Commentary on Section-106 of Bharatiya Nagarik Suraksha Sanhita, 2023: Power of police officer to seize certain property – with corresponding and equivalent Section 102 of Cr.P.C.-Criminal Procedure Code.
Bare Provision
| Bhartiya Nagarik Suraksha Sanhita, 2023 | Code of Criminal Procedure, 1973 (Applicable for cases upto 30 June 2024) |
|---|---|
106. Power of police officer to seize certain property. (1) Any police officer may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence. (2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer acting under sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, or where there is difficulty in securing proper accommodation for the custody of such property, or where the continued retention of the property in police custody may not be considered necessary for the purpose of investigation, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same: Provided that where the property seized under sub-section (1) is subject to speedy and natural decay and if the person entitled to the possession of such property is unknown or absent and the value of such property is less than five hundred rupees, it may forthwith be sold by auction under the orders of the Superintendent of Police and the provisions of sections 505 and 506 shall, as nearly as may be practicable, apply to the net proceeds of such sale. | 102. Power of police officer to seize certain property.— (1) Any police officer may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence. (2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer acting under sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, or where there is difficulty in securing proper accommodation for the custody of such property, or where the continued retention of the property in police custody may not be considered necessary for the purpose of investigation,] he may give custody thereof to any person on his executing a bond undertaking to produce the property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same: Provided that where the property seized under sub-section (1) is subject to speedy and natural decay and if the person entitled to the possession of such property is unknown or absent and the value of such property is less than five hundred rupees, it may forthwith be sold by auction under the orders of the Superintendent of Police and the provisions of sections 457 and 458 shall, as nearly as may be practicable, apply to the net proceeds of such sale. |
Commentary
Introduction: Seizure of Property by Police
Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) governs the power of police officers to seize property during criminal investigations. It replaces Section 102 of the Code of Criminal Procedure, 1973 (CrPC) with effect from 1 July 2024.
In recent years, this provision has become central to disputes involving bank account freezing during cybercrime investigations. Investigating agencies frequently direct banks to freeze accounts where suspected fraud money has passed through them.
Courts across India — including the Supreme Court and several High Courts — have repeatedly clarified the limits of this power.
This article explains:
• the scope of Section 106 BNSS and Section 102 CrPC
• the judicial safeguards governing seizure of property
• the law on bank account freezing during cybercrime investigations
The provision at the heart of this debate is Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which replaced Section 102 of the Code of Criminal Procedure, 1973 (CrPC) after July 1, 2024. Let us understand what this provision actually says, what it means, and — crucially — what it does not allow.
Use in Cyber Frauds
If you are a business owner, a salaried professional, or even an ordinary citizen, there is a real and growing chance that your bank account could be frozen today, not because you are accused of any crime, but simply because a digital money trail passed through your account during a cybercrime investigation. You may not receive any notice. Your cheques may bounce. Your salary may not reach you. And when you call your bank, they may say they are “just following police instructions.”
Is this legal? Is this what the law permits? The short answer is no, not like this. And courts across India, from the Supreme Court down to various High Courts, have been saying so with increasing firmness.
Further, this article explains the law governing Section 106 BNSS and Section 102 CrPC, the judicial safeguards imposed by courts, and the remedies available when bank accounts are frozen unlawfully.
Section 106 BNSS Analysis
The text of Section 106 BNSS is virtually identical to its predecessor, Section 102 CrPC. The law provides, in essence, for three things.
First, any police officer may seize property that is alleged or suspected to have been stolen, or that is found under circumstances creating suspicion of the commission of any offence. This is the substantive seizure power — broad, quick-acting, and intended to preserve evidence in fast-moving investigations.
Second, if the seizing officer is subordinate to the Station House Officer (SHO), she must immediately report the seizure to the SHO.
Third — and this is where the important safeguard lies — every police officer who seizes property under sub-section (1) must forthwith report that seizure to the Magistrate having jurisdiction. The provision further allows that where seized property cannot conveniently be transported to court, or where it is not necessary to retain it in police custody, the officer may give custody of it to any person on a bond to produce it before the court when required.
There is also a proviso dealing with perishable property of low value (under ₹500) that may be auctioned under the orders of the Superintendent of Police — a provision more relevant to physical goods than bank accounts.
What is immediately striking is what Section 106 does not say. It does not use the word “freeze.” It does not use the word “attach.” It does not say “debit freeze.” It talks about seizure – which in the context of bank accounts has been interpreted through judicial decisions over the years.
Understanding that distinction between seizure and attachment is the key to understanding the entire debate around cybercrime-related bank account freezing.
Bank Accounts Are “Property”
The foundational case that brought bank accounts within the scope of Section 102 CrPC (now Section 106 BNSS) is the Supreme Court’s 1999 decision in State of Maharashtra v. Tapas D. Neogy [(1999) 7 SCC 685]. The Court held that a bank account constitutes “property” within the meaning of Section 102, and can therefore be seized or frozen during a criminal investigation.
This was a significant ruling, and it remains good law today. But it opened a door that, in the cybercrime era, has been kicked wide open – often with consequences that are disproportionate, unjust, and legally indefensible.
The problem is that the word “property” in a banking context does not mean investigators have carte blanche. The Supreme Court in the Tapas Neogy case itself required a direct link between the bank account and the alleged offence. And the subsequent procedural safeguards – particularly mandatory reporting to the Magistrate – were always meant to be the check on this power.
Over the last two decades, and with escalating frequency since 2020 as cyber fraud cases exploded, investigating agencies have been routinely directing banks to freeze entire accounts, sometimes based on a single automated transaction flag, without reporting to any Magistrate, without providing reasons, and without identifying the accused’s role in the offence. Banks, in turn, have complied – sometimes without even receiving a formal written order. The judiciary has had enough.
Seizure vs. Attachment
Before we look at the case law, it is essential to understand a distinction that several High Courts have now crystallised with clarity, most comprehensively in the context of the BNSS.
Section 106 BNSS deals with seizure. Seizure by police under this provision is a temporary, investigative measure — meant to preserve evidence and prevent its destruction or dissipation while the investigation is underway. It is an executive act, initiated by police. But it must be immediately reported to the Magistrate, who then takes over judicial supervision.
Section 107 BNSS deals with attachment, forfeiture, and restoration of property. Under this provision, it is the Magistrate who has the power to order the attachment of property. The investigating officer must approach the Magistrate. The Magistrate hears the matter and passes an order. Without such a Magistrate’s order, there is no attachment — legally speaking.
A debit freeze on a bank account – where the account holder is prevented from withdrawing or using any funds – is functionally an attachment, not merely a seizure. It completely strips the person of access to their money. Courts have increasingly held that such a freeze can only be sustained through a Magistrate’s order under Section 107, not unilaterally by police under Section 106.
This is the core of modern bank account freezing jurisprudence in India.
Case Laws (2024–2026)
1. Shento Varghese v. Julfikar Husen (2024 INSC 407)
This is perhaps the most important Supreme Court pronouncement under Section 102 CrPC (and by extension Section 106 BNSS) in recent years, and it needs to be understood carefully – because it is widely misquoted.
The facts: Bank accounts belonging to the respondents were frozen by police in a fraud investigation. The Madras High Court ordered defreezing on the ground that police had failed to report the seizure to the Magistrate “forthwith” as required by sub-section (3), and that this delay ipso facto vitiated the seizure.
Ratio: The Supreme Court set aside the High Court’s order and laid down the following principles:
- The word “forthwith” in Section 102(3) CrPC [now Section 106(3) BNSS] means “as soon as possible, with reasonable speed and without unnecessary delay” – it does not mean instantaneously or within a fixed number of hours.
- Non-reporting of seizure to the Magistrate does not automatically vitiate the seizure order. A delayed report is a curable irregularity, not a ground to nullify the seizure.
- However, this does not mean delay has no consequence. The Magistrate, on receiving the report, must examine whether the delay was justified. If it was unexplained or deliberate, the Magistrate may take departmental action against the erring officer.
- The pre-requisite for exercising power under Section 102(1) CrPC is the existence of a direct link between the seized property and the alleged offence. Seizure can be challenged on jurisdictional grounds, on the ground that the property does not fall within the definition, or on the ground that it cannot give rise to suspicion of an offence.
This ruling resolved conflicting High Court interpretations on whether delayed reporting vitiates seizure. The answer is: it does not vitiate the seizure, but it does not make the delay permissible either. And the requirement of eventual judicial oversight remains non-negotiable.
2. Pawan Kumar Rai v. Union of India (2024 SCC OnLine Del 8936)
This case from the Delhi High Court became something of a symbol for the absurdity that cybercrime bank freezing had reached. The petitioner was a small street vendor selling chhole-bhature — a modest daily livelihood. His bank account was frozen because ₹105 from an alleged cyberfraud chain had landed in it. He was neither an accused nor a suspect. The entire account was frozen.
The Delhi High Court defroze the account, holding that freezing without mandatory reporting to the Magistrate violates Section 106(3), and that innocent persons cannot be financially crippled for incidental credits to their accounts. The Court observed that such action violated the petitioner’s fundamental right to livelihood under Article 21 of the Constitution.
3. Mohammed Saifullah v. Reserve Bank of India (2024 SCC OnLine Mad 5604)
The Madras High Court addressed a situation where a bank froze the petitioner’s account based solely on a communication from the Cyber Crime Bureau, Telangana — with no written order, no jurisdictional analysis, and no formal direction. Only ₹2,48,835 out of a total balance of ₹9,69,580 was suspected of being linked to any offence.
The Court held that banks must not freeze accounts without a lawful written order. A verbal communication or email from police is insufficient. Freezing must be proportionate — only the disputed amount may be restricted, not the entire account balance. Banks that act on informal police communications are doing so at their own legal risk.
4. Headstar Global (P) Ltd v. State of Kerala (2025 SCC OnLine Ker 3546)
The Kerala High Court examined the statutory scheme of the BNSS with particular care in this case, making an important observation. The CrPC, it noted, never contained an explicit provision for attachment of proceeds of crime except in specific contexts (Chapter VII-A for international arrangements). The BNSS cures this gap by introducing Section 107 — a brand new provision that specifically creates judicial power to order attachment of property derived from criminal activity.
The Court held that once Section 107 BNSS exists, the police cannot bypass it by claiming to operate under Section 106. A police officer investigating a crime must approach the Magistrate under Section 107 to seek attachment. The Magistrate then passes appropriate orders. Operating under Section 106 alone — without any Magistrate order — to impose a debit freeze is not legally sustainable. The Supreme Court declined to interfere with this ruling.
5. Abdul Basith v. Cyber, Economic & Narcotic Crime (2025 SCC OnLine Ker 83)
Another important Kerala High Court decision on proportionality. Here, only ₹43,000 was allegedly linked to the offence — but the entire bank account was frozen. The Kerala High Court held that freezing must be proportionate to the amount in question. Police cannot suspend access to an entire account when only a fraction of the funds is connected to the alleged offence. The freeze was quashed to that extent.
6. Neelkanth Pharma Logistics (P) Ltd v. Union of India (2025 SCC OnLine Del 1055)
This Delhi High Court case has been widely reported — and equally widely misrepresented. Here is what actually happened.
The petitioner’s bank account, which held a balance exceeding ₹93.5 crores, was frozen by HDFC Bank acting on a direction from Vartaknagar Police Station, Thane, Maharashtra. The suspicious amount? A credit of ₹200. The petitioner company was neither an accused nor a suspect.
During the proceedings, the police themselves directed the bank to remove the debit freeze (retaining only a lien on ₹200), and the petitioner then withdrew the writ petition. So there was no final holding on the substantive law in this case — the petition was disposed of as withdrawn.
However, Justice Manoj Jain made pointed observations about the broader menace of blanket account freezing. He noted that investigating agencies frequently freeze entire accounts on the basis of trivial or uncertain links to alleged offences, causing severe disruption to innocent businesses and individuals. He recommended that the Ministry of Home Affairs develop a uniform policy and standard operating procedures (SOPs) in consultation with States and UTs, and directed that a copy of the judgment be forwarded to MHA for this purpose.
Note to readers: Some commentaries have described this case as a definitive ruling that “police cannot order debit freezing” under Section 106. That is an overstatement — the petition was withdrawn, and the observations, while significant, are not a binding holding. The actual ruling on whether police can direct banks to freeze accounts under Section 106 BNSS was settled more definitively by the Bombay High Court.
7. Kartik Yogeshwar Chatur v. Union of India (2025 SCC OnLine Bom 4778) — Decided on 20 November 2025
This is the most comprehensive and definitive High Court ruling on the core question: can an investigating agency impose a debit freeze on a bank account under Section 106 BNSS?
The Bombay High Court — Nagpur Bench, comprising a Division Bench of Justices Anil L. Pansare and Raj D. Wakode — answered with a clear and resounding no.
Multiple petitioners had their accounts frozen during cybercrime investigations after amounts allegedly connected to fraud were credited into their accounts. In several cases, the investigating agency had issued written communications to banks. In many others — startlingly — the banks had frozen accounts without receiving even that informal instruction.
Relying on the Kerala High Court’s analysis in Headstar Global and the Supreme Court’s judgment in Shento Varghese, the Bench laid down the following:
- An investigating agency has no power to attach or debit-freeze a bank account under Section 106 of the BNSS. Section 106 authorises seizure for investigative purposes — not attachment.
- Debit freezing of accounts is not permissible under Section 106 BNSS. The investigating agency may, however, proceed under Section 107 BNSS to seek attachment from the Magistrate.
- Banks and other intermediaries are empowered only to place the disputed amount under lien — not to impose a complete debit freeze — unless there is a specific order from a competent authority to that effect.
- The Court quashed and set aside all the debit freeze orders passed by investigating agencies under Section 106 in the connected petitions, and permitted petitioners to seek compensation for wrongful freezing by filing appropriate proceedings.
This is now the clearest statement of law on this question from a High Court, and it is consistent with the Kerala and Delhi High Courts’ positions.
8. Malabar Gold and Diamond Limited v. Union of India (2026 SCC OnLine Del 297) — Decided on 16 January 2026
This Delhi High Court decision is significant both for its facts and its legal reasoning. Malabar Gold and Diamond, a well-known gold jewellery chain, had sold goods worth approximately ₹14.2 crore to a customer company. Subsequently, that customer was accused of fraud and cybercrime by third parties. There was no FIR or complaint against Malabar Gold itself.
Investigating agencies then directed two banks to freeze Malabar Gold’s accounts, treating the proceeds of legitimate gold sales as “suspected proceeds of crime.” By the time the petition was filed, over ₹80 lakh in Malabar Gold’s bank accounts had been frozen. The company said it could not pay salaries or meet daily business expenses as a result.
Justice Purushaindra Kumar Kaurav held that the freezing of Malabar Gold’s bank accounts — without any allegation of complicity, without any Magistrate’s order, and without demonstrating nexus between the company and the offence — was unjustified and illegal. He directed the accounts be defrozen forthwith, while granting liberty to investigating agencies to proceed against the company strictly in accordance with law if they found material indicating actual complicity.
Law of the Land
Reading all these cases together, a coherent and consistent picture emerges. Here is what the law, as understood by courts, actually lays down as the law of the land:
On the power to seize: Police do have the power under Section 106 BNSS to seize property — including bank accounts — where there is a direct nexus with an alleged offence. But this power is investigative and temporary. It is meant to preserve evidence, not to punish.
On mandatory reporting: Every seizure must be reported to the Magistrate having jurisdiction. The word “forthwith” means promptly and without unnecessary delay (Shento Varghese). Failure to report does not automatically vitiate the seizure, but it has consequences — the Magistrate must examine the delay, and the officer may face departmental action for deliberate or unexplained non-compliance.
On debit freezing: Police cannot impose a blanket debit freeze on a bank account using Section 106 BNSS alone. A debit freeze amounts to attachment — and attachment of property requires a Magistrate’s order under Section 107 BNSS (Kartik Yogeshwar Chatur, Headstar Global, Malabar Gold).
On proportionality: Even where freezing is legitimately ordered, it must be proportionate — only the amount actually connected to the offence may be subjected to a lien or freeze. The rest of the account balance must remain accessible to the account holder (Abdul Basith, Mohammed Saifullah).
On nexus: There must be a direct and demonstrable link between the account and the alleged offence. Indirect, incidental, or transactional connections — where fraud money simply passed through an account in a chain — are not sufficient to freeze the entire account of an innocent holder (Pawan Kumar Rai, Malabar Gold).
On banks: Banks cannot act on informal police communications — emails, phone calls, or verbal instructions. They need a lawful written order. Acting without one exposes banks to civil and potentially criminal liability (Mohammed Saifullah).
What Can You Do if Your Account is Frozen?
If your bank account has been frozen in connection with a police investigation — especially a cybercrime investigation — and you believe it has been done unlawfully or disproportionately, you have several remedies available. Here they are, in order of practical immediacy:
First: Written Representation to the Bank and the Investigating Agency. Before rushing to court, make a formal written representation to your bank asking for (a) the written order under which the freeze was imposed, (b) the name and contact details of the investigating officer who issued the direction, and (c) the specific amount that has been identified as suspected proceeds of crime. Keep copies of all correspondence. Banks are legally required to inform customers about the reason for the freeze and its expected duration, per RBI guidelines. If the bank froze your account without any formal written police order, that alone may be grounds to challenge the action.
Second: Application to the Jurisdictional Magistrate. This is often the most effective forum. File an application before the Magistrate having jurisdiction over the police station that ordered the freeze, seeking defreezing of the account, examination of whether the mandatory reporting under Section 106(3) was complied with, and a direction for return of funds or release from lien. Magistrates have supervisory jurisdiction over property seized under Section 106, and courts have repeatedly confirmed that the Magistrate’s oversight is the primary check on police seizure powers.
Third: Writ Petition under Article 226 of the Constitution before the High Court. This is appropriate where the bank freezing is clearly arbitrary — for example, where you are not an accused, where there is no nexus between your account and the offence, or where police never issued a formal order and the bank acted on its own. High Courts across India (Delhi, Bombay, Kerala, Madras) have in the past year been actively entertaining such petitions and granting relief — often within days of filing — in cases of obviously disproportionate or procedurally irregular freezing.
Fourth: Complaint to the Banking Ombudsman or the Reserve Bank of India. Where the bank froze your account without any written police order, or where it froze amounts far beyond what any order specified, you can complain to the Banking Ombudsman under the RBI’s Integrated Ombudsman Scheme. This is particularly useful for banking procedural violations and can result in compensation in appropriate cases.
Fifth: Civil or Criminal Action Against the Bank. In cases of malicious or grossly negligent freezing — particularly where a bank froze your account without any order and caused you demonstrable loss — civil proceedings for damages may be maintainable. Some courts have indicated that banks may be liable for such actions.
A practical note on the MHA SOP 2026: The Ministry of Home Affairs issued a Standard Operating Procedure in January 2026 specifically dealing with bank account freezing in cybercrime cases. This SOP emphasises proportional action (freeze only the disputed amount, not the whole account), mandates that full account freezes should be a last resort, introduces timelines for review and defreezing, and provides for the account holder’s right to be heard. If investigating agencies or banks are not following this SOP in your case, that is a relevant ground in any legal proceeding you initiate.
A Word for Practitioners
Section 106 BNSS litigation – particularly around bank account freezing – is one of the fastest-moving areas of Indian criminal procedure today. The Supreme Court has settled the basic framework (Shento Varghese), multiple High Courts have extended it consistently to cybercrime bank freezing (Kartik, Headstar, Malabar Gold), and a national SOP now exists.
When advising clients on defreezing applications, the key points to emphasise are:
- Was there a Magistrate’s order under Section 107?
- Was the Section 106(3) reporting done, and if so, when?
- Is there demonstrated nexus between the client’s account and the alleged offence?
- Is the freeze proportionate to the amount in issue?
If the answer to any of these is unfavourable to the state, the freezing is legally vulnerable.
The trend of judicial opinion is clear and consistent: Section 106 BNSS is a safeguard for investigation, not a tool for financial punishment. Courts will not permit it to become the latter.
Conclusion
The power to seize property under Section 106 BNSS is not a new power — it has existed in some form since 1882. But the digital age has given it a dimension that Parliament never anticipated: the ability of police to, with a single phone call or email to a bank, strip a family of access to their savings, freeze a business’s payroll account, or financially paralysed a company that had no involvement in any crime.
The courts have responded by insisting on something simple and old-fashioned: due process. Seize if you must, but report to the Magistrate. Freeze the disputed amount, not the whole account. Show nexus. Get a judicial order for attachment. Treat innocent account holders as innocent until proven otherwise.
Section 106 BNSS, properly applied, is a measured and constitutionally sound investigative tool. Improperly applied – as it has been in thousands of cybercrime cases – it becomes an instrument of arbitrary financial coercion. The recent wave of High Court judgments is a corrective, and a necessary one.
If your account has been frozen, you have rights. Use them.
Endnotes: Cases Cited in This Article
- State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685
- Shento Varghese v. Julfikar Husen & Ors., 2024 INSC 407; (2024) 7 SCC 23
- Pawan Kumar Rai v. Union of India, 2024 SCC OnLine Del 8936; 2024:DHC:9776
- Mohammed Saifullah v. Reserve Bank of India, 2024 SCC OnLine Mad 5604
- Abdul Basith v. Cyber, Economic & Narcotic Crime, 2025 SCC OnLine Ker 83; 2025:KER:596
- Headstar Global (P) Ltd v. State of Kerala, 2025 SCC OnLine Ker 3546
- Neelkanth Pharma Logistics (P) Ltd v. Union of India, 2025 SCC OnLine Del 1055; 2025:DHC:1214
- Kartik Yogeshwar Chatur v. Union of India, 2025 SCC OnLine Bom 4778; 2025:BHC-NAG:12612-DB
- Malabar Gold and Diamond Limited v. Union of India, 2026 SCC OnLine Del 297