Here's a quick and simple rundown: The Bombay High Court decided that banks can't just freeze your account without proper orders. They tackled several cases where accounts were frozen due to cyber fraud suspicions.
In a bunch of cases, including one involving Mrs. Rajani Suresh Mangalani, accounts were frozen under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). The court needed to decide if this was okay.
"The common question that requires answer in these petitions is, whether an Investigating Agency has power to debit freeze an account under Section 106 of the BNSS?"
Accounts were frozen because they were linked to cyber fraud. But there was confusion. In some cases, banks got a notice to freeze accounts, but in others, they didn’t. The court found it odd that banks acted without clear instructions.
The court said people could ask for money if their accounts were wrongly frozen. They can start legal action if they want.
"We, accordingly, permit respective petitioners to seek compensation, if so desired, for such an action, by filing appropriate proceedings."
The court referred to a Kerala High Court case and the Supreme Court. They explained that Section 106 of BNSS doesn’t allow for freezing accounts without a proper process. Instead, Section 107 should be used, which involves getting a magistrate's order.
Banks can hold the disputed amounts if there's a complaint, but they can't freeze accounts outright without proper orders.
"Bank/intermediaries can put the disputed amount on lien, but cannot debit freeze the account."
The court ruled that the orders to freeze accounts under Section 106 were not valid and set them aside. They emphasized that banks and investigating agencies must follow the correct procedures.
"With the aforesaid observation, we allow the petitions partly. The orders passed under Section 106 of the BNSS in respective petitions debit freezing the accounts of the petitioners stand quashed and set aside."
In short, the court made it clear that freezing bank accounts isn't something that should be done lightly or without proper legal backing.
