'Money Flies' In Cybercrimes; Police Need Not Obtain Prior Magistrate Approval To Freeze Bank Account During Probe: Karnataka High Court

The Karnataka High Court has held that police do not need to obtain prior approval from a Magistrate to debit-freeze a bank account during investigation, where the freeze is imposed as an investigative and preservative measure under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. [2026 LiveLaw (Kar) 287]Justice M. Nagaprasanna held that such a debit freeze does not become an “attachment” under Section 107 merely because it restricts operation of the bank account. Section 107 deals with attachment, forfeiture and restoration of property and requires judicial intervention, but prior judicial approval is not required for an investigative debit freeze under Section 106, the Court clarified.The Court made the observations while allowing three criminal petitions filed by the State and setting aside orders passed by the Principal City Civil and Sessions Judge, Bengaluru, which had directed the release of seized gold and silver articles and de-freezing of bank accounts of JAR Gold Retail Private Limited in a case under the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019.Explaining why the police must have the ability to act swiftly during a cybercrime investigation, the Court observed that money can move through multiple accounts within seconds.“In such crimes, money does not merely move; it flies—from one account to another, through a labyrinth of mule accounts, often in a matter of seconds.”The Court noted that cybercrime enables criminals to transfer money with “speed, anonymity and geographical indifference”, and that a victim's savings could disappear “at the click of a mouse or the stroke of a key.”The Court illustrated the point by considering a situation where a person loses ₹50 lakh in an online fraud and immediately approaches the cybercrime authorities. It observed that the identified account would have to be frozen within seconds, or at the highest within minutes, if the victim's money is to be preserved.The Court said that insisting on prior judicial approval in every such case could defeat the purpose of the investigative power.“By the time this procedural journey reaches its destination, the money may have travelled through ten accounts, crossed several jurisdictions, been converted into another form, or simply vanished beyond retrieval,” it remarked.The Court further clarified that Sections 106 and 107 BNSS are not competing provisions but operate in distinct statutory fields.Section 106, which corresponds to Section 102 of the erstwhile CrPC, empowers the police to seize property suspected to be stolen or connected with an offence and requires the seizure to be forthwith reported to the jurisdictional Magistrate under Section 106(3). Section 107, on the other hand, deals with attachment, forfeiture or restoration of property and provides for judicial consideration of an application for attachment. The Court held, “Debit freezing of a bank account, when resorted to as an investigative and preservative measure, remains within the fold of Section 106 of the BNSS, subject to scrupulous compliance with the mandate of sub-section (3) thereof.”It added, “It does not, merely by reason of being a debit freeze, metamorphose into an attachment under Section 107 requiring prior judicial imprimatur.” The Court, while making the above observations, underscored that when Parliament re-enacts a provision in substantially the same language, against the backdrop of authoritative judicial exposition, 'the interpretation that had attached itself to the predecessor provision travels with the provision into its new statutory home.'“…It cannot be lost sight of that nations across the globe, and India in particular, are today grappling with an unprecedented proliferation of cybercrime. Technology has bestowed upon mankind extraordinary convenience; it has, at the same time, placed in the hands of the unscrupulous an equally extraordinary ability to commit crime with speed, anonymity and geographical indifference. A naïve and gullible citizen may see his life's savings disappear at the click of a mouse or the stroke of a key. In such crimes, money does not merely move; it flies-from one account to another, through a labyrinth of mule accounts, often in a matter of seconds….”, the court pointed out, highlighting the necessity of sudden action under Section 106 BNSS.The Court noted that several High Courts, following the Kerala High Court's decision in Headstar Global Private Limited v. State of Kerala, had taken a contrary view. However, Justice Nagaprasanna distinguished those decisions and went on to note as below:“…HEADSTAR GLOBAL PRIVATE LIMITED being only of a persuasive value, it would not bind this Court to follow it... as it runs counter to the mandate of the statute and the interpretation of a bank account to be a property and that the bank account being a property could be debit frozen as held by the Apex Court…”, the court underscored.The Court placed reliance on the coordinate...

'Money Flies' In Cybercrimes; Police Need Not Obtain Prior Magistrate Approval To Freeze Bank Account During Probe: Karnataka High Court

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'Money Flies' In Cybercrimes; Police Need Not Obtain Prior Magistrate Approval To Freeze Bank Account During Probe: Karnataka High Court

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