IIFL FINANCE LIMITED vs THE STATE OF KARNATAKA

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 30 DAY OF OCTOBER, 2026


BEFORE

THE HON'BLE MR. JUSTICE B.PRAMOD

WRIT PETITION NO.9461 OF 2023 (GM-RES)

BETWEEN:

IIFL FINANCE LIMITED
A COMPANY REGISTERED
UNDER THE COMPANIES ACT, 2013
HAVING OFFICE AT
NO.11, GROUND FLOOR, ADAMS CHAMBER
RICHMOND ROAD
BENGALURU-560 025
REPRESENTED BY ITS
AUTHORISED SIGNATORY/LEGAL HEAD
MR. RITHESH VARMA
S/O. PRADEEP KUMAR VARMA
AGED ABOUT 25 YEARS
…PETITIONER
(BY SRI S. R. DODDAWAD, ADVOCATE,
SMT. MITHULYA MURALI, ADVOCATE FOR
SMT. ANUPARNA BORDOLOI, ADVOCATE)
AND:

1. THE STATE OF KARNATAKA
REPRESENTED BY
CEN CRIME POLICE STATION
EAST DIVISION
BROADWAY ROAD
SHIVAJI NAGAR
BENGALURU-560 051

2.
S. SANJAY
S/O. LATE M. SURESH
AGED ABOUT 21 YEARS












Digitally signed
by
SHARADAVANI
B
Location: HIGH
COURT OF
KARNATAKA

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


RD
NO.33, 3 CROSS
SADHASHIVA TEMPLE ROAD
RS PALYA, KAMMANAHALLI
BENGALURU-560 033

3. ICICI BANK LIMITED
215, FREE PRESS HOUSE
FREE PRESS MARG
NARIMAN POINT
MUMBAI-400 021
REPRESENTED BY MANAGER
…RESPONDENTS
(BY SRI MAHANTESH SHETTAR, A.G.A., FOR R-1)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET
ASIDE THE IMPUGNED NOTICE DATED 15.04.2023 ISSUED BY
THE RESPONDENT NO.1 POLICE TO RESPONDENT NO.3 TO
FREEZE THE BANK ACCOUNT NO.000405113598 OF THE
PETITIONER, IN PURSUANT TO REGISTRATION OF THE FIR IN
CR. NO.0762/2022 AS THE SAME IS HIGHLY ARBITRARY, AND
WITHOUT THE AUTHORITY OF LAW (ANNEXURE-A, B AND C)
AND DIRECT THE RESPONDENT NO.3 TO DE-FREEZE THE BANK
ACCOUNT BEARING NO.000405113598 OF THE PETITIONER
THAT IS MAINTAINED WITH RESPONDENT NO.3 VIDE
ANNEXURE-D.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B.PRAMOD

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


ORAL ORDER
The petitioner has filed the present writ petition
calling in question the police notice dated 15.04.2023
(Annexure-A) issued under Sections 91 and 92 of the Code
of Criminal Procedure, 1973, whereby respondent No.3–
ICICI Bank was directed to debit-freeze the bank account
of the petitioner in connection with an online fraud case
registered at the Cyber Crime Police Station, East Division,
Bengaluru City. At the outset, the Learned Counsel for the
petitioner clarified that the challenge is to Annexure-A only
and there is mistake in the prayer (a). This Court, by
order dated 27.04.2023, granted an interim order in the
matter.
2. Heard Sri S.R. Dodwad and Smt. Mithulya
Murali, learned counsel appearing for the petitioner and Sri
Mahantesh Shettar, learned Additional Government
Advocate appearing for respondent No.1. Perused the
material available on record.

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


3. It is the case of the petitioner that it is a
company incorporated under the provisions of the
Companies Act, 1956, and is a non-banking financial
institution engaged in providing financial facilities to
individuals and entities. The petitioner-Company maintains
a corporate bank account bearing No.000405113598 with
respondent No.3–Bank. The said account is utilized for
disbursement of sanctioned loan amounts to its customers
and for collection of monthly instalments towards
repayment of the loans. It is further contended that the
transactions carried out through the said account are duly
reported to the Reserve Bank of India (RBI). In support
thereof, the relevant statement has been produced at
Annexure-D.
4. It is further contended that on 18.10.2022, a
gold loan was sanctioned to one Sri Mohnish Mudgal, who
repaid the entire loan amount and redeemed the pledged
gold on 22.12.2022. Subsequently, on 19.04.2023,

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


respondent No.3–Bank forwarded an email to the
petitioner enclosing the impugned police notice dated
15.04.2023.
5. Learned counsel for the petitioner submits that
respondent No.2 lodged a complaint dated 14.11.2022
before respondent No.1 alleging a UPI fraud transaction
had occurred on 21.10.2022. Pursuant thereto, Crime
No.0762/2022 came to be registered against the accused.
It is further submitted that the petitioner-Company
furnished the particulars of the gold loan transaction
relating to Sri Mohnish Mudgal to respondent No.1.
6. It is the specific contention of the petitioner
that the bank account in question is its corporate account
used for disbursement of loans and carrying out day-to-
day financial transactions, whereas the amount involved in
the alleged crime is only Rs.1,98,797/-.
7. The learned AGA supports the action taken in
Annexure-A.

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


8. The issue involved in the present writ petition is
no longer res integra . This Court, by an order dated
16.10.2026 passed in W.P.No.1567/2026 ( Muthoot
Finance Limited v. State of Karnataka and Others ), while
considering a similar issue, has observed as under:
"…..4. Learned counsel for the petitioner submits
that the issue involved in the present writ petition
is no longer res integra in view of the order dated
19.09.2024 passed by a Coordinate Bench of this
Court in W.P. No.25563/2024 (Muthoot Finance
Limited v. State of Karnataka and Another). It is
further submitted that the said order of the
Coordinate Bench has been affirmed by the Division
Bench of this Court in W.A. No.1653/2024
5.Per contra, learned Additional Government
Advocate submits that though an incorrect
provision of law has been invoked, the gold articles
have been seized under Section 107 of the
Bharatiya Nagarik Suraksha Sanhita, 2023 (for
short, 'BNSS, 2023'), and that the petitioner is
required to follow the procedure prescribed under
the said provision.
6.In reply, learned counsel for the petitioner
submits that in the operative portion of the order
passed in W.P.No.25563/2024, a direction is given
to the police to restore the seized articles and in
case, the same is produced before the learned
Magistrate, then the jurisdictional Magistrate is
requested to release the same in favour of the
petitioner subject to the terms mentioned in
paragraph No. 4.

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


7. It is not in dispute that the order passed by the
Coordinate Bench of this Court in W.P.
No.25563/2024 has been affirmed by the Division
Bench in W.A. No.1653/2024. Since the issue
involved in the present writ petition is similar to the
one considered in the aforesaid proceedings and
the order of the Coordinate Bench has been
affirmed by the Division Bench, this Court is of the
considered opinion that the petitioner is entitled to
similar relief, subject to the conditions stipulated in
the said order…".

9 . In view of the aforesaid order and having regard
to the fact that learned counsel appearing for the parties
do not dispute that the issue involved in the present writ
petition is squarely covered by the said order, this Court
finds no justification to take a different view in the present
matter.
10 . Accordingly, this writ petition stands disposed of
in terms of the order dated 16.10.2026 passed in
W.P.No.1567/2026, extending the benefit of the directions
issued therein to the petitioner herein, subject to the
conditions stipulated in the said order, insofar as they are
applicable to the present case.

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HC-KAR
NC: 2026:KHC:60520
WP No. 9461 of 2023


CNR: KAHC010226412023


No order as to costs.

Sd/-
(B.PRAMOD)
JUDGE

BSV
List No.: 1 Sl No.: 1