Khalsa Medical Store Vs Reserve Bank of India (Allahabad High Court)
The Allahabad High Court considered a writ petition concerning the freezing of the petitioner’s bank account pursuant to a notice issued under Sections 94 and 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) in connection with a cyber crime investigation. The Investigating Officer of the Cyber Crime Police Station, Rachakonda, Hyderabad, did not appear before the Court despite repeated notices. Axis Bank submitted that it had received only a notice directing it to impose a debit freeze on the petitioner’s account but had not received any seizure order, copy of the FIR, or indication of the amount on which lien was required. The bank also informed the Court that it had written several letters to the Investigating Officer seeking the necessary documents but had received no response.
The Court examined Sections 94 and 106 of the BNSS and referred to several judicial precedents. It noted the Supreme Court’s decision in State of Maharashtra v. Tapas D. Neogy, which held that a bank account constitutes “property” and may be seized or its operation prohibited during an investigation if it has a direct link with the alleged offence. It also referred to Teesta Atul Setalvad v. State of Gujarat, where the Supreme Court held that prior notice to the account holder is not required before freezing a bank account, although a report must subsequently be submitted to the jurisdictional Magistrate. The Court further noted the observations in Nevada Properties (P) Ltd. v. State of Maharashtra that seizure should not be based on mere suspicion but should be supported by reasonable belief.
