A Delhi court has ordered the defreezing of bank accounts of an accused in a CBI case, holding that mere suspicion or labelling funds as “proceeds of crime” without a demonstrable link to the alleged offence is insufficient in law.
The order was passed by the Court of Ms. Neetu Nagar, Additional Chief Metropolitan Magistrate, Rouse Avenue District Court. The prosecution case was that a large illegal call centre network was operating from India and targeting US citizens through impersonation and tech-support fraud, causing alleged losses of about USD 40 million. According to the CBI, the applicant was one of the recipients of the alleged proceeds of crime and his accounts, along with related documents recovered during search reflected deposits of around Rs. 10 crores which the agency claimed justified for freezing under Section 106 BNSS.
The Court emphasised that the statutory requirement under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) (earlier Section 102 CrPC) mandates a direct or proximate nexus between the property seized and the alleged offence. In the present case, it found that such a link was absent.
Significantly, the Court noted that the investigating officer had failed to establish any connecting trail between the bank entries and the alleged crime, despite the investigation beiang ongoing. It observed that simply stating that the accused could not justify large transactions vis-à-vis his known sources of income cannot, by itself, render such funds “proceeds of crime.”
The Court also referred to its earlier observations in the bail order, where it had already held that bank deposits cannot be treated as incriminating in the absence of connecting evidence.
Rejecting the CBI’s stand, the Court held that blanket freezing of accounts without verification of transactions or quantification of the alleged defrauded amount violates mandatory legal requirements. It further stressed that the power to freeze bank accounts cannot be exercised mechanically and must be supported by concrete material linking the funds to the offence.
At the same time, the Court acknowledged the investigating agency’s concern that funds may be dissipated. To balance competing interests, it held that such apprehensions can be addressed through appropriate safeguards rather than continued freezing.
Accordingly, the Court directed that the bank accounts be defreezed, subject to the condition that the accused furnishes a personal bond equivalent to the amount lying in the accounts, along with an undertaking to produce the funds as and when directed during trial.
The Court clarified that the order would not preclude the investigating agency from taking recourse to appropriate legal remedies, including action under Section 107 BNSS, if warranted.
Appearances:
Ms. Priya Gaur, Ld. PP for CBI.
Sh. Arjun Syal and Sh. Naman Verma, Ld. Counsel for the applicant.