Investigating Agency Not Empowered To Debit Freeze Bank Account U/s. 106 Of BNSS: Bombay High Court

The Bombay High Court has held that an investigating agency is not empowered to impose debit freeze on bank account or attach a bank account under Section 106 of the Bharatiya Nagarika Suraksha Sanhita, 2023.

The Court was considering a Writ Petitions challenging the freezing of bank accounts by the Cyber Crime Unit of the state Police.

The Division Bench of Justice Anil L. Pansare and Justice Raj D. Wakode held, “As could be seen, Bank/intermediaries can put the disputed amount on lien, but cannot debit freeze the account."

The Petitioner was represented by Advocate Mahendra Limay, while the Respondent was represented by Advocate S.A. Chaudhari.

The common question that emerged in the Petitions was whether an Investigating Agency has power to debit freeze an account under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

It was stated that the accounts were debit freezed as there occurred some cyber fraud, and that, part of amount of the alleged fraud was credited to the accounts of the respective Petitioners.

The Court found that in some cases, the Cyber Crime Unit had issued a communication to the Bank to debit freeze the accounts of the respective Petitioners, however, in many cases, even such communication was not issued. It was, thus, it remarked, a mystery as to how the Bank chose to debit freeze the accounts of their own.

"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", the Court ruled.

It referred to the Kerala High Court's judgement in Headstar Global Pvt. Limited Vs. State of Kerala, 2025 which was arrived at after taking into consideration the rulings of the Supreme Court and reiterated that the Code do 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.

"Thus, the Kerala High Court, in clear terms, held that a police officer investigating a crime has to approach jurisdictional Magistrate under Section 107 of the BNSS to seek attachment of any property believed to be derived directly or indirectly from a criminal activity or commission of an offence. Subsequent course will have to be adopted in terms of order passed by the Magistrate. The Court further clarified that while Section 106 speaks of seizure, Section 107 deals with attachment, forfeiture and restoration. Seizure under Section 106 can be carried out by a police officer, and ex post facto report submitted to the Magistrate. On the other hand, attachment under Section 107 can be effected only upon order of the Magistrate. The logic behind this distinction being that the purpose of seizure is more to secure evidence during investigation, whereas, attachment is intended to secure proceeds of crime by preventing its disposal and, thus, ensuring its availability for legal procedure such as forfeiture and distribution to the victim/s", the Court ruled.

It thus clarified that the judgment makes it clear that debit freezing account is not permissible under Section 106 of the BNSS.

The Court also called out the Banks who despite such status, after receiving certain communications from the Cyber Crime Unit, which does not even call for debit freezing accounts, are proceeding to debit freeze the accounts of the account holders resulting into losses to their day-today affairs.

"Put all together, it is abundantly clear that an Investigating Agency has no power of attachment/debit freezing a Bank Account under Section 106 of the BNSS......The Investigating Agency may, however, proceed in terms of Section 107 of the BNSS to debit freeze or attach a Bank Account", the Court ruled.

The Petitions were accordingly partly allowed.

Cause Title: Mr. Kartik Yogeshwar Chatur V. Union of India & Ors. (2025:BHC-NAG:12612-DB)

Appearances:

Petitioner- Advocate Mahendra Limay

Respondent- Advocates S.A. Chaudhari, M. Lalsare, S.G. Karmarkar, R.S. Suryawanshi and P.G. Mewar

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