Quick Summary: The Bombay High Court decided that investigating agencies cannot freeze bank accounts under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. This affects several cases where accounts were frozen due to alleged online fraud.
Several appeals were brought before the Bombay High Court, including one by Mr. Kartik Yogeshwar Chatur against the Union of India. The main issue was whether an investigating agency could freeze bank accounts under Section 106 of the BNSS. These accounts were frozen because they were reportedly linked to online fraud.
Judges Anil L. Pansare and Raj D. Wakode heard the cases. They noticed that some accounts were frozen without proper notice from the investigating agency to the bank, causing confusion about how banks decided to freeze accounts.
"It is unclear how the Bank decided to freeze the accounts on their own."
The court mentioned a previous case by the Kerala High Court, which discussed the powers under Section 102 of the Code of Criminal Procedure, now replaced by BNSS. The Kerala High Court had clarified that police could not take property unless it was stolen or involved in a crime.
The court explained that Section 106 allows for taking evidence, while Section 107 deals with taking and giving up crime proceeds. Taking doesn't need a magistrate's order, but giving up does.
"Taking under Section 106 can be done by a police officer... whereas giving up under Section 107 needs a magistrate's order."
The court decided that freezing accounts under Section 106 is not allowed. Instead, Section 107 should be used for such actions, needing a magistrate's approval. The orders freezing accounts were canceled.
Banks are advised to follow the 'Citizen Financial Cyber Frauds Reporting and Management System' guidelines. They can hold disputed amounts but cannot freeze accounts without proper authority.
"Banks can put the disputed amount on hold, but cannot freeze the account."
The appeals were partially approved, and the orders under Section 106 were canceled. This decision clarifies that investigating agencies must follow the correct legal steps to freeze or take bank accounts.
