Bank account freezing during investigation upheld despite reporting lapse, with limited access allowed for subsistence allowance credit.

Bank accounts may be treated as property liable to seizure during criminal investigation, and non-reporting of the seizure to the Magistrate under Section 102(3) of the Code of Criminal Procedure does not by itself require defreezing where the investigation is pending and the funds are alleged to be connected with the offence. On those facts, the Court upheld the freezing order and refused general defreezing. However, the petitioner's subsistence allowance was treated as distinct from the disputed sale proceeds, so the salary account was directed to be defreezed only to the limited extent necessary to receive that allowance, without permitting other dealings with the disputed funds.

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Issues: (i) Whether the freezing of the accused's bank accounts could be set aside for alleged non-compliance with Section 102(3) of the Code of Criminal Procedure, 1973. (ii) Whether limited defreezing of the salary account was warranted to enable credit of subsistence allowance.

Issue (i): Whether the freezing of the accused's bank accounts could be set aside for alleged non-compliance with Section 102(3) of the Code of Criminal Procedure, 1973.

Analysis: The complaint disclosed offences under Sections 406 and 420 read with 34 of the Indian Penal Code, 1860, and the police had frozen the petitioner's bank accounts during investigation. The Court held that bank accounts are property capable of seizure under Section 102 of the Code of Criminal Procedure, 1973, and that the requirement of reporting the seizure to the Magistrate is mandatory in nature. However, on the facts, the investigation was still pending, the accounts were said to contain the sale proceeds in dispute, and defreezing at that stage would create a real risk of dissipation of the amount alleged to be connected with the offence. The Court therefore found no manifest illegality in the order refusing to defreeze the accounts merely on the ground of non-reporting under Section 102(3).

Conclusion: The challenge to the freezing order was rejected, and no general defreezing of the accounts was ordered.

Issue (ii): Whether limited defreezing of the salary account was warranted to enable credit of subsistence allowance.

Analysis: The Court treated the petitioner's subsistence allowance as distinct from the disputed sale proceeds and held that it could not be treated as part of the alleged crime money. Exercising powers under Section 482 of the Code of Criminal Procedure, 1973, the Court directed limited defreezing of the salary account only to facilitate deposit of the subsistence allowance by the departmental authorities, without permitting other transactions from that account relating to the disputed funds.

Conclusion: Limited defreezing of the salary account was granted for the restricted purpose of crediting subsistence allowance.

Final Conclusion: The revision was disposed of with confirmation of the freezing order in substance, but with a restricted relief allowing the salary account to be operated only for receipt of subsistence allowance.

Ratio Decidendi: Freezing of a bank account during investigation under Section 102 of the Code of Criminal Procedure, 1973, will not be set aside merely because the seizure was not reported in the manner contemplated by sub-section (3), where the investigation is pending and the account is allegedly linked to the offence; however, a limited direction may be issued to protect an unrelated statutory entitlement such as subsistence allowance.

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