Bank Account Freezing in Cyber Crime Investigations: Allahabad High Court Sets Out Crucial Principles Under BNSS 2023

Overview of the Case

In Khalsa Medical Store Vs Reserve Bank of India, the Allahabad High Court was called upon to adjudicate a writ petition arising out of the complete freezing of the petitioner's bank account. The freeze had been imposed pursuant to a notice issued under Section 94 and Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) by an Investigating Officer attached to the Cyber Crime Police Station, Rachakonda, Hyderabad, in connection with an ongoing cyber crime investigation.

The case brought into sharp focus a growing and deeply concerning trend: law enforcement agencies across the country issuing blanket debit freeze instructions to banks without adhering to any legally prescribed procedure, thereby causing serious prejudice to innocent account holders, including small businesses and individual assessees.

Background and Procedural History

Despite multiple notices being served upon the Investigating Officer of the Cyber Crime Police Station, Rachakonda, Hyderabad, no representative appeared before the Court on behalf of the investigating agency. This persistent non-appearance itself signalled the casual and unaccountable manner in which such freezing notices were being issued.

Axis Bank, the respondent bank in this matter, through its counsel, candidly disclosed to the Court that:

  • It had received a notice dated November 21, 2025, directing it to impose a debit freeze on the petitioner's account under Section 94/106 of the BNSS, 2023.
  • No seizure order had been furnished along with or subsequent to the said notice.
  • No copy of the FIR had been supplied.
  • No indication of the specific amount on which a lien was required had been communicated.
  • Despite the bank writing multiple letters to the Investigating Officer seeking the necessary documentation, it received no response whatsoever.

The notice issued by the Investigating Officer directed the bank to freeze Account No. 917030037515043 (IFSC: UTIB0000291) in connection with Crime No. 520/2025, registered at Cyber Crime Police Station, Rachakonda, Hyderabad, Telangana, on the allegation that the said account was being used for fraudulent transfers from a victim's account.

Statutory Framework: Sections 94 and 106 of the BNSS, 2023

The Court set out the relevant provisions that formed the backbone of the investigating agency's action.

Section 106 of BNSS, 2023

"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..."

Section 94 of BNSS, 2023

"94. (1) Whenever any Court or any officer in charge of a police station considers that the production of any document, electronic communication, including communication devices which is likely to contain digital evidence or other thing is necessary or desirable for the purposes of any investigation, inquiry, trial or other proceeding under this Sanhita by or before such Court or officer, such Court or officer may, by a written order, either in physical form or in electronic form, require the person in whose possession or power such document or thing is believed to be, to attend and produce it, or to produce it, at the time and place stated in the summons or order..."