Freezing Bank Accounts Under Section 102 CrPC Requires Direct Nexus Between Deposits and Alleged Proceeds of Crime

The Petitioner, a transport business owner, was accused of extorting money from a supervisor (Opposite Party No. 2) under Sections 341/294/386/506 of the IPC.

During the investigation, the Investigating Officer (I.O.) froze the Petitioner’s HDFC Bank account under Section 102 Cr.P.C., asserting that a deposit of ₹1,90,000 made between January and October 2023 "might have been" extorted funds.

Lower courts (JMFC and Sessions Judge) rejected the Petitioner’s applications to de-freeze the account, citing the Petitioner’s criminal antecedents (10 prior cases) and the need to protect the victim's interest.

The Petitioner challenged these orders, arguing that there was no nexus between the alleged crime and the bank account since the prosecution admitted all alleged extortion payments were made in cash, not through bank transfers.

1. Whether the freezing of a bank account under Section 102 Cr.P.C. (Section 106 BNSS) requires a demonstrable nexus between the property and the alleged offence.

2. Whether the freezing of an entire account based on "speculative suspicion" and criminal antecedents, despite the absence of digital transaction trails, is legally sustainable.

The Court applied Section 102 of the Cr.P.C. (corresponding to Section 106 of the BNSS), which allows the seizure of property "suspected to have been stolen" or "found under circumstances creating suspicion of commission of an offence".

Precedents such as State of Maharashtra v. Tapas D. Neogy, which includes bank accounts within the definition of "property" under Section 102.

Teesta Atul Setalvad v. State of Gujarat regarding the scope of investigative seizure.

The court emphasized that such power must satisfy the constitutional requirements of proportionality under Articles 14, 21, and 300-A.

The Court reasoned that while Section 102 Cr.P.C. is an investigatory tool, it is not punitive and must not be exercised mechanically.

In this case, the prosecution's admission that the alleged extortion money was paid in cash—and the total lack of evidence showing any NEFT, UPI, or RTGS transfers from the informant to the Petitioner—severed the "live link" or nexus required for seizure.

The Court found the I.O.’s action was based on mere "conjectural inference" that deposits from the Petitioner's transport business were proceeds of crime.

Furthermore, while the State highlighted 10 criminal antecedents, the Court held that prior cases cannot substitute for specific proof of a link between the current offence and the current property.

Because the investigation was complete (charge-sheet filed) and the freezing paralyzed the Petitioner’s travel agency operations, the court found the measure disproportionate and a violation of the right to property under Article 300-A.

The Court allowed the CRLMC, quashed the orders of the lower courts, and ordered the de-freezing of the Petitioner’s HDFC Bank account, concluding that suspicion, however grave, cannot replace the legal requirement for objective material evidence in seizure proceedings.