Court Upholds Legal Procedure Under BNSS 2023, Emphasizes Judicial Oversight in Freezing Bank Accounts
In a landmark judgment, the Chhattisgarh High Court, comprising Chief Justice Mr. Ramesh Sinha and Justice Ravindra Kumar Agrawal, quashed the arbitrary freezing of a bank account held by Oxyzo Financial Services Ltd. The case highlighted significant procedural lapses by the police authorities in freezing the account without adhering to the mandates of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
The petitioner, a Non-Banking Financial Company (NBFC), sought relief against the freezing of its bank account by the police, which had put a hold on Rs. 53,47,17,835/- without following due process. The court found that the police failed to obtain necessary approvals and judicial oversight as required under Section 107 of BNSS, 2023, which mandates prior approval from the Superintendent of Police and a Magistrate's order for attachment.
The issue arose when Shreejikrupa Project Ltd., involved in a commercial loan transaction with Oxyzo, lodged a report of alleged cheating due to underweight supplies of iron bars. In response, the police froze the account of Oxyzo Financial Services without prior notice, severely impacting the company's financial operations.
The court emphasized the distinction between seizure under Section 106, meant for securing evidence, and attachment under Section 107, intended to secure proceeds of crime, both under BNSS, 2023. It criticized the police for acting arbitrarily without quantifying the actual loss and without proper legal basis, thus violating the right to property under Article 300-A of the Constitution.
The High Court's decision aligns with precedents set by the Bombay and Kerala High Courts, emphasizing that freezing bank accounts without judicial process violates fundamental rights and due process of law. The judgment reinforces the need for police authorities to adhere strictly to legal procedures, ensuring fair and impartial investigations.
Bottom line:-
Provisions under Sections 106 and 107 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) regarding freezing and attachment of property-Police authorities cannot freeze a bank account or put an amount on hold without adhering to the statutory procedure under Section 107 of BNSS, which mandates prior approval and judicial oversight.
Statutory provision(s): Sections 106, 107 of Bharatiya Nagarik Suraksha Sanhita, 2023, Article 300A of the Constitution of India.
