Indefinite Freezing of Bank Accounts Without Charge-Sheet in Vigilance Cases Violates Constitutional Protections

The Petitioner is the wife of Dr. B. Gopal Chandra Rao, a Medical Officer accused of possessing disproportionate assets (DA) following a vigilance trap in 2017.

On 19.11.2017, the Vigilance Department searched the Petitioner’s residence and subsequently froze ten of her bank accounts under Section 102 of the Cr.P.C.

The agency alleged the Petitioner abetted her husband by holding assets worth Rs. 32,64,722/- without known sources of income.

The Petitioner filed an application under Section 457 Cr.P.C. for de-freezing, which was rejected by the Special Judge, Vigilance, Berhampur on 10.03.2025.

As of the hearing date, over seven years had elapsed since the seizure without a charge-sheet being filed.

Section 102 of the Cr.P.C. (corresponding to Section 106 of the BNSS, 2023), which empowers police to seize property suspected to be linked to an offence.

The court relied on State of Maharashtra v. Tapas D. Neogy, establishing that bank accounts are "property" under Section 102.

Teesta Atul Setalvad v. State of Gujarat, confirming that accounts of relatives can be frozen if suspected to be linked to the crime.

The court further applied the recent precedent in State of West Bengal v. Anil Kumar Dey (2025), which clarified that Section 102 Cr.P.C. and Section 18A of the P.C. Act are not mutually exclusive and operate independently.

Constitutional protections under Articles 21 (Right to Livelihood) and 300-A (Right to Property) were also invoked to limit indefinite seizures.

The Court acknowledged that while the initial freezing of accounts was a valid exercise of investigative power under Section 102 Cr.P.C., its continuation for seven years without a charge-sheet transformed a "facilitative" tool into a "de facto penalty".

The Court distinguished between "temporary seizure" for investigation and "long-term confiscation" requiring the safeguards of Section 18A.

It reasoned that since the investigation had outlived its statutory purpose of "aiding" an ongoing inquiry, the absolute freeze imposed a disproportionate burden on the Petitioner’s right to life and property.

While the Court rejected the Petitioner’s plea that Income Tax Returns prove the legality of the source, it held that the investigative delay necessitated a "middle course" to balance the State's interest in recovering DA and the individual's right to access funds.

Alternatively, the Petitioner may unconditionally de-freeze the accounts by providing property security equivalent to the frozen amount.

The Vigilance Department must file a charge-sheet within six months, failing which the Petitioner may move for unconditional de-freezing.

The CRLMC was disposed of accordingly.