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Bank accounts are frequently frozen during investigations and criminal proceedings — by the police under the CrPC, by the NCB or other agencies under the NDPS Act, or by the Enforcement Directorate under PMLA. A frozen account can bring an individual's or a business's financial operations to a complete halt. Aggarwal and Associates takes up de-freeze matters urgently and represents clients before the appropriate court or authority to secure the release of frozen funds at the earliest.
Section 102 CrPC (Section 106 BNSS) — A police officer may seize any property — including funds in a bank account — found in suspicious circumstances or alleged to be connected with a cognizable offence. NDPS Act — Chapter VA — The Competent Authority may order the freezing of a bank account as part of forfeiture proceedings where the account balance is alleged to be proceeds of drug trafficking. PMLA (Prevention of Money Laundering Act) — The Enforcement Directorate may provisionally attach bank accounts under Section 5 of PMLA in connection with a scheduled offence including NDPS Act offences. Directions by courts — A court trying a criminal matter may direct the freezing of accounts as a condition of bail or as part of interim directions in forfeiture proceedings.Section 102 CrPC gives the police a broad power but this power is not unlimited. The Supreme Court has held that:
The police must report the seizure to the Magistrate as soon as possible. The Magistrate must then pass an order regarding the seized property — either for continued freezing or for its return. The account cannot be frozen indefinitely without a court order. Amounts in the account that have no nexus to the alleged offence should not be frozen.We file applications before the Magistrate or Sessions Court to challenge the legality of the freezing order, establish that the funds have a lawful source, and seek an order directing the bank to de-freeze the account.
When an account is frozen under Chapter VA of the NDPS Act, we file a reply and documentary evidence before the Competent Authority showing that the funds were acquired from lawful income, business, or inheritance and not from drug trafficking. We also apply for partial de-freezing to allow the account holder access to funds needed for reasonable living expenses or business operations.
Bank account statements for the relevant period showing the history and source of deposits. Income Tax Returns (ITR) establishing the account holder's declared income. Salary slips, business income records, or other evidence of lawful source of funds. Property documents, loan records, or other evidence explaining large deposits. Affidavit of the account holder explaining the source of funds in the account.Where the lower court is unable to provide timely relief and the continued freezing is causing irreparable harm, we file a writ petition before the High Court under Article 226 of the Constitution for an urgent order directing the de-freezing of the account. High Court intervention is particularly important where the account has been frozen for a prolonged period without a valid court order, or where the freezing is being used as an instrument of harassment.