1. Challenge to orders releasing seized gold and defreezing bank accounts pending investigation under Banning of Unregulated Deposit Schemes Act, 2019. (Para 2 , 4 , 7 , 10 )
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2026 Supreme(Kar) 336
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
State of Karnataka, by Koramangala Police Station, Bengaluru, Rep. by the State Public Prosecutor - Petitioner
Versus
Jar Gold Retail Private Limited - Respondent
Criminal Petition No.5929 of 2026 c/w Criminal Petition No.5930 of 2026, Criminal Petition No.5935 of 2026
Decided On : 10-08-2026
Advocates Appeared:
For the Petitioner: Sri B.N. Jagadeesha, SPP-I.
For the Respondent:Sri Sandesh J. Chouta, Sr. Advocate for Sri P. Chinnappa, Sri Angad Kamath, Amicus Curiae.
For the Petitioner: Sri B.N. Jagadeesha, SPP-I.
For the Respondent:Sri Sandesh J. Chouta, Sr. Advocate for Sri P. Chinnappa, Sri Angad Kamath, Amicus Curiae.
Debit freezing of a bank account is a "seizure" under Section 106 of the BNSS, not an "attachment" under Section 107. It requires subsequent reporting to the Magistrate rather than prior judicial permission, ensuring investigators can immediately secure assets, especially in fast-moving financial or cybercrimes.
Headnote:(A) Bharatiya Nagarik Suraksha Sanhita, 2023 - Sections 106 and 107 - Code of Criminal Procedure, 1973 - Section 102 - Banning of Unregulated Deposit Schemes Act, 2019 - Power of police to seize bank accounts - Distinction between seizure and attachment - Debit freezing of a bank account is a species of seizure under Section 106 of BNSS, which requires the police officer to report the action forthwith to the jurisdictional Magistrate, rather than an attachment under Section 107, which is a judicial process requiring prior application, approval, and a court order. (Paras 34, 36)
(B) Bank accounts are recognized as "property" within the meaning of Section 106 of BNSS and its predecessor, Section 102 of CrPC; consequently, the power to seize property includes the authority to issue prohibitory directions to a bank to freeze an account. (Paras 31, 32)
(C) Principles of Statutory Interpretation - When Parliament re-enacts a provision in substantially the same language as a predecessor statute, the judicial interpretation attached to the predecessor provision travels with it into the new statutory regime. (Para 32)
(D) Practical Necessity of Investigative Powers - Requiring prior judicial sanctioned for every debit freeze would be catastrophic for the efficacy of investigations, particularly in cybercrimes where funds are dissipated rapidly. The law allows for a "preserve first, report thereafter" sequence to ensure justice is not defeated by procedural delay. (Paras 41-44)
Facts of the case:
A company engaged in the online sale of gold was investigated for alleged offences under an act banning unregulated deposit schemes. During the investigation, the police seized precious metals and placed a debit freeze on the company's bank accounts. The trial court allowed the company's applications for the release of the seized articles and the de-freezing of accounts, reasoning that freezing bank accounts constitutes an "attachment" under the new procedural law and therefore requires the prior permission of a Magistrate. The State challenged these orders before the High Court.
Findings of Court:
The court found that Section 106 and Section 107 of BNSS operate in distinct and complementary fields. Section 106 is investigative and preservative, whereas Section 107 is adjudicatory and consequential. The power to freeze a bank account as a preservative measure remains under Section 106, provided it is reported to the Magistrate.
Issues: Whether the act of placing a debit freeze upon a bank account must be preceded by permission of the Magistrate as contemplated under Section 107 BNSS, or whether the investigating agency may freeze the account and thereafter report the factum of such seizure to the Magistrate under Section 106 BNSS.
Ratio Decidendi: The court ruled that Section 106 BNSS is a re-enactment of Section 102 CrPC and preserves the investigative power of seizure. Treating every debit freeze as an attachment under Section 107 would render Section 106 redundant and cripple the ability of police to secure volatile assets in financial crimes. Seizure (Section 106) aims to preserve property during an investigation, while attachment (Section 107) is a substantive deprivation of property rights identified as proceeds of crime, requiring judicial oversight. Therefore, a debit freeze is a seizure and does not require prior judicial imprimatur.
Result: Criminal Petitions are allowed.
Legal Category Hierarchy
- crime and sentencing
-
practice and procedure
- criminal procedure
- statutory interpretation
Table of Contents
2. State: orders ran contrary to law. Respondent: freezing of accounts without prior magisterial permission violated Section 107, BNSS. (Para 4 )
3. Sections 106 and 107 BNSS occupy distinct fields: investigative seizure vs. judicial attachment; one does not eclipse the other. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 52 )
4. Debit freezing of a bank account as an investigative measure falls under Section 106 BNSS, not Section 107 BNSS. (Para 52 )
5. Petitions allowed; orders of Sessions Judge releasing seized property and defreezing accounts quashed. (Para 53 )
6. Does Section 107 BNSS require prior magisterial permission for all debit freezing of bank accounts?
No. Debit freezing of a bank account for investigative preservation falls under Section 106 BNSS; Section 107 BNSS governs judicial attachment of proceeds of crime. (Para 31 , 32 , 33 , 34 , 35 , 36 , 52 )
7. What is the distinction between 'seizure' under Section 106 BNSS and 'attachment' under Section 107 BNSS?
Seizure under Section 106 BNSS is an immediate investigative and preservative power exercisable by a police officer; attachment under Section 107 BNSS is a judicial adjudicatory process for proceeds of crime. (Para 33 , 34 , 35 , 36 )
8. Can a police officer freeze a bank account under Section 106 BNSS without a prior court order?
Yes. Section 106 BNSS vests the police with the power of seizure, including debit freezing, subject to the mandatory requirement of forthwith reporting to the jurisdictional magistrate. (Para 32 , 39 , 40 , 52 )
9. Does Section 107 BNSS render Section 106 BNSS redundant regarding bank accounts?
No. Section 107 BNSS introduced a new mechanism for attachment of proceeds of crime; it does not obliterate the separate power of investigative seizure preserved under Section 106 BNSS. (Para 35 , 36 , 37 , 38 )
10. What is the legal consequence if an investigating officer fails to comply with Section 106(3) BNSS after a debit freeze?
Section 106(3) BNSS mandates the police officer to forthwith report the seizure to the jurisdictional magistrate; non-compliance would be a procedural violation affecting the validity of the seizure. (Para 31 , 52 )
ORDER :
Batch of these petitions filed by the State call in question separate orders passed by the Principal City Civil and Sessions Judge, Bengaluru on I.A.Nos.I, II and III of 2026 in Crime No.25 of 2026. Therefore, they are taken up together and considered by this common order.
2. Facts in brief, germane, are as follows:
The respondent/JAR Gold Retail Private Limited (‘Company’for short), a Company registered under the provisions of the Companies Act, 2013 is an e-commerce seller of gold. A crime is registered against the said Company in Crime No.25 of 2026, which comes to be challenged before this Court in Writ Petition No.5968 of 2026. This Court rejected the said petition in terms of its order dated 04-03-2026. Challenge to the said order was made before the Apex Court and the Apex Court declined to entertain Special Leave Petition against the order passed by this Court. Thus, insofar as this Court is concerned, that order became final. The issue in the lis is not with regard to the said proceeding. Subsequent to dismissal of the writ petition, applications come to be filed by the Company before the Court of Sessions under Sections 497 and 503 of the Bharatiya Nagarika Suraksha Sanhita, 2023 (‘BNSS’) seeking release of various gold and silver articles, which were seized at the time of search conducted by the State. After hearing the petitioner/State and the respondent/accused, the concerned Court allows applications directing release of gold that was seized by the Police, among other articles. The State, claiming to be aggrieved, is before this Court calling in question those orders. At the time of hearing of the petitions on 16-04-2026, this Court passed the following order:
“Petitioner-the State is before the Court calling in question an order of the Concerned Court dated 04.04.2026.
The issue arises out of a crime registered against the accused for offences punishable under the Banning of Unregulated Deposit Schemes Act, 2019. This was challenged before this Court and the challenge is repelled by an order dated 04.03.2026.
After the dismissal of the petition, the respondent appears to have filed an application before the concerned Court on 18.03.2026 Seeking release of gold, defreezing of the account and opening of the premises that stood closed pursuant to the registration of the crime.
The concerned court observing that there is lot of confusion about the registration of the crime, has given away everything by the order.
There was no confusion about the registration of the crime as this Court had already rejected the petition challenging the crime. Therefore, the concerned Court has overstepped its jurisdiction in observing that there is still confusion in the crime, notwithstanding the order passed by this Court dismissing the Petition. The Court not stopping at that, the Court appears to have now issued a show cause notice to the prosecution, as to why the order dated 04.04.2026 is not complied with. This is adding salt to injury.
Therefore the Show cause notice so issued shall remain stayed till the next date of hearing.
If no item is released in terms of the order, nothing shall be released till the next date.
Learned counsel for the respondent submits that for the purpose of payment of salary of 200 employees who work in Jar Gold Retail Private Limited, the accounts need to be in operation. Therefore for the purpose of payment of salary on the requisition submitted by the respondent as to the amount of salary, the account shall be defrozen only to that extent.
List this matter on 21.04.2026.”
On 27-04-2026, this Court passed the following order:
“Heard Sri P. Prasanna Kumar, learned counsel for respondent.
“This Court on 16-04-2026 had passed the following order:
“Petitioner-the State is before the Court calling in question an order of the Concerned Court dated 04.04.2026.
The issue arises out of a crime registered against the accused for offences punishable under the Banning of Unregulated Deposit Schemes Act, 2019. This was c
