Sanjay Gupta vs. State Of West Bengal And Ors.

Held

The Court held that the Officer-in-Charge of Itanagar Police Station had no power to direct the bank to freeze the petitioner's account under Section 106 of the BNSS. The Court referred to the Bombay High Court's judgment in Mr. Kartik Yogeshwar Chatur vs. Union of India & Ors., which, relying on a Kerala High Court judgment, clarified that attachment or debit freezing of an account under Section 107 of the BNSS can only be effected upon an order from the Magistrate. Section 106 pertains to seizure for evidence, not attachment. The Court noted that neither the bank nor any respondent produced any order from a Magistrate authorizing the freezing of the account. The Court also referenced the "Citizen Financial Cyber Frauds Reporting and Management System" and its FAQ No. 21, which suggests banks can place disputed amounts on lien but not debit freeze accounts without a specific order. Therefore, the freezing of the petitioner's account on the investigating officer's instruction without a court order was deemed bad in law. The Court directed the bank to unfreeze the petitioner's account.

Facts

The petitioner, Sanjay Gupta, filed a writ application seeking to unfreeze his bank account with HDFC Bank. The bank had frozen the account based on a letter dated January 6, 2025, from the Officer-in-Charge, Itanagar Police Station, Arunachal Pradesh. Subsequently, the petitioner received a communication from the Assistant Commissioner of CGST & CX, Itanagar, stating that M/s. Siddhi Vinayak Trade Merchants had passed Input Tax Credit (ITC) amounting to Rs. 1,83,934/- to the petitioner's account. The petitioner denied any connection with M/s. Siddhi Vinayak Trade Merchants and reversed the amount. The petitioner argued that the police officer acted without authority in directing the bank to freeze his account, causing business difficulties. The bank confirmed freezing the account on the police's instruction and stated they had not received any instruction to unfreeze it.

Key Issues

1. Whether the Officer-in-Charge of Itanagar Police Station had the authority to direct the bank to freeze the petitioner's account under Section 106 of the Bharatiya Nyaya Sanhita (BNSS) without a court order? 2. Whether the bank was justified in freezing the petitioner's account solely on the instruction of the investigating officer? Petitioner's Arguments: The petitioner contended that the Officer-in-Charge of Itanagar Police Station acted without authority in directing the bank to freeze his account. He relied on the unreported judgment in Mukesh vs. State of Rajasthan & Ors. (Rajasthan High Court), where a similar account freeze was directed to be defreezed by keeping the disputed amount aside. Revenue/State's Arguments: The respondent bank argued that it acted upon the instruction from the Officer-in-Charge, Itanagar Police Station, and had not received any further instructions to defreeze the account. The judgment does not record specific arguments from the State or CGST authorities beyond what was communicated to the petitioner.