Police May Freeze Bank Accounts Without Prior Judicial Approval Under Section 106 BNSS : Allahabad High  Court

In a significant ruling clarifying the scope of investigative powers under the new criminal code, the Allahabad High Court has affirmed that banking authorities are legally justified in freezing accounts linked to suspicious transactions upon the directive of a police officer. The bench, comprising Justice Ajit Kumar and Justice Swarupama Chaturvedi, clarified that such administrative actions do not require an antecedent court order under Section 106 of the Bharatiya Nyaya Suraksha Sanhita ( BNSS ), 2023.

The Backdrop: A Teacher’s Frozen Assets

The petition was filed by Marufa Begum, a Shikshamitra (teacher) in Kaushambi district, whose salary account with the Bank of Baroda was frozen following a suspicious credit of Rs 35,000. Investigations revealed that the transaction was flagged by the Anand Cyber Crime Branch in Gujarat. Despite Begum’s claims of ignorance regarding the source of the funds and her repeated requests to the bank for de-freezing, the financial institution maintained the freeze, citing the ongoing investigation into the transaction.

The Conflict of Powers

The core legal question before the High Court was whether a bank is obligated to unilaterally freeze a client's account based on police direction without a specific order from a Magistrate. The Petitioner argued that the lack of access to her salary account caused undue hardship. Conversely, the bank and State counsel maintained that, as the funds were suspected to be proceeds of a cybercrime, they constituted "property" under investigation, necessitating the hold.

The Legal Framework: BNSS vs. CrPC

The Court relied heavily on the legislative continuity between the Code of Criminal Procedure (CrPC), 1973, and the new BNSS . The bench observed that Section 106 of the BNSS , which corresponds to the erstwhile Section 102 of the CrPC, empowers a police officer to seize any property suspected to be linked to the commission of an offence.

Drawing from the Supreme Court’s landmark decision in * Teesta Atul Setalvad vs. The State of Gujarat (2018)*, the High Court emphasized that the Investigating Officer holds the discretion to seize bank accounts provided they follow the established reporting procedures.

Key Observations

The judgment clarifies the procedural expectations for police officers:

> "From a bare reading of the aforesaid provision it is clear that a police officer is entitled to seize property of accused persons during investigation by passing orders and the only duty is to report such seizure to the Magistrate concerned. There is no obligation cast upon police to seek prior order from Magistrate for seizure of property."

The Court further noted:

> "In the event police comes to conclude that during investigation a bank account is to be freezed for suspicious transaction, it can always direct the bank to freeze such bank account. And of course, such freezing of the account shall depend upon the outcome of investigation."

Verdict and Implications

Ultimately, the High Court dismissed the petition, ruling that the bank had acted in accordance with the law. The Court highlighted that the appropriate remedy for aggrieved account holders is to approach the investigating authorities directly or seek relief from the Magistrate with territorial jurisdiction.

This judgment serves as a vital reminder to the public that while the freezing of an account is a drastic measure, it is a protected investigative power designed to preserve evidence of financial crime. For legal professionals, the decision reaffirms that the judiciary will not interfere with the police’s power to freeze property so long as the seizure is reported to the Magistrate in compliance with Section 106 BNSS . Moving forward, individuals facing account freezes must navigate the criminal procedure channels rather than invoking the High Court's extraordinary writ jurisdiction at the initial stage.