Case Note & Summary
The matter arose from two criminal writ petitions filed by Smartpaddle Technology Private Ltd. (trading as 'Bizongo') before the Bombay High Court, Aurangabad Bench, challenging police notices that placed a lien on its bank accounts. The company operated a TradeCred platform for invoice discounting, and an FIR was registered by an investor, Charushila Patil, alleging non-refund of an investment of Rs. 48,94,172. Pursuant to this FIR, the Economic Offences Wing, Chhatrapati Sambhajinagar, issued a notice dated 06.03.2026 under Section 94 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) to HDFC Bank, directing a lien of Rs. 15 Crore on the petitioner's account. A second notice dated 04.05.2026 under Section 168 BNSS was issued to YES Bank, creating a lien of Rs. 11,87,23,145. The petitioner contended that Section 94 BNSS only permits production of documents and does not authorize freezing of accounts; similarly, Section 168 BNSS does not empower creation of a lien. It argued that the proper procedure for seizure/attachment is under Sections 106 and 107 BNSS, which mandates compliance with statutory safeguards and an order from a Magistrate, none of which was followed. The freezing was also challenged as disproportionate and violative of Articles 14 and 19(1)(g) of the Constitution. The State, through the investigating officers, defended the actions, stating that the initial notice contained a typing error and that Section 168 BNSS was correctly invoked to prevent further siphoning, given that the total fraud amount exceeded Rs. 69 Crore and the petitioner had not cooperated. Several intervenors, including investors, alleged systematic fraud and submitted that the petitioner was directly liable as an obligor. The court heard the arguments and reserved judgment, but the provided text does not include the final decision or ratio.
Headnote
A) Criminal Procedure - Police Power to Freeze Accounts - Section 94 BNSS Scope - Bharatiya Nagarik Suraksha Sanhita, 2023, Section 94 - Notice dated 06.03.2026 issued under Section 94 BNSS directing bank to place lien of Rs. 15 Crore on petitioner's account was challenged as Section 94 only relates to production of documents and does not empower freezing or creation of lien - Respondents admitted incorrect section was cited and subsequently issued notice under Section 168 (Paras 2-3,5). B) Criminal Procedure - Police Power to Freeze Accounts - Section 168 BNSS Scope - Bharatiya Nagarik Suraksha Sanhita, 2023, Section 168 - Second notice dated 04.05.2026 under Section 168 BNSS also challenged as Section 168 does not authorize freezing of bank accounts or creation of lien - Statutory scheme for seizure/attachment of property involved in crime is under Sections 106 and 107 BNSS which require compliance with defined safeguards and recourse to a Magistrate, bypassed by police (Paras 5-6). C) Constitutional Law - Disproportionate State Action - Article 14 and 19(1)(g) Violation - Constitution of India, Articles 14, 19(1)(g) - Petitioner argued that freezing of Rs. 15 Crore for an alleged fraud of Rs. 48.94 lakhs is disproportionate, with no nexus shown, and action taken without notice or hearing violates fundamental rights (Paras 6-7). D) Criminal Procedure - Preventive Action During Investigation - Section 168 BNSS Applicability - Bharatiya Nagarik Suraksha Sanhita, 2023, Section 168 - Respondents contended action under Section 168 was necessary to prevent further siphoning of funds as total scam amount exceeded Rs. 69 Crore and petitioner did not cooperate with investigation under Section 35(3) BNSS (Paras 7-9).
Issue of Consideration
Whether police have the power under Sections 94 and 168 of BNSS to freeze bank accounts and create liens without following the procedure under Sections 106 and 107 BNSS and without taking recourse to the Magistrate
Law Points
- Section 94 BNSS only for production of documents
- Section 168 BNSS does not authorize freezing of bank accounts or creation of lien
- seizure/attachment of property must follow procedure under Sections 106-107 BNSS with defined safeguards and recourse to a Magistrate
- police cannot bypass statutory safeguards
- disproportionate freezing violates Articles 14 and 19(1)(g) of the Constitution
