Case Details

In a significant ruling, the Delhi High Court (Justice Purushaindra Kumar Kaurav) held that investigating agencies cannot freeze or attach bank accounts under Sections 106 and 107 of the Bharatiya Nagarik Suraksha Sanhita, 2023 without prior authorisation of a competent Magistrate, especially when the account holder is neither an accused nor a suspect. The Court clarified that Section 106 BNSS is limited to seizure for evidentiary purposes and does not permit debit-freezing of bank accounts. Attachment or freezing to secure alleged proceeds of crime can be done only under Section 107 BNSS and only through judicial orders. The blanket freezing of a jewellery company’s accounts, without any material showing its involvement in cyber fraud, was held to be arbitrary, disproportionate, and violative of Articles 19(1)(g) and 21 of the Constitution. Consequently, the Court quashed the freezing directions and ordered immediate defreezing of all accounts.

Legal Issue

Whether police or investigating agencies can freeze bank accounts under Sections 106 and 107 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) without prior judicial approval, particularly where the account holder is neither an accused nor a suspect.

Brief Facts

The petitioner, a jewellery company, had multiple bank accounts frozen pursuant to communications issued by investigating agencies in connection with alleged cyber fraud involving a third-party customer. The petitioner was neither named as an accused nor treated as a suspect in any investigation. Aggrieved by the blanket freezing of accounts, which severely impacted business operations, the petitioner approached the Delhi High Court challenging the action as arbitrary and unlawful.

Court’s Reasoning

The Delhi High Court held that Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 is limited to the seizure of property strictly for evidentiary purposes and does not confer any power on investigating agencies to attach or debit-freeze bank accounts. It clarified that freezing or attachment of bank accounts for securing alleged proceeds of crime can be carried out only under Section 107 BNSS and that too strictly pursuant to an order passed by a competent Magistrate. The Court further observed that a blanket freezing of bank accounts of an entity which is neither an accused nor even a suspect is manifestly arbitrary and wholly disproportionate. Such coercive action, taken without any material to indicate complicity, was held to violate fundamental rights, particularly the right to carry on trade and business under Article 19(1)(g) and the right to livelihood and dignity under Article 21 of the Constitution.

Judgment

The Delhi High Court set aside the freezing directions and ordered immediate defreezing of the petitioner’s bank accounts. It clarified that investigating agencies remain at liberty to proceed in accordance with law, subject to statutory safeguards, if any incriminating material emerges.

Access the official judgement/order here

Court

High Court of Delhi

Bench

Justice Purushaindra Kumar Kaurav