The Bombay High Court has made an important decision about how banks and investigating agencies handle people's bank accounts. Let's dive into what happened and why it matters.
The case involved several requests, including one by Mr. Dev Dilip Duwani, against the Union of India and others. The main issue was whether investigating agencies can freeze bank accounts under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
The accounts were frozen because of a cyber fraud. Some of the money from this fraud ended up in these accounts. The investigating agency told the banks to freeze them, but sometimes the banks did it without any official notice.
"It's a mystery how the banks chose to freeze the accounts on their own."
The court looked at previous decisions, especially from the Kerala High Court, which said that agencies can't freeze accounts just like that. They need to follow proper steps under the BNSS.
According to the BNSS, Section 106 allows taking control of things, but not freezing accounts. Section 107 talks about taking control of property and requires a Magistrate's order.
"Taking control under Section 106 can be done by a police officer, but taking control of property under Section 107 needs a Magistrate's order."
The judges, Anil L. Pansare and Raj D. Wakode, decided that the orders to freeze accounts under Section 106 were not valid. They canceled those orders and set them aside.
Banks can hold disputed amounts but can't freeze accounts without a specific order from a proper authority. They should follow the guidelines from the Citizen Financial Cyber Frauds Reporting and Management System.
If anyone suffered losses because of this, they can ask for compensation. The court allowed the requests partly and concluded with these observations.
This judgment is a big deal for anyone worried about their bank accounts being frozen without proper reasons. It's a reminder that there are rules to protect people's money, and those rules need to be followed.
