No prior magistrate approval needed for police to freeze bank accounts during probe: Karnataka HC
The High Court of Karnataka has said that the police cannot be compelled to freeze bank accounts or seize certain assets only with the prior
The High Court of Karnataka has said that the police cannot be compelled to freeze bank accounts or seize certain assets only with the prior permission of the magistrate as per Section 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) during the investigation when Section 106 of BNSS clearly empowers the police to first freeze accounts/seize assets and later intimate the magistrate. “Section 106 (Power of police officer to seize certain property) and 107 (Attachment, forfeiture or restoration of property) are complementary, not competitive; concurrent in the statutory scheme, but distinct in their fields of operation,” the court said, while pointing out that “Section 107 of the BNSS cannot be so expansively construed as to swallow Section 106 of the BNSS, as such an interpretation would render the legislative re-enactment of Section 106 of the BNSS substantially otiose.” Justice M.
Nagaprasanna made these observations while allowing petitions filed by the city police, who had challenged the legality of the sessions court’s April 4 order direction to the police to de-freeze the bank accounts of JAR Gold Retail Pvt. Ltd., an online gold investment start-up, and also release 2,489 kg of gold and silver bars seized from the company. Rejecting the contention that freezing of the company’s account was contrary to law as the police had not got prior permission from the magistrate as per Section 107 of the BNSS, the High Court said that Parliament, while enacting the BNSS, deliberately retained Section 106, which is the same as Section 102 in the erstwhile Criminal Procedure Code (Cr.PC) while introducing additional procedure in Section 107.
The High Court illustrated the practical consequences of debit freezing account after prior permission from the magistrate through a cyber fraud example where a person loses ₹50 lakh from account in an online fraud. In such cases, immediate freezing of the account within seconds or minutes is essential to preserve the victim’s money. Under Section 106(3) BNSS, the police can first issue the prohibitory direction and then promptly report the action to the jurisdictional magistrate, ensuring both legal compliance and effective protection of the funds.’ The High Court noted that if the company’s contention were accepted, the police would first approach the magistrate, and await judicial orders.
During this delay, the money could pass through multiple accounts, cross jurisdictions, be converted or disappear entirely. Also, Justice Nagaprasanna said that the sessions court had “overstepped its jurisdiction” in observing that there is still some “confusion” about the case registered against the company even after the High Court and the apex court had upheld the registration of the case.
The BriefWire