The Allahabad High Court held that police cannot freeze entire bank accounts during investigation without linking all funds to alleged offences. It clarified that under BNSS, seizure powers are limited only to amounts reasonably connected with suspected criminal activity.
PRAYAGRAJ: The Allahabad High Court has ruled that though bank accounts can be treated as “property” subject to seizure during investigation, the scope of police power under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) is confined to the amount suspected to be connected with an offence. The Court held that freezing the entire account balance without showing that the whole amount is linked to alleged criminal activity goes beyond what the statute authorises and is therefore not permissible.
On the merits, the Court affirmed that a bank account qualifies as “property” under Section 106 BNSS, consistent with established Supreme Court authority. However, it made a key distinction: in this context, “property” refers to only the suspected amount, not the entire balance. The Court stressed that seizure powers are meant to be investigatory and temporary, to preserve evidence, and cannot be used to justify blanket freezing of account operations.
While Justice Ajit Kumar and Justice Swarupama Chaturvedi noted that a bank account is “property”, the Bench addressed whether Section 106 BNSS allows freezing of the full balance or only the suspected portion.
It observed,
“…Section 106(1) BNSS empowers a police officer to seize any property, which in the present context includes a bank account, that may be alleged or suspected to have been stolen, or which is found under the circumstances giving rise to suspicion of the commission of any offence. The provision makes it clear, without any ambiguity that only such property, which is suspected to be stolen or is linked to suspicious circumstances is liable to be seized. Consequently, we hold that the power of seizure is limited to the extent of the alleged or suspicious amount and cannot be construed to permit freezing of the entire operation of the bank account in absence of twin conditions prescribed in Section 106 BNSS, which empowers the police officer to seize. Property being a specific amount, the entire amount lying in a bank account cannot be freezed and operation of bank account cannot be denied”.
Advocate Akash Kumar Sharma appeared for the petitioners, while Advocate Sanjai Singh appeared for the respondents. The judgment was delivered while deciding a batch of writ petitions challenging freezing orders issued to multiple bank accounts.
The petitions arose from various instances where accounts were frozen on the basis of alleged suspicious transactions connected to cybercrime complaints reported across different states. The petitioners argued that their accounts were frozen without notice, without any specification of the suspected amount, and without following statutory safeguards under Section 106 BNSS. In several cases, the freezes affected not only the alleged proceeds but also salary and pension funds, rendering accounts inoperative.
The petitioners moved the High Court under Article 226 challenging the freezing directives issued by banks on instructions from cybercrime authorities. During the proceedings, some accounts were partially or fully de-frozen, while others remained restricted. The Court therefore examined both the legality of such actions and the breadth of police powers under the BNSS.
\It also clarified that Sections 106 and 107 BNSS operate at different stages. While Section 106 deals with immediate seizure by police subject to post-facto reporting, Section 107 governs attachment of property and requires prior judicial approval. The Court held that any prolonged or complete restriction on account operations must meet the stronger safeguards contemplated under Section 107.
The Bench noted,
“The legislative framework of the BNSS deliberately segregates the powers over property into two distinct stages of investigation: “seizure” under Section 106 and “attachment” under Section 107. Attachment is a significantly more severe step than seizure, while seizure is a preliminary, emergent action taken by police to secure physical evidence requiring only post-facto intimation. Attachment constitutes a substantive deprivation of property rights, and strictly demands judicial application of mind followed by an order attachment. So while power under section 106 lies at the discretion at police, section 107 vests power with a Judicial Magistrate only”.
On the question of jurisdiction, the Court held that the competent Magistrate is determined by the location of the bank account, regardless of where the suspicious transaction originated. The Court further clarified that prior notice to the account holder is not required before freezing under Section 106 BNSS, but mandatory post-seizure compliance must be ensured. This includes prompt reporting to the jurisdictional Magistrate and confining the action to preserving the suspected proceeds of crime. The Court also ruled that banks must inform account holders after freezing so that they can seek legal remedies and avoid undue hardship.
Accordingly, the Court directed banks to restrict only the specific amount identified by the investigating agencies and to restore full operation of accounts within one week. It also required investigating officers to clearly mention the suspected amount in freezing instructions and mandated banks to promptly communicate the freeze to account holders. Petitioners were granted liberty to approach the jurisdictional Magistrates for further relief. The batch was disposed of with these directions; some petitions became infructuous due to prior de-freezing, while others were allowed accordingly. The Court made no order as to costs.
Case Title: Ashish Rawat v. Union of India & Ors. [Neutral Citation: 2026:AHC:78406-DB]
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