2026 (2) TMI 892 - HC - GST

Police power to freeze bank accounts is limited; summons under Section 94 do not authorise debit freezes without magistrate-ordered seizure or attachment.

Territorial nexus is satisfied where part of the cause of action-here debit freezing-occurs within the court's limits, rendering the writ maintainable; ... Territorial jurisdiction under Article 226(2) - cause of action arising within territorial jurisdiction - debit-freezing of bank account - scope of summons power u/s 94 of the BNSS - seizure and attachment powers u/s 106 and Section 107 of the BNSS - requirement of magistrate order for attachment - quashing of unlawful police directions - Invocation of jurisdiction of this Court - HELD THAT:- In the case at hand the act of debit freezing of the petitioner’s bank account is the main cause of action for the writ petition. The same has arisen within the territorial jurisdiction of this Court and therefore the test that the facts pleaded must form an integral part of the cause of action arising within the territorial limits of a given High Court for it to entertain a writ petition stands overwhelmingly answered. This Court is cognizant of the fact that in Kusum Ingots & Alloys Ltd [2004 (4) TMI 342 - SUPREME COURT (LB)] the Hon’ble Supreme Court held that even if a small part of a cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merits. In the case at hand, as has already been indicated hereinabove, the main part of cause of action for the present writ petition has arisen within the jurisdiction of this Court. Since the writ petition does not seek quashment either of the proceedings initiated by the CGST authorities or the investigation conducted by the police authorities and since it is only confined to the order of debit freezing of her Bank account, therefore, the writ petitioner would not be necessarily required to plead and prove the illegality of the investigation conducted by the respondent police authorities or the proceedings initiated by the CGST authorities for the purpose of the present writ petition. In Nawal Kishore Sharma [2014 (8) TMI 994 - SUPREME COURT] the Hon’ble Supreme Court has clearly held that a writ petition can be maintained, if the petitioner can establish that a legal right, claimed by him, has been infringed by the respondents within the territorial limit of the Court’s jurisdiction. Paragraph 16 of the said judgement may be noticed: 16. Regard being had to the discussion made hereinabove, there cannot be any doubt that the question whether or not cause of action wholly or in part for filing a writ petition has arisen within the territorial limit of any High Court has to be decided in the light of the nature and character of the proceedings under Article 226 of the Constitution. In order to maintain a writ petition, the petitioner has to establish that a legal right claimed by him has been infringed by the respondents within the territorial limit of the Court's jurisdiction. Thus, the petitioner has clearly made out a case of her right being infringed by the debit freezing of the petitioner’s bank account within the territorial limit of this Court’s jurisdiction. In such view of the matter, it cannot be said that this Court lacks territorial jurisdiction to entertain the writ petition. Scope of summons power under Section 94 of the BNSS - Debit frozen on the basis of a notice - HELD THAT:- There is nothing on record to show that the concerned Investigating Officer has approached the jurisdictional Magistrate and any order of seizure or attachment has been passed or that the debit freezing has been reported to the jurisdictional Magistrate. A debit freeze of bank account cannot be continued indefinitely without any appropriate order of the jurisdictional Magistrate. In such view of the matter, the impugned notice dated January 06, 2025 issued by the mandating debit freezing of the petitioner’s bank account cannot be said to be in accordance with law and cannot directed to be continued. Accordingly, such part of the notice dated January 06, 2025 issued by the Officer-in-charge, Police Station Itanagar, Papumpare, Arunachal Pradesh to the Branch Manager, ICICI Bank, whereby the bank has been directed to debit freeze the petitioner’s bank account is set aside and quashed. The bank shall allow the petitioner to operate the petitioner’s bank account bearing No. 104905500535. A report dated January 3, 2026 was filed by the learned Registrar General confirming that service had been effected on the said two respondents, however, none appeared on their behalf in the proceedings despite service. Accordingly, the matter has been decided in their absence. Since by the order dated January 30, 2026, CAN 1 of 2026 had already been treated to be a part of the writ petition, the same should also be treated as having been disposed of. Issues: (i) Whether this High Court has territorial jurisdiction under Article 226(2) to entertain a writ petition challenging debit freezing of a bank account maintained within its territorial limits; (ii) Whether a notice under Section 94 of the Bhartiya Nagrik Suraksha Sanhita, 2023 authorises a police officer to direct a bank to debit freeze a bank account without appropriate magistrate orders under Sections 106/107 of the Sanhita.Issue (i): Whether this High Court has territorial jurisdiction to entertain the writ petition.Analysis: The pleadings assert that the debit freezing directed by notice affected the petitioner's bank account at the Kankurgachi branch within the territorial limits of this Court and that the grievance is confined to the freezing of that account. Jurisdictional tests require that material facts constituting part of the cause of action arise within the territorial jurisdiction for clause (2) of Article 226 to be attracted; the nature and substance of the cause of action are material in this inquiry.Conclusion: The territorial nexus for part of the cause of action is established by the debit freezing of the account within this Court's jurisdiction; the writ petition is maintainable before this High Court.Issue (ii): Whether the police notice under Section 94 BNSS, 2023 authorised the debit freezing of the petitioner's bank account without magistrate orders under Sections 106/107.Analysis: Section 94 BNSS relates to summons to produce documents or things and does not itself empower police to effect debit freezing of bank accounts. Sections 106 and 107 distinguish seizure (immediate securing of property during investigation) from attachment (which requires application to and orders by the magistrate, including show-cause and opportunity). The impugned notice effected a debit freeze without record of any magistrate order or an application under Section 107 and without reporting seizure/attachment to the jurisdictional magistrate as required for continuing restraints on bank accounts.Conclusion: The direction in the notice to debit freeze the petitioner's bank account was not authorised by Section 94 and cannot be continued indefinitely in the absence of appropriate magistrate orders under Sections 106/107; the debit freeze is quashed and the bank is directed to allow operation of the account.Final Conclusion: The writ petition is maintainable in this High Court and, on the merits, the part of the police notice mandating debit freeze of the petitioner's account is set aside; the petitioner's account shall be permitted to operate, subject to any future lawful steps taken in accordance with Sections 106/107 of the Bhartiya Nagrik Suraksha Sanhita, 2023.Ratio Decidendi: A notice under Section 94 of the Bhartiya Nagrik Suraksha Sanhita, 2023 does not empower police to order debit freezing of bank accounts; attachment or continued restraint of bank accounts requires compliance with seizure/attachment procedures and appropriate magistrate orders under Sections 106 and 107 of the Bhartiya Nagrik Suraksha Sanhita, 2023.