Kerala HC: Police Cannot Attach Bank Account Under S.107 BNSS Without Magistrate's Approval

 IRAC Analysis of Kerala High Court Judgment (Crl.M.C.No.3740/2025, Order dated 02.06.2025)

With Emphasis on the Concept of "Proceeds of Crime"

Issue

·       Whether the police, during the investigation of a criminal case, can freeze the bank account of a third-party company (Headstar Global Pvt. Ltd.) under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), or whether such freezing requires a specific procedure under Section 107 of BNSS, especially when the funds involved may constitute "proceeds of crime".

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Whether money seized from bribe giver can be treated as tainted money for the purpose of Prevention of money laundering Act?

 It is true that so long as the amount is in the hands of a bribe giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money. If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over. Such intent having been entertained well before the amount is actually handed over, the person concerned would certainly be involved in the process or activity connected with "proceeds of crime" including inter alia, the aspects of possession or acquisition thereof. By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. Without such active participation on part of the person concerned, the money would not assume the character of being proceeds of crime. The relevant expressions from Section 3 of the PML Act are thus wide enough to cover the role played by such person. {Part 16}

17. On a bare perusal of the complaint made by the Enforcement Directorate, it is quite clear that the Respondent was prima facie involved in the activity connected with the proceeds of crime.

18. The view taken by the High Court that the Respondent cannot be held liable for the offence under the PML Act is thus completely incorrect.

19. The observations made by us regarding involvement of the Respondent are prima facie in nature and for considering whether the allegations made by the prosecution if accepted to be true at this stage, would make out an offence or not. Needless to say that, on facts, the matter shall be considered purely on merits at the appropriate stage(s).

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1864 of 2022 (Arising out of SLP (Crl.) No. 2668 of 2022)

Decided On: 31.10.2022

Directorate of Enforcement Vs. Padmanabhan Kishore

Hon'ble Judges/Coram:

U.U. Lalit, C.J.I. and Bela M. Trivedi, J.

Author: U.U. Lalit, C.J.I.

Citation:  2022/INSC/1143,MANU/SC/1412/2022.

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