Sanchayita Lahkar

The High Court of Bombay at Nagpur, Division Bench of Justice Anil L. Pansare and Justice Raj D. Wakode held that an investigating agency cannot debit freeze or attach a bank account under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The Court stated that the provision authorizes only seizure of property for investigation, while attachment of alleged proceeds of crime requires a Magistrate’s order under Section 107. The petitions concerned individuals whose accounts were frozen after funds linked to suspected cyber fraud were credited to them. The Bench quashed all debit-freeze directions issued under Section 106 and clarified that any such action must be undertaken only through the procedure prescribed in Section 107.

The petitions before the Court arose from instances where various individuals and an entity reported that their bank accounts had been debit-frozen by the investigating agency under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The freezing occurred after amounts suspected to be linked to cyber-fraud activities were credited to their respective accounts. The petitioners stated that in some matters, the agency had issued a communication to the concerned banks directing a freeze, whereas in several others, no such communication was produced, leaving unclear how the banks initiated the freeze.

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The petitioners contended that the agency lacked authority to debit freeze accounts under Section 106, asserting that the provision permits only seizure of property for investigative purposes. They maintained that amounts in bank accounts do not fall within the category of property that can be seized without judicial authorization. They also sought liberty to pursue compensation for the freezing of their accounts.

The investigating agency argued that the freezing was connected to ongoing investigations into cyber-fraud in which part of the alleged fraudulent proceeds had been traced to the petitioners’ accounts. The Court reviewed the statutory framework, including Sections 106 and 107 of the BNSS, and considered how these provisions are intended to regulate seizure and attachment of property during investigation.

The Court noted that the central issue requiring determination was “whether an Investigating Agency has power to debit freeze an account under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).” It recorded that in every petition, the respective accounts had been frozen under Section 106 after amounts linked to alleged cyber fraud were credited to them.

The Bench observed inconsistencies in procedure, stating that “in some cases, the Investigating Agency has issued a communication to the Bank to debit freeze the accounts… however, in many cases, even such communication is not issued… It is, thus, a mystery as to how the Bank chose to debit freeze the accounts of their own.” It permitted petitioners to seek compensation through appropriate proceedings.

The Court discussed how the Kerala High Court, in an identical matter, examined the statutory scheme. It recorded that the Kerala Bench referred to Supreme Court decisions and noted that Section 102 CrPC empowered a police officer to seize property “either a stolen property or found under circumstances, which created suspicion of commission of any offence” and that “no police officer can seize any property, which is neither stolen nor found under circumstances, which created suspicion of commission of any offence.”

The judgment reproduced the Kerala High Court’s explanation of how BNSS introduced Section 107, quoting: “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.” The Kerala Bench also held that “a police officer investigating a crime has to approach the jurisdictional Magistrate seeking attachment of any property believed to be derived directly or indirectly from criminal activity or the commission of an offence.”

The distinction between seizure and attachment was also quoted: “while Section 106 speaks of seizure, Section 107 deals with attachment, forfeiture and restoration… attachment under Section 107 can be effected only upon the orders of the Magistrate.”

Consistent with this reasoning, the Bombay High Court noted that the Kerala High Court had, in clear terms, held that a police officer must approach the Magistrate under Section 107 to seek attachment of any property believed to be derived from criminal activity and that subsequent steps must follow the Magistrate’s order.

The Court recorded that “debit freezing account is not permissible under Section 106 of the BNSS” and noted that the Supreme Court had declined interference with the Kerala High Court’s ruling. It also referred to the Citizen Financial Cyber Frauds Reporting and Management System, quoting the FAQ stating that banks “can put the disputed amount on lien… but cannot debit freeze the account.”

The Bench concluded its observations by recording that “an Investigating Agency has no power of attachment/debit freezing a Bank Account under Section 106 of the BNSS.”

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The Court stated that “the orders, which are passed by the Investigating Agency in respective petitions under Section 106 of the BNSS are liable to be quashed and set aside.” It further recorded that “Bank/intermediaries can put the disputed amount on lien, but cannot debit freeze the account.

“The orders passed under Section 106 of the BNSS in respective petitions debit freezing the accounts of the petitioners stand quashed and set aside. Tthe Investigating Agency may, however, proceed in terms of Section 107 of the BNSS to debit freeze or attach a Bank Account. The petitions are disposed of in terms of above.”

Advocates Representing the Parties

For the Petitioners: Mr. Mahendra Limaye
For the Respondents: Mr. S.A. Chaudhari, Ms. M. Lalsare, Mr. S.G. Karmarkar, Mr. R.S. Suryawanshi, Mr. P.G. Mewar, Mr. V.A. Patait, Mr. A. Sambaray, Mr. K.N. Lad, Mr. K.A. Gowardipe.

Case Title: Mr. Kartik Yogeshwar Chatur Vs. Union of India & Ors.
Neutral Citation: 2025:BHC-NAG:12612-DB
Case Number: Criminal Writ Petition No. 321 of 2025 & Connected Petitions
Bench: Justice Anil L. Pansare, Justice Raj D. Wakode