Karnataka High Court: Police can freeze bank accounts without court order

The Karnataka High Court has ruled that police do not require prior court permission to freeze a bank account during an investigation. The decision, issued by Justice M. Nagaprasanna on August 10, designates a debit freeze as a preservative measure under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

However, the police officer must report the action "forthwith" to the jurisdictional magistrate as mandated by Section 106(3) of the BNSS. This practice is crucial for India's cybercrime enforcement, where speed is vital to prevent fraud and trace financial flows through multiple accounts rapidly. The judgment provides a clear legal framework and sequence: freeze first, then face judicial scrutiny.

The case originated when Bengaluru police registered a case against Jar Gold Retail Private Limited for alleged involvement in unregulated deposit schemes. The company's bank accounts were frozen as part of the investigation. The company challenged the FIR and the account freeze, but their petitions were dismissed by the High Court and subsequently the Supreme Court declined to entertain a further challenge.

The High Court clarified that freezing a bank account is a preservative measure and does not, by itself, constitute an attachment under Section 107, which requires judicial oversight. Justice Nagaprasanna emphasized the rapid nature of cybercrime, where funds can move through numerous accounts within seconds. The court stated that the law cannot require police to undertake a lengthy judicial process while proceeds of crime are digitally transferred, potentially disappearing beyond retrieval.