In recent months, a growing number of bank accounts have been frozen by cybercrime investigators, often during fraud investigations when money suspected to be connected with cyber offences flows through those accounts. This practice — typically done under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 — has sparked debate, multiple court rulings and legal scrutiny over whether investigators may freeze accounts without judicial oversight or procedural safeguards.
What Section 106 BNSS Actually Allows
Under the BNSS, Section 106 is the successor to the earlier Section 102 of the Code of Criminal Procedure (CrPC) and allows police or investigating agencies to seize property — including assets and any “property” suspected to be stolen or involved in an offence — for the purpose of preserving evidence.
However, the law does not explicitly grant an unfettered power to “freeze” or “debit-freeze” a bank account — which means making the entire account inaccessible. Instead, seizure under Section 106 is meant to preserve evidence properly, subject to reporting requirements and statutory safeguards.
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Judicial Pushback: High Courts Limit Account Freezes
Several high courts have recently clarified what Section 106 cannot be used for:
🔹 Bombay High Court — In multiple rulings, including Kartik Yogeshwar Chatur v. Union of India, the court held that investigating agencies do not have the power to debit-freeze or attach a bank account under Section 106 BNSS, and that the law only permits seizure of property for evidentiary purposes, not freezing of accounts. Only specific amounts truly connected to disputed transactions may be placed on lien while leaving the rest accessible.
🔹 Allahabad High Court — The court quashed a blanket bank account freeze imposed by a cyber-crime unit, ruling that such freezing without specifying the exact amount in dispute or following statutory procedure is illegal and arbitrary. Investigators must indicate the amount on which lien is being sought and inform the jurisdictional Magistrate within 24 hours of issuing a freeze notice.
🔹 Delhi High Court — In a recent 2026 decision, the Delhi High Court held that police cannot freeze or attach bank accounts without prior judicial sanction and emphasized that Section 106 alone cannot justify freezing for purposes other than preserving evidence. For attachment of proceeds of crime, Section 107 BNSS with a Magistrate order must be followed.
These rulings reflect a broad judicial consensus that freezing an entire bank account solely under Section 106 BNSS is not permitted, and that doing so without procedural safeguards violates statutory rules and constitutional protections like the right to livelihood and economic freedom.
Lien vs Full Freeze: Key Legal Difference
It’s important to understand the distinction:
✔️ Lien on a specific amount — Only the disputed sum allegedly linked to an offence may be restrained or blocked from withdrawal. The account holder can still use the remaining balance.
❌ Full freeze (debit freeze) — Making the entire account inaccessible — including funds not connected to any alleged offence — has no clear legal backing under Section 106 BNSS and has been struck down by courts as arbitrary.
In many recent cases, courts have ordered banks to immediately de-freeze accounts, often restoring access to ordinary funds while retaining restrictions only on the disputed amount.
Why This Matters for Ordinary Citizens
Freezing a bank account — even temporarily — can have severe consequences:
- Individuals and businesses lose access to their livelihood and cash flow.
- Salaries cannot be paid and business operations can grind to a halt.
- Small businesses, traders, and daily-wage earners may face severe hardship despite not being suspects in any crime.
Legal experts and citizen advocates have raised constitutional concerns, arguing that mass freezes without notice or judicial oversight undermine the fundamental legal principle of “innocent until proven guilty” and can amount to a form of pre-trial punishment.
What Courts Say Investigators Must Do
Based on recent High Court guidelines:
✔️ Freeze requests must specify the disputed amount linked to the alleged offence.
✔️ Notices must be accompanied by a copy of the FIR or complaint.
✔️ Investigators must inform the jurisdictional Magistrate shortly after issuing a freeze request.
✔️ Blanket freezes of full accounts without amount specification are illegal and arbitrary.
The courts recognise that police should have some power to preserve evidence, but they insist such powers must be exercised with judicial oversight and strict adherence to statutory procedure — not through unilateral directions on banks without due process.
Legal Remedies for Affected Account Holders
Accounts frozen without following lawfully mandated procedures can be challenged in court through writ petitions or civil suits, asking for:
- Immediate de-freezing of the account,
- Restriction of the freeze only to disputed amounts, and
- Compensation for losses due to unlawful freezes.
Courts increasingly recognise that procedural fairness, notice and judicial supervision are essential safeguards in balancing investigative needs with citizen rights.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
