Bombay High Court: Investigating Agencies Cannot Freeze Bank Accounts Under BNSS Section 106

Summary: The Bombay High Court decided that investigating agencies cannot freeze bank accounts under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). This decision affects several cases, including Dinshaws Dairy Foods Pvt. Ltd. vs. Union of India.

The Case Background

Dinshaws Dairy Foods Pvt. Ltd., along with other petitioners, had their bank accounts frozen. The accounts were frozen due to alleged online fraud, with some of the stolen money reportedly ending up in these accounts. Dinshaws Dairy Foods Pvt. Ltd. questioned whether the investigating agency had the right to freeze their accounts.

Confusion Over the Law: Section 106 of BNSS

The main issue was whether Section 106 of the BNSS allowed such actions. The court, led by Judges Anil L. Pansare and Raj D. Wakode, looked into whether the law supported the investigating agency's decision to freeze accounts without a judge's order.

"The law is clear that under Section 106 of the BNSS, an Investigating Agency has no power to freeze an account."

Influence of Kerala High Court

The court referred to a previous decision by the Kerala High Court, which clarified that Section 106 did not allow freezing accounts. Instead, Section 107 of the BNSS requires a judge's involvement for such actions.

Role and Responsibilities of Banks

Banks were also examined. The court noted that banks could hold the disputed amounts but not freeze accounts completely. This follows the guidelines from the Indian Cybercrime Coordination Centre.

"Banks can hold the disputed amount, but cannot freeze the account."

The Outcome

The court canceled the orders that had frozen the accounts, allowing Dinshaws Dairy Foods Pvt. Ltd. to seek compensation if they want. This decision emphasizes the need for proper legal steps before freezing accounts.

What This Means Going Forward

This judgment makes it clear that investigating agencies must follow specific legal steps under Section 107 of the BNSS to freeze accounts. Banks are advised to follow the guidelines strictly and only act on orders from the right authorities.

This case highlights the importance of understanding and following legal rules to protect individuals and businesses from unnecessary financial problems.