
The thing going against Harbhajan the most is his reputation, earlier this year he was involved in a racism row against Andrew Symonds in Australia.
At that time the entire country and the board had backed him but that support is unlikely this time around.
"I guess the Australians will be laughing at the moment saying we have been trying to tell you this for such a long time. I think we can laugh about it at the moment but it is quite sad," Ajay Jadeja, former Indian cricket player.
But there are those who feel Bhajji should be given a fair chance to defend himself.
"This is what he does for a living, he plays cricket and if there is enough proof, then he might have to suffer the fate of his actions and the punishment as well.
"If he didn't and if that comes about because of extensive questioning, extensive search should we say, then lets not damn him before his time," said Charu Sharma, CEO, Bangalore Royal Challengers.
The BCCI meanwhile is waiting for an explanation from Harbhajan before making their decision. They have given the off-spinner time till Monday to tell them his side of the story.
"Harbhajan is a contracted player and is under the purview of the Code of Conduct of the BCCI, and he has already been served a show cause notice and the BCCI disciplinary committee will take appropriate action," said Niranjan Shah, secretary, BCCI.
Both Harbhajan and Sreesanth tried to downplay the incident. The off-spinner said the issue has been "sorted out" and the pacer remarked that Harbhajan is like his "elder brother".