The Allahabad High Court has delivered a landmark judgment clarifying the scope and procedure for freezing of bank accounts during investigation of cyber offences under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). A division bench comprising Justice Ajit Kumar and Justice Swarupama Chaturvedi, while deciding a batch of ten writ petitions, held that the power of the police to seize property under Section 106 BNSS does not extend to freezing the entire operation of a bank account. The seizure must be limited strictly to the amount alleged or suspected to have been stolen or linked to the commission of an offence. The Court observed:
“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.”
The batch of writ petitions arose from complaints filed by various petitioners whose bank accounts were frozen by different banks on instructions received from cyber crime police stations across Uttar Pradesh. The petitioners, ranging from salaried employees, teachers, retired government servants, and small businessmen, contended that their accounts were rendered non-operational without prior notice, without any intimation to the jurisdictional Magistrate, and without supplying them copies of any FIR or complaint. They argued that such blanket freezing caused severe financial hardship, affected their livelihoods, and violated principles of natural justice and procedural safeguards under the BNSS.
The Court meticulously examined the factual matrix of each petition. In Writ-C No. 1489 of 2026, the petitioner’s Punjab National Bank account was frozen on instructions of the crime branch without specifying reasons. Similar grievances were raised in other connected petitions, where accounts in State Bank of India, HDFC Bank, Axis Bank, Union Bank of India, Bank of Baroda, India Post Payments Bank, and Airtel Payments Bank were frozen on the basis of alleged suspicious transactions originating from cyber crime complaints filed in Karnataka, Telangana, Gujarat, Haryana, Kerala, and West Bengal. In many cases, petitioners were not named as accused, nor were they provided any FIR, summons, or judicial order justifying the freezing.
Addressing the core legal issues, the bench first considered whether the term “property” under Section 106 BNSS includes an entire bank account or only the suspected amount. Relying on the Supreme Court’s authoritative pronouncement in State of Maharashtra v. Tapas D. Neogy (1999) 7 SCC 685, the Court held that a bank account qualifies as “property” within the meaning of Section 106 BNSS. However, the power of seizure is not unfettered. The bench clarified:
“Bare reading of the aforementioned provisions indicate that it empowers the investigating agency, to take necessary steps for seizure or securing of property suspected to be connected with the commission of any offence during the course of the investigation. The object underlying the provision is to enable immediate and effective action so as to preserve the subject matter of the offence and to prevent its dissipation, particularly in cases of cyber-crime, where delay may defeat the ends of justice.”
The Court further held that Sections 106 and 107 BNSS operate independently and distinctly. While Section 106 empowers a police officer to seize property during investigation without prior judicial order (subject to mandatory post-seizure reporting to the Magistrate), Section 107 deals with attachment, forfeiture, and restoration of proceeds of crime through a detailed procedure involving show-cause notice and judicial determination. The bench observed:
“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 an ex post facto report submitted to the Magistrate. On the other hand, attachment under Section 107 can be effected only upon the orders of the Magistrate. The logic behind this distinction being that the purpose of seizure is more to secure the evidence during an investigation, whereas attachment is intended to secure the proceeds of crime by preventing its disposal and thus ensuring its availability for legal procedure such as forfeiture and distribution to the victim/s.”
On the question of prior notice, the Court categorically held that Section 106 BNSS does not mandate prior intimation to the account holder before seizure. Relying on Teesta Atul Setalvad v. State of Gujarat (2018) 2 SCC 372, the bench observed:
“There is nothing in Section 102 which mandates giving of prior notice to the account-holder before the seizure of his bank account.”
However, the Court directed that banks, being service providers, must inform account holders about the seizure of their accounts after receiving instructions from investigating agencies. The bench emphasised that account holders, as consumers of banking services, are entitled to know the operational status of their accounts so that they may take appropriate legal recourse and protect themselves from undue hardship.
The Court also addressed jurisdictional concerns raised in some petitions where transactions originated from other States. It held that once a bank account is maintained within the jurisdiction of a particular Magistrate, the police officer investigating the offence can instruct freezing of that account under Section 106 BNSS, and the Magistrate having jurisdiction over the bank branch is competent to receive the report of seizure.
In view of the above, the Court directed the respondent banks to de-freeze the petitioners’ accounts forthwith, except to the extent of the disputed or suspected amounts involved in the cyber crime inquiries. The bench clarified that only such portion of the account which is linked to the alleged offence can remain under lien, while the remaining balance must be made operational immediately. The Court further granted liberty to the petitioners to approach the jurisdictional Magistrates in case any further grievance arises regarding compliance with Section 106 BNSS.
The judgment comprehensively balances the need for effective investigation of cyber offences with the protection of citizens’ fundamental rights under Articles 14 and 21 of the Constitution. It underscores that while the police have wide powers to seize suspected property during investigation, such powers must be exercised strictly within the statutory framework and cannot result in arbitrary or blanket freezing of entire bank accounts.
Case Title: Ashish Rawat v. Union of India and 6 Others (and 9 connected writ petitions)
Coram: Hon’ble Mr. Justice Ajit Kumar and Hon’ble Mrs. Justice Swarupama Chaturvedi
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