Police Cannot Freeze Entire Bank Account Without Linking Whole Balance To Suspected Crime: Allahabad High Court
The Bench noted that Section 106 BNSS permits seizure only to the extent of suspected amount; full freezing without compliance violates the statutory scheme.
The Allahabad High Court has held that while bank accounts qualify as “property” liable to seizure during investigation, the power under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) is limited to the extent of the amount suspected to be connected with an offence. The Court held that freezing the entire bank account, without establishing that the whole balance is linked to alleged criminal activity, exceeds statutory authority and is impermissible.
On merits, the Court held that a bank account is “property” within the meaning of Section 106 BNSS, affirming settled Supreme Court precedent. However, it drew a critical distinction: the term “property” in this context refers only to the suspected amount, not the entire account balance. The Court emphasised that seizure powers are investigatory and temporary, aimed at preserving evidence, and cannot justify blanket freezing of accounts.
Justice Ajit Kumar and Justice Swarupama Chaturvedi while noting that a bank account is “property”, the Bench on the issue whether Section 106 BNSS applies to the entire balance or only the suspected amount, observed, “…Section 106(1) BNSS empowers a police officer to seize any property, which in the present context includes a bank account, that may be alleged or suspected to have been stolen, or which is found under the circumstances giving rise to suspicion of the commission of any offence. The provision makes it clear, without any ambiguity that only such property, which is suspected to be stolen or is linked to suspicious circumstances is liable to be seized. Consequently, we hold that the power of seizure is limited to the extent of the alleged or suspicious amount and cannot be construed to permit freezing of the entire operation of the bank account in absence of twin conditions prescribed in Section 106 BNSS, which empowers the police officer to seize. Property being a specific amount, the entire amount lying in a bank account cannot be freezed and operation of bank account cannot be denied”.
Advocate Akash Kumar Sharma appeared for the petitioner and Advocate Sanjai Singh appeared for respondent.
The Bench comprising delivered the judgment while deciding a batch of writ petitions challenging the freezing of bank accounts
The petitions arose from multiple instances where accounts were frozen due to alleged suspicious transactions linked to cybercrime complaints across different states. Petitioners contended that their accounts were frozen without notice, without specifying the suspected amount, and without compliance with statutory requirements under Section 106 BNSS. In several cases, entire accounts, including salary and pension funds, were rendered inoperative.
The petitioners approached the High Court under Article 226 challenging freezing of their accounts by various banks on instructions of cybercrime authorities. During the pendency of proceedings, some accounts were partially or fully de-frozen, while others remained restricted, leading the Court to examine the legality of such actions and the scope of police powers under the BNSS.
The Court clarified that Sections 106 and 107 BNSS operate in distinct domains. While Section 106 permits immediate seizure by police subject to post-facto reporting, Section 107 governs attachment of property and requires prior judicial approval. Any prolonged or complete restriction on account operations must comply with the stricter safeguards under Section 107.
“The legislative framework of the BNSS deliberately segregates the powers over property into two distinct stages of investigation: "seizure" under Section 106 and "attachment" under Section 107. Attachment is a significantly more severe step than seizure, while seizure is a preliminary, emergent action taken by police to secure physical evidence requiring only post-facto intimation. Attachment constitutes a substantive deprivation of property rights, and strictly demands judicial application of mind followed by an order attachment. So while power under section 106 lies at the discretion at police, section 107 vests power with a Judicial Magistrate only”, the Bench noted.
Addressing jurisdiction, the Court held that the competent Magistrate is determined by the location of the bank account, irrespective of where the suspicious transaction originated.
The Court clarified that although prior notice to the account holder is not a prerequisite for freezing under Section 106 BNSS, strict post-seizure compliance is mandatory. This includes prompt reporting to the jurisdictional Magistrate and ensuring that the action is confined to preserving suspected proceeds of crime. The Court further held that banks must inform account holders after freezing, enabling them to seek legal recourse and mitigate hardship.
Accordingly, the Court ordered banks to restrict only the specific amount identified by investigating agencies and restore full operation of accounts within one week. It also directed investigating officers to clearly specify suspected amounts in freezing instructions and mandated banks to promptly inform account holders of such actions. Petitioners were granted liberty to approach jurisdictional Magistrates for further relief.
The batch was disposed of with these directions, with some petitions rendered infructuous due to prior de-freezing and others allowed accordingly. No order as to costs was made.
Cause Title: Ashish Rawat v. Union of India & Ors. [Neutral Citation: 2026:AHC:78406-DB]
Appearances:
Petitioner: Akash Kumar Sharma, Ashwani Kumar, Shamasul Eslam, Advocates.
Respondents: ASGI, CSC, Sanjai Singh, Tushar Kant, Advocates.