The Karnataka High Court quashed three Sessions Court orders that directed the release of gold, silver, and defreezing of bank accounts linked to wealthtech startup Jar. The ruling came on August 10, setting aside orders from April 4 by the Principal City Civil and Sessions Judge in Bengaluru concerning Jar Gold Retail, according to inc42.com.
Justice M Nagaprasanna’s bench clarified that police do not need prior Magistrate permission to debit-freeze bank accounts as an investigative and preservative measure under Section 106 of the Bharatiya Nagarik Suraksha Sanhita (BNSS). However, police must report such actions immediately to the jurisdictional Magistrate. The court differentiated debit freezes under Section 106 from property attachment under Section 107, which involves judicial processes and potential forfeiture.
The court noted that requiring judicial approval before every debit freeze could hinder investigations, especially in cybercrime cases where funds can be transferred rapidly between accounts. This distinction is significant for law enforcement's ability to preserve evidence and prevent asset dissipation during investigations. The ruling impacts regulatory and investigative approaches to digital asset management and cybercrime enforcement in India.
The development was first reported by Bar and Bench and covered by inc42.com on August 10. Inc42 has reached out to Jar for comments, with updates pending. The ruling clarifies police powers under BNSS Sections 106 and 107 in relation to digital asset freezes and attachments.