Temporary freezing of suspected proceeds-of-crime bank accounts is permissible, but indefinite restraint must yield to provisional attachment safeguards.

In a money-laundering investigation, Section 102 CrPC may be used to freeze a bank account suspected to hold proceeds of crime, because bank accounts are "property" and the threshold is suspicion rather than the higher "reason to believe" standard for provisional attachment under Section 5 of the PMLA. Section 65 PMLA permits that recourse where consistent with the special statute, so temporary freezing may operate before attachment material is complete. The text also notes that non-compliance with Section 102(3) does not automatically vitiate the freezing measure in PMLA proceedings. However, such restraint cannot continue indefinitely and must give way to prompt provisional attachment or release of the account.

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Issues: (i) Whether Section 102 of the Code of Criminal Procedure, 1973 could be invoked to freeze the petitioner's bank account in aid of investigation under the Prevention of Money-Laundering Act, 2002; (ii) whether recourse to Section 102 of the Code could be taken by virtue of Section 65 of the Prevention of Money-Laundering Act, 2002 before a provisional attachment order under Section 5 of that Act; (iii) whether non-compliance with Section 102(3) of the Code vitiated the freezing order; (iv) whether freezing could be continued indefinitely without a provisional attachment under Section 5 of the Prevention of Money-Laundering Act, 2002.

Issue (i): Whether Section 102 of the Code of Criminal Procedure, 1973 could be invoked to freeze the petitioner's bank account in aid of investigation under the Prevention of Money-Laundering Act, 2002.

Analysis: Section 102 of the Code permits seizure or prohibitory control over property found under circumstances creating suspicion of an offence. Bank accounts fall within the expression "property". In money-laundering investigations, if proceeds of crime are suspected to have been credited to an account, freezing the account may be an investigative measure to preserve the property and prevent its dissipation. The Court distinguished the threshold of suspicion under Section 102 from the higher threshold of "reason to believe" required for provisional attachment under Section 5 of the Prevention of Money-Laundering Act, 2002.

Conclusion: The invocation of Section 102 of the Code to freeze the bank account was justified and the issue was answered in favour of the respondent.

Issue (ii): Whether recourse to Section 102 of the Code could be taken by virtue of Section 65 of the Prevention of Money-Laundering Act, 2002 before a provisional attachment order under Section 5 of that Act.

Analysis: Section 65 of the Prevention of Money-Laundering Act, 2002 makes the Code of Criminal Procedure, 1973 applicable to proceedings under the Act so far as there is no inconsistency. The Court held that before adequate material is gathered to satisfy the requirements of Section 5, the authorities may resort to Section 102 read with Section 65 for temporary freezing during investigation. This does not override the scheme of the special statute, because the freezing operates only as a provisional investigative measure pending collection of material for attachment.

Conclusion: Recourse to Section 102 of the Code through Section 65 of the Prevention of Money-Laundering Act, 2002 was permissible and this issue was answered in favour of the respondent.

Issue (iii): Whether non-compliance with Section 102(3) of the Code vitiated the freezing order.

Analysis: The Court held that the impugned action was taken by officers under the Prevention of Money-Laundering Act, 2002 in the course of proceedings under that statute and not as an ordinary police seizure. In that setting, non-compliance with Section 102(3) did not by itself invalidate the freezing action. However, the Court also emphasized that the measure could not remain open-ended and had to be controlled by the statutory scheme and timely action under Section 5.

Conclusion: Non-compliance with Section 102(3) did not vitiate the freezing order, and the issue was answered against the petitioner.

Issue (iv): Whether freezing could be continued indefinitely without a provisional attachment under Section 5 of the Prevention of Money-Laundering Act, 2002.

Analysis: The Court noted that a provisional attachment under Section 5 has a defined life, whereas a freezing direction under Section 102 read with Section 65 would otherwise have no prescribed time limit. Such indefinite restraint was held to be impermissible. The freezing direction could be allowed to continue only for a limited period to enable the authority to pass an appropriate provisional attachment order, failing which the account had to be released for operation.

Conclusion: The freezing order could not continue indefinitely and this issue was answered in favour of the petitioner.

Final Conclusion: The investigative freezing of the bank account was upheld as a permissible interim measure under the special statutory scheme, but the Court restricted its continued operation by requiring prompt recourse to provisional attachment under the Prevention of Money-Laundering Act, 2002, failing which the restraint would automatically end.

Ratio Decidendi: In a money-laundering investigation, a bank account suspected to contain proceeds of crime may be frozen under Section 102 of the Code of Criminal Procedure, 1973 read with Section 65 of the Prevention of Money-Laundering Act, 2002 as a temporary investigative measure, but such restraint cannot be allowed to continue indefinitely and must yield to the statutory safeguards governing provisional attachment.

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