Attachment and Forfeiture of Proceeds of Crime — BNSS Innovation

Section 107 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) — a wholly new provision with no counterpart in the Code of Criminal Procedure, 1973 (CrPC) — empowers a Court, on the application of a police officer, to attach and ultimately forfeit any property identified as proceeds of crime. Read with Sections 111 to 124 BNSS (previously Sections 105A to 105L CrPC) which preserve the older regime of mutual legal assistance with foreign States, the new Code now contains a complete two-tier architecture for stripping a crime of its profit: a domestic track that operates the moment a charge sheet looks credible, and an international track that operates through letters of request to a contracting State.

The shift is not cosmetic. Under the predecessor Code the only general route for forfeiture of crime-tainted property was Chapter VII-A (Sections 105A to 105L CrPC), and the Supreme Court read that chapter narrowly: it applied only to offences with international ramifications and not to ordinary local offences. The BNSS breaks that limitation by inserting Section 107 — a domestic, all-India provision that does not depend on a treaty or a contracting State.

Statutory architecture under BNSS

The new Code distributes the attachment-and-forfeiture power across three locations. The reader who is preparing for a state judiciary main paper must hold all three together because an examiner will frame the question by mixing them.

1. Section 85 BNSS (previously Section 83 CrPC) — attachment of property of an absconder against whom a proclamation under Section 84 BNSS has been issued. This is a procedural-compulsion tool; it pressurises the proclaimed person to surrender. It is not a forfeiture provision and is treated in detail in the chapter on processes to compel appearance — summons, warrants, proclamation and attachment.
2. Section 86 BNSS — newly added — Identification and attachment of property of a proclaimed person, including property situated outside India. This is a tracing provision: it allows the Court to direct any officer to identify the absconder's property abroad and attach it. It bridges the proclamation chapter with the cross-border architecture of Chapter VIII BNSS.
3. Section 107 BNSS — newly added — Attachment, forfeiture or restoration of property derived or obtained, directly or indirectly, by any person from the commission of any offence. This is the substantive new tool. It does not require the accused to be a proclaimed offender. It does not require an international element. It applies to any offence.
4. Sections 111 to 124 BNSS (Chapter VIII) — reciprocal arrangements with foreign countries for tracing, attachment and forfeiture of property; carries over Sections 105A to 105L CrPC almost verbatim, with one substantive update (the reference to the Companies Act 1956 in Section 120(4) is replaced by the Companies Act 2013).

Section 107 BNSS — the domestic forfeiture regime

Section 107 BNSS is the heart of the new chapter. The provision allows a police officer, after obtaining the prior approval of the Superintendent of Police or Commissioner of Police, to make an application to the Court having jurisdiction setting out the property believed to be proceeds of crime and praying for an order of attachment. The Court, if satisfied that there are reasonable grounds to believe that the property is the proceeds of any criminal activity, may issue a notice to the person concerned calling upon him to show cause within fourteen days why an order of attachment should not be made.

The procedure is deliberately quick. If the Court is satisfied that issuing the notice would defeat the object of the proceedings — typically because the property is about to be transferred or dissipated — the Court may pass an ex parte order of attachment. Within thirty days of confirmation of the attachment, after hearing the affected party, the Court has to decide whether to forfeit the property to the Government, restore it to a victim of the offence who has a legitimate claim, or release it.

Three-stage flow under Section 107

1. Identification and application. The investigating officer, having reasonable belief that property in the hands of any person is proceeds of crime, applies through the SP/CP to the Court of competent jurisdiction. The application identifies the property and the predicate offence; this is the financial complement to the ordinary power of the police to investigate under Sections 173 to 193 BNSS.
2. Show-cause and attachment. The Court issues a fourteen-day show-cause notice. If notice will frustrate the object, an ex parte attachment is permissible, with the Court fixing a hearing immediately thereafter.
3. Forfeiture, restoration or release. After hearing the affected party, the Court records a finding. If the property is held to be proceeds of crime, it is either forfeited to the Government or restored to a person legitimately entitled (typically the victim of cheating, criminal breach of trust, financial fraud, or organised-crime predicate offences).

What counts as “proceeds of crime”?

The expression is defined in Section 111(c) BNSS (previously Section 105A(c) CrPC) for the purposes of the international chapter, and the same content is borrowed for the domestic provision: any property derived or obtained, directly or indirectly, by any person as a result of criminal activity (including crime involving currency transfers) or the value of any such property.

Three features of this definition matter for the exam-aspirant. First, it is inclusive of indirect derivation — a flat purchased with cash that was first used to buy a luxury watch which was then sold to fund the flat is still “derived” from the predicate offence. Second, the definition extends to the value of the property — even where the original tainted asset has been dissipated, an equivalent value can be tracked. Third, the predicate offence is described in the broadest possible terms (“criminal activity”), so that any cognisable offence can theoretically support an application.

Section 86 BNSS — attaching the proclaimed person's foreign property

Section 86 BNSS, also newly added, complements Section 85 BNSS. Where the older Code allowed attachment only of property within the local jurisdiction (with a District-Magistrate endorsement extending it across districts), Section 86 BNSS empowers the Court to issue letters of request to identify and attach any property of the proclaimed person, including property situated outside India. The mechanism for the foreign leg of the attachment is then the reciprocal-arrangements chapter — Sections 111 to 124 BNSS — which has long been treated in the chapter on reciprocal arrangements with foreign countries for service of summons and warrants.

For the judiciary aspirant, the cleanest way to remember the distinction is this: Section 85 attaches to compel appearance; Section 86 attaches to trace and recover; Section 107 attaches to strip the proceeds of crime from any person, whether absconder or not. The three provisions point at three different evils.

Sections 111 to 124 BNSS — the international architecture

Chapter VIII BNSS preserves the framework first inserted into the CrPC by the Amendment Act of 1993 to give effect to bilateral mutual legal assistance treaties (MLATs). The provisions move in a logical sequence and an aspirant should walk through them in order. The discussion below presents BNSS section numbers first, with the predecessor CrPC reference in parentheses where it differs.

1. Section 111 BNSS (previously Section 105A CrPC) — Definitions. Defines “contracting State”, “identifying”, “proceeds of crime”, “property” and “tracing”.
2. Sections 112 and 113 BNSS (previously Sections 166A and 166B CrPC) — Letters of request to and from a country or place outside India for investigation. The phrase “Notwithstanding anything contained in this Code” that opened these provisions in the CrPC has been dropped, but the substance is unchanged.
3. Section 114 BNSS (previously Section 105B CrPC) — Assistance in securing transfer of persons. A Court in India may transmit a warrant for arrest to a contracting State; a contracting-State warrant may be executed in India. The Court may impose conditions on the transfer of a prisoner.
4. Section 115 BNSS (previously Section 105C CrPC). The pivotal provision. Where a Court has reasonable grounds to believe that property of a person is derived or obtained, directly or indirectly, from the commission of an offence, it may make an order of attachment or forfeiture. If the property is suspected to be in a contracting State, the Court issues a letter of request to the foreign authority. Conversely, where the Central Government receives a letter of request from a contracting State, it forwards the request to the appropriate Indian Court.
5. Section 116 BNSS (previously Section 105D CrPC) — Identifying unlawfully acquired property. The Court directs a police officer not below the rank of Sub-Inspector to take all steps necessary for tracing and identifying the property — including any inquiry, investigation or survey of any person, place, property, asset, document or book of account in any bank or public financial institution.
6. Section 117 BNSS (previously Section 105E CrPC) — Seizure or attachment. If the officer conducting the inquiry has reason to believe that the property is likely to be concealed, transferred or otherwise dealt with so as to defeat the proceedings, he may make an order seizing or, if seizure is not practicable, attaching the property. The seizure draws on the general search-warrant and seizure regime under Sections 96 to 105 BNSS, but the order is interim: it must be confirmed by the Court within thirty days, failing which it lapses.
7. Section 118 BNSS (previously Section 105F CrPC) — Management of seized or forfeited property. The Court appoints the District Magistrate of the area where the property is situated, or any officer nominated by him, as Administrator. The Administrator manages the attached property in the manner the Central Government specifies and disposes of forfeited property under Government direction; the function dovetails with the chapter on disposal of property seized under the general Sections 497 to 503 BNSS.
8. Section 119 BNSS (previously Section 105G CrPC) — Notice of forfeiture. If the Court has reason to believe, after the inquiry under Section 116, that the property is proceeds of crime, it serves a notice on the person affected calling on him to indicate within thirty days the source of income, earnings or assets out of which the property was acquired and to show cause why it should not be forfeited to the Central Government. Where the property is held on behalf of the affected person by a third party, the notice is served on the third party as well.
9. Section 120 BNSS (previously Section 105H CrPC) — Forfeiture in certain cases. After considering the explanation, the available material and after giving a reasonable opportunity of hearing, the Court records a finding whether the property is proceeds of crime. If the affected person does not appear within the thirty-day period, the Court may proceed ex parte on the basis of the material before it. Where the Court cannot identify the specific property, it is empowered to specify, “to the best of its judgment”, the properties that are proceeds of crime. On such a finding, the property stands forfeited to the Central Government free from all encumbrances. Where the forfeited property includes shares in a company, the company is bound to register the Central Government as the transferee notwithstanding the Companies Act, 2013, or its articles of association.
10. Section 121 BNSS (previously Section 105I CrPC) — Fine in lieu of forfeiture. Where only part of the property is shown to be proceeds of crime, the Court may give the affected person the option of paying a fine equal to the market value of that part instead of suffering forfeiture; on payment of the fine, the declaration of forfeiture is revoked.
11. Section 122 BNSS (previously Section 105J CrPC) — Transfers null and void. Any transfer of the property after the attachment order or notice of forfeiture is to be ignored for the purposes of the chapter; if the property is finally forfeited, the intervening transfer is deemed null and void. This provision is the answer to a common litigation tactic of selling tainted property to a friendly third party while proceedings are pending.
12. Sections 123 and 124 BNSS (previously Sections 105K and 105L CrPC). Procedure for letters of request and the Central Government's notification power to specify conditions for the application of the chapter to particular contracting States.

Leading authority — the Balram Mihani limit on the old chapter

The single most important judicial gloss on the predecessor Chapter VII-A is State of Madhya Pradesh v. Balram Mihani (2010) 2 SCC 602. The accused there were facing local offences under the IPC and a State gambling enactment. The State filed an application invoking the old Section 105C and obtained an order of forfeiture; the High Court quashed the order; the State's appeal to the Supreme Court was dismissed.

The Supreme Court held that the old Chapter VII-A was not the “ordinary law of the land”. It was an enabling chapter for offences having international ramifications and was supplemental to Sections 166A and 166B of the CrPC. The chapter could not be invoked for offences which were purely local and had no connection with the kinds of crime — terrorist financing, currency-transfer offences and the like — identified in the Statement of Objects and Reasons of the 1993 Amending Act.

This reading is precisely what Section 107 BNSS displaces. By creating a domestic forfeiture power that does not depend on a contracting-State link, the BNSS makes the Balram Mihani limitation irrelevant for forfeitures pursued under Section 107. Balram Mihani continues to govern the international chapter (Sections 111 to 124 BNSS); it does not govern Section 107.

Section 107 BNSS and the PMLA — overlap and distinction

The student must not collapse Section 107 BNSS into the Prevention of Money Laundering Act, 2002 (PMLA). They overlap on language but operate on different planes. The PMLA's regime of provisional attachment under Section 5, adjudication by the Adjudicating Authority and confirmation by the Appellate Tribunal applies only where the underlying offence is a scheduled offence and where the property qualifies as “proceeds of crime” under Section 2(1)(u) PMLA. Investigation is by the Enforcement Directorate.

Section 107 BNSS, by contrast, applies to any offence. The investigating agency is the police of the State concerned. The forum is the Court trying or competent to try the predicate offence, not a separate adjudicating authority. The order is judicial and from inception; there is no two-tier authority structure. The two regimes can run in parallel where the predicate offence is also a scheduled offence; the property cannot be attached twice over but the BNSS proceeding will not be stayed merely because PMLA proceedings are afoot.

For the same reason, Section 107 BNSS does not displace special-statute forfeiture under the NDPS Act, the Unlawful Activities (Prevention) Act or the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. Each special law continues to operate in its own field. Section 107 fills the gap left for purely “ordinary” offences which fall outside any of these special regimes.

Drafting and procedural notes for the trial-court reader

Several practical points emerge from the text of Sections 107 and 111 to 124 BNSS that recur in court practice and in mains questions.

• Reasonable grounds, not proof beyond doubt. The threshold for an attachment order at the interim stage is “reasonable grounds to believe”, not the trial standard. The Court is not adjudicating guilt; it is preserving res for an eventual forfeiture.
• Thirty-day confirmation and thirty-day show-cause. Two thirty-day periods recur. Under Section 117 BNSS, an interim seizure or attachment by the investigating officer must be confirmed by the Court within thirty days. Under Section 119 BNSS, the show-cause notice gives the affected person thirty days to indicate the source of income and acquisition. Missing either deadline has different consequences — the first lapses the seizure, the second authorises an ex parte finding.
• Burden of explanation. Once a notice under Section 119 BNSS is served, the affected person carries the practical burden of indicating the lawful source of his acquisition. Failure to come forward within the statutory window invites ex parte forfeiture. The Court is permitted, where specific tracing is impossible, to specify the properties that are proceeds of crime “to the best of its judgment” — a power that necessarily relaxes ordinary rules of strict proof.
• Encumbrance-free vesting. Forfeited property vests in the Government “free from all encumbrances”. Mortgagees and pledgees of the affected person therefore lose their security; their remedy is to seek restoration on the strength of a legitimate, prior, independent interest.
• Voiding intermediate transfers. Section 122 BNSS protects the proceedings against last-minute transfers; the trial court does not have to undo each transfer separately, the statute deems them null and void on the eventual forfeiture finding.
• Audio-video record of seizure. Where the attachment requires a search and seizure operation, Section 105 BNSS now mandates that the operation be recorded through audio-video electronic means. The chapter on audio-video recording of search and seizure details that obligation; failure to record undermines the evidentiary value of the seizure list.
• Restoration to victim. Section 107 BNSS expressly contemplates restoration to a person legitimately entitled. This gives victims of frauds, cheating and breach-of-trust offences a faster restoration route than a civil suit, and avoids the long delays of recovery proceedings before the Debt Recovery Tribunal or the civil court.
• Inherent powers as residuary check. The High Court's inherent powers under Section 528 BNSS (previously Section 482 CrPC) remain available where an attachment under Section 107 is patently mala fide or where it amounts to abuse of process — for example, attachment of a salary account on the bare allegation of disproportionate assets, with no application of mind to the predicate offence.

How Section 107 BNSS interacts with the rest of the Code

The new domestic forfeiture power does not stand alone. It works only in tandem with the rest of the BNSS — the chapters that govern how a criminal proceeding begins, how the police investigate, and how property already in custody is handled. The aspirant who has worked through the Zero FIR and e-FIR mechanism, the mandatory forensic investigation in 7-plus-year offences and the trial-in-absentia regime for proclaimed offenders will see Section 107 as the financial complement to those reforms: the predicate-offence registration is faster, the investigation is forensic-driven, the trial does not stall on absconding, and the proceeds of the offence do not survive in the offender's hands.

Read in this scheme, Section 107 BNSS is not just a stand-alone forfeiture provision — it is a deterrence tool. The 1993 chapter survived for thirty-one years as a symbolic provision because Balram Mihani closed it to ordinary offences. The BNSS opens the door that Balram Mihani shut. Whether the new regime will be matched with administrative capacity at the trial-court level — District Magistrates trained as Administrators under Section 118 BNSS, banks responsive to Section 116 inquiries, audio-video infrastructure for every seizure — is the implementation question that will define how Section 107 actually operates over the next decade.

MCQ angle — the recurring distinctions

Three distinctions recur in objective papers and short-answer questions and the reader should fix them in memory.

1. Section 85 vs Section 86 vs Section 107 BNSS. Compulsion (absconder), tracing (proclaimed person's foreign property) and forfeiture (proceeds of crime in any hand). Three different pressure points; three different orders.
2. Section 107 BNSS vs Sections 111–124 BNSS. Domestic vs international. The first does not need a contracting State; the second does. Balram Mihani applies to the second, not the first.
3. Section 107 BNSS vs PMLA Section 5. Any offence vs scheduled offence; police vs Enforcement Directorate; trial Court vs Adjudicating Authority. Both can run in parallel, the BNSS is not deferred to the PMLA.

For an integrated revision of the procedural Code as a whole, the larger chapter on the scheme and transition of the BNSS places Section 107 in its proper place: not a peripheral innovation, but a missing piece that the predecessor Code never had. The aspirant working through the full set of CrPC and BNSS notes for state judiciary mains and All India Bar examinations should treat this chapter as one of the high-yield BNSS-specific innovations — together with the rewritten public-order provisions and the bail-and-bonds reforms.

Frequently asked questions

What is the difference between Section 85 BNSS and Section 107 BNSS attachment?

Section 85 BNSS (previously Section 83 CrPC) attaches the property of a person against whom a proclamation under Section 84 BNSS has been issued. Its object is to compel the absconder to surrender; on his appearance the attachment falls. Section 107 BNSS, by contrast, is a substantive forfeiture provision. It applies to any person who holds proceeds of crime, whether or not he is absconding, and it ends in forfeiture to the Government or restoration to a victim. The first is process; the second is outcome.

Does Section 107 BNSS need a treaty or contracting-State link to operate?

No. Section 107 BNSS is a domestic provision. It applies wherever the property and the predicate offence are located within India. The international architecture of Sections 111 to 124 BNSS (previously Sections 105A to 105L CrPC) continues to apply only to cross-border attachment and forfeiture and depends on a contracting State. The Supreme Court's restrictive reading of the old chapter in State of M.P. v. Balram Mihani (2010) 2 SCC 602 — that it could not be used for purely local offences — therefore does not constrain Section 107.

What does "proceeds of crime" mean under the BNSS?

Section 111(c) BNSS (previously Section 105A(c) CrPC) defines proceeds of crime as any property derived or obtained, directly or indirectly, by any person as a result of criminal activity (including crime involving currency transfers) or the value of any such property. The definition is inclusive of indirect derivation and of substituted property of equivalent value, so an asset purchased with funds traceable to the offence falls within the definition even after one or more intermediate sales.

Can Section 107 BNSS proceedings run in parallel with PMLA proceedings?

Yes. The PMLA, 2002, applies only to offences listed in its Schedule and is administered by the Enforcement Directorate before an Adjudicating Authority. Section 107 BNSS applies to any offence, is administered by the police and is decided by the trial Court. Where the predicate offence is a scheduled offence, both regimes are available; the property cannot be attached twice for the same forfeiture, but the BNSS proceeding is not stayed merely because PMLA action has been initiated.

Who manages the property after a Section 117 BNSS attachment?

Section 118 BNSS (previously Section 105F CrPC) requires the Court to appoint the District Magistrate of the area where the property is situated, or any officer nominated by him, as Administrator. The Administrator receives and manages the attached property in the manner the Central Government specifies and, in case of forfeiture, disposes of the property under Government direction. Banks and registering authorities are obliged to comply with the Administrator's directions in respect of the attached asset.

What happens to a transfer of property executed after the attachment order?

Section 122 BNSS (previously Section 105J CrPC) provides that any transfer of the property after the order of attachment under Section 117 BNSS or after the issue of a show-cause notice under Section 119 BNSS is to be ignored for the purposes of the chapter. If the property is eventually forfeited to the Central Government under Section 120 BNSS, the intervening transfer is deemed null and void. The trial Court is therefore not required to set aside such transfers separately; the statute does it.