The Karnataka High Court has ruled that police can freeze bank accounts under Section 106 of the BNSS without court approval, potentially accelerating investigations into digital financial crimes, amid ongoing judicial scrutiny of account freeze procedures.
The Karnataka High Court has ruled that police can debit-freeze bank accounts during a criminal investigation under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023, without first obtaining a court order, according to a release from the Karnataka State Cyber Command. The order, delivered by Justice M. Nagaprasanna, says investigators must, however, report the freeze to the jurisdictional magistrate without delay.
The court also set aside earlier directions from the principal city civil and sessions judge in Bengaluru that had ordered the release of gold and silver and the unfreezing of bank accounts in a case linked to M/s JAR Gold Retail Pvt Ltd and a complaint under the Banning of Unregulated Deposit Schemes Act, 2019. According to the release, the bench drew a clear line between Section 106, which allows police to preserve property during inquiry, and Section 107, which governs formal attachment and possible forfeiture through the courts.
That distinction matters because Section 107 involves a fuller legal process, including approval from a senior police officer, a court application, a 14-day notice and a hearing. The High Court said requiring officers to seek advance permission before freezing every suspect account could slow investigations, especially in cyberfraud cases where money can be moved in seconds.
The ruling is likely to be welcomed by investigators dealing with digital financial crime, but it sits alongside a growing body of judicial scrutiny over account freezes. The Indian Express recently reported that the Karnataka High Court ordered the unfreezing of a sister concern’s account in another case, calling the move arbitrary, while the Bombay High Court has taken a stricter view, holding that investigators do not have power to debit-freeze accounts under Section 106 and must instead proceed under Section 107.
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