The Karnataka High Court has clarified the scope of police powers to freeze bank accounts during a criminal investigation, holding that an investigating agency can impose a debit freeze under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) without first obtaining a Magistrate’s order, provided the statutory requirement of promptly informing the Magistrate is followed.
Justice M. Nagaprasanna delivered the ruling on August 10, 2026, while deciding three connected criminal petitions filed by the State of Karnataka concerning JAR Gold Retail Private Limited.
Background of the Case
The proceedings arose from Crime No. 25 of 2026 registered by Koramangala Police Station against JAR Gold Retail Private Limited under the Banning of Unregulated Deposit Schemes Act, 2019.
Following a search, the investigating agency seized gold and silver articles and also took steps affecting the company’s bank accounts. The company subsequently approached the Principal City Civil and Sessions Court, Bengaluru, seeking release of the seized property and de-freezing of its accounts.
On April 4, 2026, the Sessions Court allowed the applications. It directed release of the seized gold and silver and lifted the freeze affecting the precious metal held with Brinks India.
The State challenged those orders before the High Court.
Core Legal Issue Before the Court
The principal question was whether a debit freeze on a bank account amounts to an attachment requiring prior judicial approval under Section 107 BNSS, or whether police can act immediately under Section 106 BNSS and subsequently report the action to the Magistrate.
The company argued that freezing an account was effectively an attachment and therefore required the procedure under Section 107. The State, supported by the court-appointed amicus curiae, Angad Kamath, argued that Sections 106 and 107 operate in different fields.
Court’s Observation
Justice Nagaprasanna rejected the argument that every debit freeze must first receive judicial approval.
The Court noted that Section 106 preserves an immediate investigative power to secure property, while Section 107 deals with the judicial process concerning attachment, forfeiture and restoration of property as proceeds of crime.
The bench illustrated the practical difficulty of requiring prior judicial approval in cybercrime cases, observing that money can move through multiple accounts within seconds. The Court said the law must allow investigators to preserve such funds immediately, followed by the required report to the Magistrate.
The Court further held that treating every debit freeze as an attachment under Section 107 would effectively make Section 106 redundant. It stressed that both provisions must be given their separate fields of operation.
In a key finding, the bench stated that “debit freezing of a bank account… remains within the fold of Section 106 of the BNSS”, subject to compliance with Section 106(3).
Decision
The Karnataka High Court allowed all three criminal petitions filed by the State.
It quashed the April 4, 2026 orders passed by the Principal City Civil and Sessions Judge, Bengaluru, on I.A. Nos. I, II and III in Crime No. 25 of 2026. The interim order dated April 27, 2026 was directed to continue operating.
Pending applications were also disposed of accordingly.
Case Details
Case Title: State of Karnataka v. JAR Gold Retail Private Limited
Case Number: Criminal Petition Nos. 5929, 5930 & 5935 of 2026
Judge: Justice M. Nagaprasanna
Decision Date: August 10, 2026
