The Investigating Agency lacks authority to debit freeze bank accounts under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

JUDGMENT :

The common question that requires answer in these petitions is, whether an Investigating Agency has power to debit freeze an account under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) ?

2] There is no dispute that in all these petitions, the accounts of the petitioners have been debit freezed under Section 106 of the BNSS. The reason why the accounts are debit freezed is that there occurred some cyber fraud, and that, part of amount of the alleged fraud has been credited to the accounts of the respective petitioners.

3] We have, accordingly, heard the Counsels for both sides, and have gone through the record to find that in some cases, the Investigating Agency has issued a communication to the Bank to debit freeze the accounts of the respective petitioners, however, in many cases, even such communication is not issued to the Bank, at least, the communication is not placed before us by the concerned Bank. It is, thus, a mystery as to how the Bank chose to debit freeze the accounts of their own.

4] We, accordingly, permit respective petitioners to seek compensation, if so desired, for such an action, by filing appropriate proceedings. If such proceedings are filed, the Court shall decide the same on its own merit. We may mention here that in some cases, the amount has been transferred in terms of the Magistrate’s order, which cannot be faulted.

5] So far as Section 106 of the BNSS is concerned, the law is well settled. The High Court of Kerala in the case of Headstar Global Pvt. Limited Vs. State of Kerala & Ors. [CRL. MC NO. 3740/2025 decided on 2/6/2025], while dealing with debit freezing of account in an identical situation, took note of a judgment of the Hon’ble Supreme Court in the case of State of Maharashtra Vs. Tapas D. Neogy [(1999) 7 SCC 685], wherein, the Supreme Court held that such powers are available to the Investigating Agency under Section 102 of the Code of Criminal Procedure, 1973 (for short “the Code”), which is now replaced by the provisions of the BNSS.

6] The Kerala High Court then referred to Section 102 of the Code to opine that the provision empowers a Police Officer to seize a property, which is either a stolen property or found under circumstances, which created suspicion of commission of any offence. Conversely, the Court held that no police officer can seize any property, which is neither stolen nor found under circumstances, which created suspicion of commission of any offence.

7] The Kerala High Court then referred to two other judgments of the Supreme Court; one in the case of M.T. Enrica Lexie And Another Vs. Doramma And Others [(2012) 6 SCC 760], and another in the case of Shento Varghese Vs. Julfikar Husen And Others [(2024) 7 SCC 23], wherein, the Supreme Court explained the scope under Section 102 of the Code. Thereafter, the Kerala High Court observed in paragraph 10 as under :

“10. It is pertinent to note that all the above decisions were rendered with respect to Section 102 of the Code of Criminal Procedure and the Code did not contain any provision for seizure or attachment of the proceeds of crime, except under Chapter VII-A dealing with reciprocal arrangements with other countries for assistance in attachment and forfeiture of property in a contracting state. This lacuna is cured by retaining Section 102 of the Criminal Procedure Code as Section 106 and including Section 107 in the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS” for short). ….”

8] Thus, the Kerala High Court, taking note of the subsequent judgments of the Supreme Court, held that the Code did not contain any provision for seizure or attachment of the proceeds of crime, except under Chapter VII-A dealing with reciprocal arrangements with other countries. The Court then took note of the lacuna that occurred in Section 102 of the Code, and observed that the same has been cured by keeping Section 106 in BNSS, which is akin Section 102 of the Code, and by adding Section 107 in BNSS.

9] Taking cogniza