A Judicial Analysis of Section 106 BNSS: Tracing the Evolution from Section 102 CrPC

This article explores the judicial interpretation of Section 106 Bhartiya Nagarik Suraksha Sanhita, 2023 (‘BNSS’), which is pari materia to the erstwhile Section 102 of the Criminal Procedure Code, 1973 (CrPC). As one of the critical tools for law enforcement, Section 106 BNSS grants police officers power to seize property suspected of being stolen or found under suspicious circumstances that imply involvement in a crime. Over the years, Section 102 has undergone various judicial interpretations, refining its scope and application. This piece will delve into several landmark judgments that have shaped the understanding of Section 102 and thus are relevant for understanding Section 106 BNSS, including State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685, Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119, and Shento Varghese v. Julfikar Husen, (2024) 7 SCC 23. These cases present a detailed trajectory of judicial thought, either expanding or restricting the ambit of this section, while addressing the balance between investigative powers and individual rights

Neogy: A Limited Landmark

In the case of State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685, a division bench of the Supreme Court was dealing with the question as to whether bank account of the accused could be considered “property” under Section 102, thereby allowing the police to seize such accounts during an investigation.

The court noted that the terms ‘any property’ and ‘any offence’ have made the applicability of the provisions wide enough to cover offences under any Act[1]. However, in the same breadth, the court laid down two pre-conditions for the applicability of this section: firstly, that there must be a ‘property’ and secondly, that the property must have been suspicion of commission of any offence[2].

Noticing the divergent views of the various High Courts, the Supreme Court held that there was no justification for giving a narrow interpretation to Section 102[3] and that bank accounts would be ‘property’ for the purposes of this section. To support this conclusion, the Court reasoned that if Section 102 were not interpreted in this manner, the accused could withdraw the entire amount deposited in a bank, even if, after the trial, the funds were proven to be the proceeds of illegal gratification. This would leave the authorities powerless to recover the money, despite its direct connection to the crime committed by the accused in their capacity as a public officer[4].

However, the scope of this judgment was limited to cases where the property or bank accounts had a direct nexus to the commission of a crime. While it set an important precedent, it left open, questions about the extent to which the term “property” could be interpreted under Section 102.

Teesta Setalvad: Expanding the Reach of Section 102

The decision rendered by a Division Bench of the Supreme Court in Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372 raised eyebrows in legal circles for what many perceive as a problematic interpretation of Section 102. The judgment interpreted the provisions of Section 102 overlooking fundamental principles laid down in previous rulings, particularly regarding the nexus between property and criminal activity.

The court held that Section 102 does not requires prior notice to the account holder before seizure of his account[5]. Additionally, the ruling did not fully engage with the issue of whether the powers under Section 102 can only be exercised when the discovery of the offence is a sequel to the discovery of that property and not the other way around. In fact, the Supreme Court did not interfere with the following findings of the Bombay High Court in this case, which had held that it does not matter whether the act of freezing of bank account was a sequel to the crime or not[6],

“44….Therefore, it is insignificant at this stage, when the investigation has progressed to a material point, to ponder around the question as to whether the act of freezing the accounts was a sequel to crime or the crime was detected later. If the arguments to that effect advanced by the learned counsel for the petitioners is accepted at this stage, it would advance the public injustice rather than serving the ends of justice. Defreezing accounts on the basis of such arguments, may paralyse the investigation, which cannot be approved as an act ‘in the interest of justice”

Thus, the Supreme Court endorsed the principle that it is not necessary for the discovery of the property to precede the discovery of the offence. In other words, it does not matter whether the property (in this case, the bank accounts) leads to the uncovering of a crime, or if the crime leads to the discovery of the property. This interpretation accorded by the Supreme Court broadens the scope of Section 102, allowing for the seizure of property based on suspicion rather than on established connections between the crime and the property.

Pertinently the court has given findings that non-cooperation with investigations can strengthen the case for seizing property under Section 102[7]. This interpretation suggests that even if hard evidence is not immediately available, actions perceived as evasive or uncooperative during an investigation could justify the use of power under Section 102.

The judgment reflects an ongoing tension between the needs of law enforcement and the protection of constitutional rights. While Section 102 is seen as a powerful tool for investigators, its broad application—especially in the context of freezing bank accounts—may conflict with Article 21 (right to life and liberty) and Article 300A (right to property) of the Constitution, which have not been considered in this decision at all.

Nevada Properties: Clarifying the Ambit of Section 102

The landmark decision rendered by a bench of three judges in Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119 is widely regarded as having clarified the scope of Section 102.

In this case, the main issue before the bench was whether the term ‘any property’ includes immovable properties as well.  Firstly, the Hon'ble Supreme Court clarified that one of the requirements of Section 102 is that the seized property by itself should lead to the suspicion that some offence has been committed and that the discovery of the offence should be a sequel to the discovery of that property and not the other way around[8]

The court limited the ratio of Neogy (supra) to hold that Neogy (supra) was dealing with the limited issue as to whether bank accounts would fall within the category of any property[9] and did not deal with the issue as to whether immovable property would be included in the term ‘any property’[10].

The court applied the decision of R.K. Dalmia v. Delhi Admn., AIR 1962 SC 1821 to hold that the main test to interpret to interpret the word property in a particular section is not whether the particular kind of property can be subject to the acts covered in that section[11]

The court then analysed the scheme of Section 457 which would be applicable to the case of Section 102, and held that the phrase ‘produced’ under that section was of pivotal importance. The Bench held that the word produced signifies actual or physical production, which is possible only in cases of movable properties and immovable properties cannot be produced before court at all[12].

The court rejected the argument that immovable property is included within the phrase any property under Section 102 and distinguished[13] the decision of Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372 to the facts of its own case.

The court then held that Section 102 contemplates seizure of property, and that immovable property cannot in its strict sense be seized. Seizure of immovable property in this sense and manner would in law require dispossession of the person in occupation/possession of the immovable property, unless there are no claimants, which would be rare. The court held that the language of Section 102 of the Code does not support the interpretation that the police officer has the power to dispossess a person in occupation and take possession of an immovable property in order to seize it, and further held that in the absence of the legislature conferring this express or implied power under Section 102 of the Code to the police officer, there was no power under Section 102 to seize immovable properties.[14]

Further, the court also held that allowing the police officer to seize immovable property on mere ‘suspicion’ of commission of any offence would give drastic powers to the police officers to dispossess the occupants on mere conjecture. It was further held that disputes relating to title, possession, etc of immovable property civil disputes, which require adjudication before the civil courts[15]

This judgment provided much-needed clarity, establishing that not all properties are subject to seizure under Section 102. This limitation on the scope of seizure is crucial to prevent overreach by investigative agencies. The Nevada Properties (supra) decision also brought the interpretation of “property” more in line with the intent of the legislation, focusing on assets that lead to the discovery of the crime and not the other way around.

Post-Nevada Properties: Subsequent Developments

Another important development in this regard is the decision of Shento Varghese v. Julfikar Husen, (2024) 7 SCC 23 wherein the Hon'ble Supreme Court was dealing with the issue as to whether any delay in reporting of the seizure to the magistrate would vitiate the seizure order made under Section 102[16].

Noticing the previous decisions, the court held that validity of the power exercised under Section 102 of the CrPC would not be dependent on the compliance with the duty prescribed under Section 102(3) of the CRPC, and that such orders made under Section 102 can be challenged only on grounds of jurisdiction i.e. that the seizing officer lacked jurisdiction or that the seized property does not come within the ambit of property or that the property which was seized could not have given rise to suspicion concerning the commission of a crime in order to justify the seizure[17]

The decisions of Shento Varghese (supra) and Nevada Properties (supra) judgment have since been followed in subsequent decisions by various High Courts.

In Subrata Dutta v. State of W.B., 2024 SCC OnLine Cal 5555, the Calcutta High Court was dealing with the validity of a seizure order made under Section 102. Noticing the case diary that the Investigating Officer did not report the seizure of accounts to the Magistrate, the court quashed the order noticing that even though delay in reporting to the magistrate may not vitiate the order under Section 102 itself, not reporting to the Magistrate at all would vititate such an order[18].

Similarly, in Nazeer K.T. v. Federal Bank, 2024 SCC OnLine Ker 4614, the Kerala High Court held that delay in forthwith reporting the seizure to the Magistrate may only be an irregularity, total failure to report the seizure will definitely have a negative impact on the validity of the seizure[19]

This judicial trend marks a clear departure from broader interpretations seen in Teesta Setalvad, bringing the scope of Section 102 in line with principles of fairness and due process and in line with Article 21 as well as Article 300A of the constitution.

Conclusion: A Path Forward for Section 106

The judicial evolution of Section 106 BNSS, from its roots in Section 102 CrPC, reflects the ongoing balancing act between empowering law enforcement and protecting individual rights. The Neogy judgment expanded the scope of what could be considered “property,” while Teesta Setalvad further extended the powers of seizure, albeit at the risk of infringing constitutional safeguards. However, Nevada Properties (supra) restores this balance to some extent by restricting the seizure of immovable property, ensuring that law enforcement does not overreach.

Moving forward, it is crucial for courts to continue scrutinizing the application of Section 106 BNSS to ensure that its use remains proportionate and reasonable. As modern crimes evolve, particularly in areas like cybercrime and financial fraud, courts will need to revisit and refine their interpretations to address the complexities of new forms of property. This ongoing judicial refinement is vital for preserving the integrity of the legal process and safeguarding individuals' rights while enabling effective law enforcement.

References

[1] Para 6, State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685

[2] Para 6, State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685

[3] Para 12, State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685

[4] Para 12, State of Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685

[5] Para 20, Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372

[6] Para 44, Teesta Atul Setalvad v. State of Gujarat, 2015 SCC OnLine Guj 6283

[7] Para 24, Teesta Atul Setalvad v. State of Gujarat, (2018) 2 SCC 372

[8] Para 8, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[9] Para 11, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[10] Para 13-14, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[11] Para 15, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[12] Para 25, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[13] Para 28, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[14] Para 29, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[15] Para 32, Nevada Properties (P) Ltd. v. State of Maharashtra, (2019) 20 SCC 119

[16] Para 2, Shento Varghese v. Julfikar Husen, (2024) 7 SCC 23

[17] Para 16, Shento Varghese v. Julfikar Husen, (2024) 7 SCC 23

[18] Para 18, Subrata Dutta v. State of W.B., 2024 SCC OnLine Cal 5555

[19] Para 8, Nazeer K.T. v. Federal Bank, 2024 SCC OnLine Ker 4614