Karnataka HC: Police Can Freeze Bank Accounts During Probe Without Prior Magistrate Approval
The Karnataka High Court has ruled that police officers are not legally required to obtain prior approval from a magistrate before freezing bank accounts or seizing assets during an investigation. The decision clarifies the interplay between two provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), the country's new criminal procedure code.
Justice M. Nagaprasanna observed that Section 106 and Section 107 of the BNSS operate in distinct fields. While Section 106 empowers police to seize property and later inform the magistrate, Section 107 deals with attachment, forfeiture, or restoration of property. The court said these provisions are “complementary, not competitive” and cautioned against an interpretation that would render Section 106 irrelevant.
The ruling came in response to petitions filed by the Bengaluru city police challenging a sessions court order. That order had directed the police to de-freeze bank accounts of JAR Gold Retail Pvt. Ltd., an online gold investment start-up, and to release 2,489 kg of gold and silver bars seized from the company. The sessions court had held that the freeze was illegal because the police had not obtained prior magistrate permission under Section 107.
Rejecting this reasoning, the High Court noted that Parliament deliberately retained Section 106 in the BNSS, mirroring Section 102 of the erstwhile Criminal Procedure Code (Cr.PC), while simultaneously adding the procedural requirement in Section 107. The court said the two sections are part of a single statutory scheme but serve different purposes.
To illustrate the practical importance of immediate action, the court cited a cyber fraud scenario. If a person loses ₹50 lakh through online fraud, the police must act within seconds or minutes to preserve the money. Under Section 106(3) of the BNSS, police can issue a prohibitory direction first and then report the action to the magistrate promptly. Waiting for prior judicial approval could allow the money to move through multiple accounts, cross jurisdictions, or vanish entirely.
The High Court also criticised the sessions court for “overstepping its jurisdiction” by questioning the validity of the case registered against JAR Gold Retail. The court noted that both the High Court and the Supreme Court had already upheld the registration of the case, making the sessions court's observation uncalled for.
The judgment provides clarity for investigating agencies across the state, reinforcing that the power to freeze assets during investigation is an essential tool for preventing the dissipation of evidence or proceeds of crime. It also underscores the need for a balanced reading of procedural laws, ensuring that investigations are not hampered by avoidable delays.
