HC Upholds Validity of Bank Account Freezing Ordered During Cyber-Crime Investigation

The petitioner holds a position as a teacher (Shikshamitra) at a primary school and has opened a savings account (Account No. 43390100002893) at Bank of Baroda, Imamganj Branch. There was a transaction on 01/09/2022 where Rs. 35,000/- was credited to that account from Account No. 99980103448713 (IFSC FDRL0001306) maintained with Federal Bank, Puthiyara Branch (Gujarat). After that the respondent bank froze the petitioner’s account after being directed to do so by the Anand Cyber Crime Branch, Gujarat Police, in connection with the flagged transaction. The petitioner was orally informed that the account had been blocked in connection with that investigation, and she submitted applications stating she did not know the remitter and requesting de-freezing.

The bank, on instructions, maintained that it could not defreeze the account without prior approval of the Cyber Crime Department or an order of a competent court because the matter remained under investigation and the account was being treated as “property” under investigation. The State respondents argued that the key consideration is whether the officer directing the freezing acted in accordance with Section 106 of the Bhartiya Nyaya Suraksha Sanhita, 2023 (corresponding to Section 102 Cr.P.C.), and relied on the Supreme Court’s decision in Teesta Atul Setalvad v. State of Gujarat (2018)  for the legal proposition that seizure/freezing is sustainable if the statutory procedure is followed.

Issue Raised: Whether the bank was justified in freezing and continuing to freeze the petitioner’s account on the instructions of the investigating agency, and whether such freezing complied with procedural safeguards under Section 106 BNSS (earlier Section 102 Cr.P.C.).

Court’s Decision: The Bench reproduced and analyzed Section 102 Cr.P.C. (incorporated verbatim as Section 106 BNSS) and observed that a police officer may seize any property alleged or suspected to have been stolen or found under circumstances creating suspicion of the commission of an offence, and is obliged to report the seizure to the Magistrate; there is no statutory obligation on police to obtain prior Magistrate approval before seizure. Relying on Teesta Atul Setalvad, the Court endorsed the principle that where the investigating officer follows the procedure prescribed under Section 102 Cr.P.C. (now Section 106 BNSS), freezing of bank accounts on that basis is legally sustainable.

The High Court concluded that the respondent bank acted in accordance with law in freezing the petitioner’s account pursuant to directions issued by the Cyber Crime Department. The Court declined to exercise its extraordinary jurisdiction under Article 226, while granting the petitioner liberty to approach the investigating authority or an appropriate court for relief (including defreezing) once the investigation concludes; thus, the writ petition was consigned to the records.

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