The Kerala High Court has ruled that under Section 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, a bank account can only be attached after obtaining approval from the jurisdictional Magistrate. Police cannot act unilaterally in such matters, even if they suspect the funds to be proceeds of crime.
This ruling was passed by Justice V.G. Arun in the case of Headstar Global Pvt. Ltd. v. State of Kerala & Ors. (Crl.M.C. No. 3740 of 2025), where the petitioner challenged the police's action of freezing its bank account without Magistrate's permission.
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The case stemmed from a complaint by Apple Middle East General Trading LLC, which had paid ₹49.53 lakhs to Spezia Organic Condiments Pvt. Ltd. for the export of sugar. Allegedly, the consignment never shipped due to government policy changes, and the amount was transferred via Headstar Trading LLP to the petitioner’s account.
The petitioner argued that these transfers were part of regular business and not criminal in nature. They contended that under the BNSS, particularly Sections 94 and 106, the police had no authority to freeze accounts unless the property was stolen or there was reasonable suspicion of a crime. Section 107, which deals with attachment of proceeds of crime, requires Magistrate approval.
“Going by Section 107 of BNSS, a police officer investigating a crime has to approach the jurisdictional Magistrate seeking attachment of any property believed to be derived directly or indirectly from criminal activity or the commission of an offence.” — Kerala High Court
The Court highlighted the distinction between "seizure" under Section 106 and "attachment" under Section 107. Seizure is to preserve evidence during investigation and can be done by police, while attachment is for securing proceeds of crime and needs Magistrate's approval.
“The logic behind this distinction being that the purpose of seizure is more to secure the evidence during an investigation, whereas attachment is intended to secure the proceeds of crime by preventing its disposal and thus ensuring its availability for legal procedure such as forfeiture and distribution to the victim/s.” — Kerala High Court
Justice Arun further pointed out that even if the funds in the petitioner’s account were proceeds of crime, they could only be attached through the procedure laid out in Section 107, which includes notice, hearing, and order by the Magistrate.
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As a result, the High Court quashed the lower court’s order rejecting the company’s plea and directed lifting the freeze on the petitioner’s account. However, the police were granted liberty to approach the Magistrate if they wished to seek attachment under the correct legal process.
“If so, the amount can be attached or the account frozen only by following the procedure prescribed in Section 107 of BNSS.” — Justice V.G. Arun
Case title: Headstar Global Pvt. Ltd. V. State Of Kerala & Ors.
Case No.: Crl.Mc No. 3740 Of 2025
Counsel For Petitioner Adv. Shri. Babu S. Nair
Counsel For Respondent: By Advs. Shri.Sarathkumar.T.S, Smt.Jismemol James, Shri.Shyam Kumar M.P, Shri.Achankunju P.C, Shri.Rony V.P., Smt.Vishnuja Vasudevan
