IIFL Finance Gets Conditional Relief Over Police Freeze Of Its Corporate Account In Online-Fraud Case: Karnataka HC

In brief

The question

1. Whether the petitioner was entitled to relief against the police notice directing a debit-freeze of its bank account.

The court held

The writ petition was disposed of in terms of the directions in W.P. No. 1567 of 2026, subject to the conditions applicable to the petitioner’s case.

It also directed

No order was made as to costs.

01Facts

IIFL Finance Limited challenged a police notice dated 15 April 2023, issued to ICICI Bank under Sections 91 and 92 of the Code of Criminal Procedure, 1973, directing a debit-freeze of the company’s corporate bank account in connection with a cyber-fraud investigation.

p. 3 · ¶ 1

The company stated that its account was used for ordinary lending and collection transactions, while the amount involved in the alleged offence was Rs. 1,98,797.

p. 5 · ¶ 6

The petitioner clarified that its challenge was confined to the police notice.

p. 3 · ¶ 1

The Court had granted interim relief on 27 April 2023.

p. 3 · ¶ 1

02Issues

i.1. Whether the petitioner was entitled to relief against the police notice directing a debit-freeze of its bank account.

p. 3, 5 · ¶ 1, 6

ii.2. Whether the petitioner’s case was governed by the relief granted in the cited precedent concerning a similar issue.

pp. 6–7 · ¶ 8–10

03Law Applied

The impugned notice was stated to have been issued under Sections 91 and 92 of the Code of Criminal Procedure, 1973.

p. 3 · ¶ 1

The Court relied on its order dated 16 October 2026 in Muthoot Finance Limited v. State of Karnataka and Others, W.P. No. 1567 of 2026, which treated the issue before it as covered by the order in Muthoot Finance Limited v. State of Karnataka and Another, W.P. No. 25563 of 2024, affirmed in W.A. No. 1653 of 2024.

pp. 6–7 · ¶ 8

The present judgment does not set out the terms of those directions; it adopts them only to the extent applicable to this case.

p. 7 · ¶ 10

Provisions in the judgment · 3 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 91 Section 92

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 107

04Reasoning

The Court noted that the parties did not dispute that the issue was covered by the order in W.P. No. 1567 of 2026.

p. 7 · ¶ 8–9

As that order relied on a similar order affirmed by a Division Bench, the Court found no justification to take a different view. It therefore extended the benefit of the earlier directions to IIFL Finance, subject to the conditions in that order insofar as applicable.

p. 7 · ¶ 9–10