Bank's Action Declared Impermissible Without Court Order Under Bharatiya Nagarik Suraksha Sanhita, 2023
In a landmark judgment delivered on May 6, 2026, the Calcutta High Court directed the immediate defreezing of bank accounts belonging to Xenixt Technologies Private Limited, which had been frozen based on a complaint received through the Ministry of Home Affairs portal. The judgment, passed by Justice Krishna Rao, emphasized the impermissibility of freezing bank accounts without a court order under the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
The petitioners, Xenixt Technologies Private Limited, approached the court with a writ application after their accounts were unexpectedly frozen on October 9, 2024. The accounts affected were numbered 121527000000041, 121527000000011, 121527000000031, 121527000000021, and 121527000000061. The legal representatives for Xenixt Technologies argued that the freezing action violated statutory provisions, as it was done without a court order or any legal authority, causing significant operational difficulties for the company.
The bank, in its defense, claimed that the action was taken following a complaint received through the Ministry of Home Affairs portal. However, the court found no evidence of any court order authorizing the freezing of accounts and highlighted that the bank's actions were solely based on the portal complaint without adhering to the legal procedures outlined in BNSS.
Justice Krishna Rao referenced previous judgments from various High Courts, including the Kerala and Bombay High Courts, which had underscored the necessity of obtaining a court order for such actions. The court reiterated that under Section 106 of the BNSS, seizure of property for securing evidence during investigation can be conducted by a police officer with an ex post facto report submitted to the Magistrate. In contrast, Section 107 mandates that attachment, forfeiture, and restoration require a Magistrate's order.
The ruling reinforces the legal safeguards in place to prevent arbitrary freezing of bank accounts and ensures adherence to due process. The court directed the bank to defreeze Xenixt Technologies' accounts immediately and allow their operation, marking a significant precedent in safeguarding citizens' rights under the new statutory provisions.
Legal experts hailed the judgment as a pivotal reinforcement of procedural compliance, highlighting the importance of judicial oversight in matters involving financial restrictions.
Bottom line:-
Freezing of bank accounts without an order from the Court is impermissible under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). Banks must obtain an order from the Magistrate for such action, ensuring adherence to the legal process.
Statutory provision(s): Section 106, Section 107 of Bharatiya Nagarik Suraksha Sanhita, 2023
