The power to seize any property vested in the police officer by law has been given a wide interpretation by the Supreme Court in a catena of decisions, most notably in the case of State of Maharashtra v. Tapas D. Neogy reported in [(1999) 7 SCC 685] wherein it was held that a bank account can be held to be a property vis-à-vis the power of seizure of police officer under the law of criminal procedure. Relevant para of the judgment is reproduced below:
“12. Having considered the divergent views taken by different High Courts with regard to the power of seizure under Section 102 of the Code of Criminal Procedure, and whether the bank account can be held to be “property” within the meaning of the said Section 102(1), we see no justification to give any narrow interpretation to the provisions of the Criminal Procedure Code. It is well known that corruption in public offices has become so rampant that it has become difficult to cope up with the same. Then again the time consumed by the courts in concluding the trials is another factor which should be borne in mind in interpreting the provisions of Section 102 of the Criminal Procedure Code and the underlying object engrafted therein, inasmuch as if there can be no order of seizure of the bank account of the accused then the entire money deposited in a bank which is ultimately held in the trial to be the outcome of the illegal gratification, could be withdrawn by the accused and the courts would be powerless to get the said money which has any direct link with the commission of the offence committed by the accused as a public officer. We are, therefore, persuaded to take the view that the bank account of the accused or any of his relations is “property” within the meaning of Section 102 of the Criminal Procedure Code and a police officer in course of investigation can seize or prohibit the operation of the said account if such assets have direct links with the commission of the offence for which the police officer is investigating into. The contrary view expressed by the Karnataka, Gauhati and Allahabad High Courts, does not represent the correct law. It may also be seen that under the Prevention of Corruption Act, 1988, in the matter of imposition of fine under sub-section (2) of Section 13, the legislatures have provided that the courts in fixing the amount of fine shall take into consideration the amount or the value of the property which the accused person has obtained by committing the offence or where the conviction is for an offence referred to in clause (e) of sub-section (1) of Section 13, the pecuniary resources or property for which the accused person is unable to account satisfactorily. The interpretation given by us in respect of the power of seizure under Section 102 of the Criminal Procedure Code is in accordance with the intention of the legislature engrafted in Section 16 of the Prevention of Corruption Act referred to above. In the aforesaid premises, we have no hesitation to come to the conclusion that the High Court of Bombay committed error in holding that the police officer could not have seized the bank account or could not have issued any direction to the bank officer, prohibiting the account of the accused from being operated upon. Though we have laid down the law, but so far as the present case is concerned, the order impugned has already been given effect to and the accused has been operating his account, and so, we do not interfere with the same.”
The power to seize a bank account, often called freezing a bank account, flows from Section 106 of the Bhartiya Nagarik Suraksha Sanhita 2023 (earlier Section 102 of the Criminal Procedure Code, 1973). In order to freeze a bank account in case of cybercrime, a notice is issued by the Police Officer to the concerned bank for necessary action.
Section 106 of the Bhartiya Nagarik Suraksha Sanhita 2023 is being reproduced below:
106. (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 503 and 504 shall, as nearly as may be practicable, apply to the net proceeds of such sale.
Recently, with the internet revolution and the significant increase in usage and reliance on the internet for abound activities, including financial, social, political, and more, there has also been an equally significant increase and development of crimes in the cyber world, hence, the increased incidences of invoking powers under Section 106 of the BNSS.
However, with increased incidences, the misuse of the said power can equally damage legitimate account holders, which may curb their liberty. Hence, the Hon’ble Allahabad High Court has interpreted the provisions of law and has laid down certain principles to be applied while exercising the powers under Section 106 of the Bhartiya Nagarik Suraksha Sanhita 2023. These principles are as follows:
- Section 106 of BNSS should not be interpreted to empower police officers to intervene in money disputes by seizing property especially based on mere suspicion but it must be bolstered by reasonable belief.
- Information for freezing the bank account by the investigating officer shall be sent immediately to the nodal officer of the bank of the beneficiary or payment service system, including the payment aggregator, so as to take action at their end. The police officer must furnish information with relation to the alleged crime and should accompany a copy of the FIR or information received. The bank or the payment system operator (PSO) may decline a request, if it is received without a copy of any complaint or FIR.
- The notice under Section 106 of the BNSS may require to mark lien on a specific amount (money allegedly transferred from or to the bank account of accused), but in no case the police may ask or request any bank or payment system operator (PSO) including payment aggregator, to block or suspend entire financial account.
- As soon as information to block or put on hold or marking of a lien is forwarded to a bank or any financial intermediary, including a payment system operator (PSO), then the information shall simultaneously be sent to the jurisdictional Judicial Magistrate within 24 hours. Failure to inform may render such an action as void.
- If any bank puts on hold any bank account or escrow account maintained by any entity / citizen on the request of the police without following the proper procedure, then the bank shall be personally liable for the Civil and Criminal consequences for the loss including financial and reputational damage of such entity / citizen.
The Hon’ble Allahabad High Court has held in another case that Cyber Crime Divisions must provide details of the crime for which the freezing of the bank account is being done, and furthermore, it must also indicate the amount for which such a lien is required to be created, as a blanket notice is clearly illegal and arbitrary without any indication of the amount on which the lien is sought.
The Hon’ble Allahabad High Court, armed with its extraordinary jurisdiction under Article 226 of the Constitution of India, has quashed notices in plethora of cases where such notices fail to fall within the ambit of the principles laid down by it or the Police Officer acts contrary to the law laid down by this Hon’ble Court, and the Court has further directed in such cases to defreeze the account allowing the bank account holder to carry normal banking activities.