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The High Court of Delhi, by its order dated 16.01.2026, in the matter of Malabar Gold and Diamond Limited & Ors. v. Union of India & Ors.1, held that investigating agencies do not have power under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 ("BNSS") to debit-freeze or attach bank accounts. The court held that freezing or attachment of bank accounts can be carried out only under Section 107 of the BNSS, pursuant to an order of a competent Magistrate, after following the procedure.
Malabar Gold and Diamond Limited ("MGDL") and its group entities were constrained to approach the High Court of Delhi after their bank accounts were placed on debit freeze pursuant to a communication issued by the police in connection with a cyber-fraud investigation involving third-party transactions.
The court examined the provisions of Sections 106 and 107 of BNSS and held that Section 106 of BNSS permits seizure of property for evidentiary purposes only and does not authorise attachment or debit-freezing of bank accounts. Attachment or freezing of bank accounts to secure alleged proceeds of crime must be undertaken only under Section 107 of the BNSS, and only pursuant to an order of the jurisdictional Magistrate. Further, freezing of accounts of persons who are neither accused nor suspects, without judicial authorisation, is impermissible, as it is manifestly arbitrary and violate the fundamental rights as enshrined under Articles 19(1)(g) and 21 of the Constitution of India, 1950, considering the fact that no First Information Report ("FIR") or criminal proceedings existed and no notice had been issued. Accordingly, since no material had been placed to show complicity of MGDL in the alleged fraud, the court directed defreezing of the bank accounts.
Footnote
1 W.P.(C) 4198/2025 & CM APPL. 19454/2025.
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