Karnataka High Court
Iifl Finance Ltd vs State Of Karnataka on 4 February, 2026
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
-1-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 31057 OF 2025 (GM-POLICE)
BETWEEN
IIFL FINANCE LTD.
REGISTERED UNDER THE RESERVE BANK OF INDIA, 1934
HAVING ITS OFFICE AT NO. 4, 1ST FLOOR,
OPP. SHRIKE APARTMENT, 80 FEET OUTER RING ROAD,
KENGERI UPANAGARA, BENGALURU 560 060.
REPRESENT BY ITS AUTHORIZED SIGNATORY
SRI. VASU N
BRANCH MANAGER
... PETITIONER
(BY SRI. ANISH JOSE ANTONY., ADVOCATE)
AND
1. STATE OF KARNATAKA
BY KENGERI POLICE STATION,
MYSORE ROAD, SHIRKE LAYOUT, KENGERI,
BENGALURU 560 060
Digitally signed
by SHWETHA
RAGHAVENDRA 2. MAHESH CHINTHAKAYALA
Location: HIGH BRANCH HEAD,
COURT OF KARUR VYSYA BANK
KARNATAKA
S/O C MADDAIAH,
AGED ABOUT 37 YEARS,
HAVING OFFICE AT KARUR VYSYA BANK,
NO.9, OUTER RING ROAD, OPPOSITE SHIRKE APT,
K.S TOWN, BENGALURU, 560 060
.... RESPONDENTS
(BY SMT. K.P. YASHODHA., AGA FOR R1;
SRI. BALASUBRAHMANYA K.M., ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR
-2-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
DIRECTION TO QUASH THE NOTICE BEARING NO.
KENGERIPS/CRNO-489/2024 ISSUED UNDER SECTION 94 OF THE
BHARATIYA NAGARIK SURAKSHA SANHITA, 2023 DATED 08.10.2025
ISSUED BY RESPONDENT NO. 1 POLICE (HEREINAFTER REFERRED
TO AS THE NOTICE DATED 08.10.2025) (ANNEXURE -A) AND ETC.
THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING
BEEN RESERVED FOR ORDERS ON 15.12.2025, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. Petitioner is before the Court seeking for the
following reliefs:
I. Issue a writ in the nature of Certiorari or any
other appropriate writ, order, or direction to
quash the notice bearing No.
KENGERIPS/CRNO-489/2024 issued under
Section 94 of the Bharatiya Nagarik Suraksha
Sanhita, 2023 dated 08.10.2025 issued by
Respondent No. 1 Police (hereinafter referred
to as "the Notice dated 08.10.2025").
(Annexure A)
II. Issue a writ in the nature of Certiorari or
any other appropriate writ, order, or direction
to quash the notice bearing No.
KENGERIPS/CRNO-489/2025 issued under
Section 94 of the Bharatiya Nagarik Suraksha
Sanhita, 2023 dated 09.10.2025 issued by
Respondent No. 1 Police (hereinafter referred
to as "the Notice dated 09.10.2025").
(Annexure B)
III. Issue a writ in the nature of Certiorari or
any other appropriate writ, order, or direction
-3-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
to quash the notice bearing No.
KENGERIPS/CRNO-489/2025 issued under
Section 94 of the Bharatiya Nagarik Suraksha
Sanhita, 2023 dated 09.10.2025 issued by
Respondent No. 1 Police (hereinafter referred
to as "the Notice dated 09.10.2025").
(Annexure C)
IV. Pass such other and further order(s) or
direction(s) as this Hon'ble Court may deem fit
and proper in the facts and circumstances of
the case and in the interest of Justice.
2. The Petitioner lodged a complaint alleging that the
accused, Smt. Ashwini, had been employed with
Karur Vysya Bank, Kengeri Branch, since the year
2022 and was functioning as Assistant Manager as
well as Customer Service Officer / Jewellery Loan
Officer. It is stated that during a surprise re-
appraisal conducted on 06.10.2025 and 07.10.2025,
serious irregularities were detected in relation to gold
loan accounts handled by the said Smt. Ashwini.
Upon verification, it was allegedly found that she had
indulged in acts amounting to theft and criminal
breach of trust, by clandestinely removing genuine
gold ornaments pledged by customers and replacing
-4-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
them with spurious articles. Such fake articles were
found in 34 gold loan packets, involving
approximately 3.398 kilograms of gold ornaments,
valued at around ₹3 crores, on the basis of which the
complainant Bank had disbursed loans aggregating
to ₹1.73 crores. It is further alleged that 17 jewel
loan packets were found missing altogether, which
were stated to contain approximately 1.557
kilograms of gold ornaments, valued at about ₹1.5
crores, in respect of which loans to the tune of
₹89.01 lakhs had been sanctioned and disbursed.
3. On the basis of the said complaint, an FIR in Crime
No.0489/2025 came to be registered for offences
punishable under Sections 316(2), 316(5) and
318(4) of the Bharatiya Nagarik Nyaya Sanhita, 2023
(hereinafter referred to as "BNNS").
4. The Petitioner asserts that it is a leading financial
services institution engaged in providing a diverse
range of credit facilities, including home loans, gold
-5-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
loans, business loans and loans against property,
catering to both retail and corporate customers. It is
stated that every loan is sanctioned only after due
scrutiny and verification of the pledged security,
including gold articles. Each borrower is allotted a
unique customer identification number, and for every
individual loan transaction, a separate loan account
is maintained.
5. It is further contended that Smt. Ashwini and her
husband, Sri. Ravi Naik, had initially approached the
Petitioner in the year 2022 and availed a gold loan,
which was duly repaid within the stipulated period,
upon which the pledged gold ornaments were
returned to Smt. Ashwini. Thereafter, on 04.10.2024,
Smt. Ashwini again approached the Petitioner for
availing a gold loan by pledging gold ornaments.
After following the prescribed procedure and
scrutinising the pledged articles, the Petitioner
sanctioned and disbursed the loan on the said date.
-6-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
6. Subsequently, Smt. Ashwini and her husband
approached the Petitioner on multiple occasions to
avail further loans against the pledge of gold
ornaments. Taking into account the prior
transactions and the alleged long-standing
relationship, the Petitioner accepted the pledged gold
and sanctioned loans after conducting what is stated
to be due scrutiny and verification.
7. A tabular statement placed on record indicates that
Smt. Ashwini availed loans aggregating to
₹61,76,822/-, while Sri. Ravi Naik availed loans to
the extent of ₹11,24,400/-. The Petitioner claims
that it bona fide believed the said borrowers to be
genuine and trustworthy and expected them to
honour their financial obligations by clearing the
outstanding dues and redeeming the pledged gold.
8. On 08.10.2025, Respondent No.1 - Kengeri Police
Station issued a notice under Section 94 of the
Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)
-7-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
calling upon the Manager of the Petitioner-institution
to furnish bank account statements and KYC
documents pertaining to Smt. Ashwini and Sri. Ravi
Naik in connection with Crime No.489/2025.
Subsequently, on 09.10.2025, two separate notices
under Section 94 of BNSS, 2023 were issued,
directing the Manager of the Petitioner to appear in
person on 10.10.2025 and to furnish details relating
to the dates of pledge, quantity and value of gold
pledged, documents submitted by the borrowers at
the time of availing the loans, loan account
particulars, and documents obtained at the time of
sanction. The Petitioner was also directed to produce
the gold articles pledged by Smt. Ashwini and Sri.
Ravi Naik for the purpose of investigation.
9. It is asserted that only upon receipt of the said
notices did the Petitioner become aware of the
alleged fraudulent activities of the accused. It is
contended that if the pledged gold is handed over
-8-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
and seized by the investigating agency, the Petitioner
would be left without any subsisting security in
respect of the outstanding loan amounts. It is in this
factual background that the Petitioner has
approached this Court seeking the above reliefs.
10. Subsequently, the Petitioner filed an amendment
application in I.A. No.1/2025, which came to be
allowed by order dated 15.12.2025. Pursuant
thereto, the Petitioner gave up the reliefs originally
sought at Sl. Nos. (i), (ii) and (iii) and confined the
challenge only to the reliefs as modified by way of
the amendment.
11. Sri. Anish Jose Antony, learned counsel appearing for
the Petitioner submits that,
11.1. It is contended that there is no dispute
regarding the commission of offences by the
accused persons, which attract the penal
provisions under Sections 316(2), 316(5) and
318(4) of the Bharatiya Nagarik Nyaya Sanhita,
-9-
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
2023. However, it is urged that the Petitioner is
a secured creditor, having advanced loans to
the accused persons aggregating to
₹73,01,222/-, against which gold ornaments
were pledged as security. It is submitted that
as on 09.10.2025, the outstanding dues stood
at ₹85,59,000/-. Learned counsel would submit
that if the pledged gold articles are seized by
Respondent No.1, the Petitioner would be
divested of its security and rendered
remediless, thereby frustrating its right to
recover the loan amount. Emphasis is placed on
the fact that the loans were sanctioned strictly
on the basis of the assessed value of the
pledged gold and, therefore, the Petitioner's
financial and proprietary interest in the said
articles deserves protection.
11.2. It is further contended that the Petitioner, being
a bona fide financier, accepted the pledged gold
- 10 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
in good faith and disbursed the loan amounts
only after conducting due scrutiny and
verification in the ordinary course of business.
11.3. In so far as the investigation is concerned,
learned counsel submits that the Petitioner is
fully prepared to cooperate with the
investigating agency by furnishing all requisite
documents and particulars relating to the
pledged gold articles, subject to the condition
that the said gold is not seized.
11.4. The notice issued under Section 94 of the
Bharatiya Nagarik Suraksha Sanhita, 2023 is
vitiated by malice and ulterior motive, and that
its continuance would amount to a gross abuse
of the process of law.
11.5. No seizure can be effected without strict
compliance with the procedure contemplated
under Section 107 of the BNSS, 2023. Any such
seizure, according to learned counsel, would
- 11 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
violate the Petitioner's fundamental right to
carry on trade and business under Article
19(1)(g), the right to life and livelihood under
Article 21, and the constitutional protection of
property under Article 300A of the Constitution
of India.
11.6. On the basis of these submissions, it is
submitted that the amended reliefs sought by
the Petitioner deserve to be granted.
11.7. In this regard, he relies upon the decision of
this court dated 14.10.2025 in WP No.30942 of
2025 [FEDBANK FINANCIAL SERVICES LTD.
-vs- STATE OF KARNATAKA AND OTHERS],
more particularly para 5 thereof, which is
reproduced hereunder for easy reference:
"5. The petitioner, in my considered opinion,
cannot have such a grievance in view of Section
107(1) of the Bharatiya Nagarik Suraksha Sanhita,
2023. Inasmuch as if any seizure is to be made of
any stolen article, necessary application would
have to be made before the learned Magistrate and
permission obtained. That being so, respondents
cannot seize any article without such permission
being obtained."
- 12 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
11.8. By relying on the decision in Fedbank
Financial Services Ltd's case, he submits
that for any action to be taken under Section
107, orders from the jurisdictional magistrate
are essential. Without such an order, no
seizure can be made. He therefore submits
that the procedure under Section 107 is
required to be followed.
11.9. On all the above basis he submits that the writ
petition is required to be allowed.
12. Sri.Balasubrahmanya.K.M, learned counsel for the
respondent No.2 submits that,
12.1. The gold articles pledged with the Petitioner
constitute stolen property, belonging to the
customers of Respondent No.2. Consequently,
it is urged that Respondent No.2 is under a
legal obligation to restore the said gold to its
customers. The Petitioner, therefore, cannot
- 13 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
assert any right, whether by way of security
interest or otherwise, over gold that is alleged
to be stolen property.
12.2. It is further submitted that Respondent No.2
had verified the ownership and authenticity of
the gold articles prior to sanctioning jewel loans
to its customers, whereas the Petitioner failed
to undertake such verification and nonetheless
proceeded to disburse loans against the said
gold.
12.3. The Petitioner, having received stolen goods
and advanced loans on the basis of such stolen
property, is not entitled to any protection as
sought for in the writ petition, including the
reliefs claimed pursuant to the amendment
application.
12.4. In this regard, he relies upon the decision of
this Court in Muthoot Finance Limited, rep
by its Authorised Officer Sri. Ajumon P.
- 14 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
George vs. State of Karnataka by its
Secretary and Another1, more particularly
para 9 thereof, which is reproduced hereunder
for easy reference:
9. In that view of the matter, directing the
petitioner to co-operate with the Investigating
Officer and make available all the details relating to
the pledge as also permit the inspection of the gold,
which if required the Investigation Officer can take
receipt of and deposit with the Court seized of the
matter, on coming to the conclusion that the said
gold is stolen, it is made clear that the police officer
cannot retain the gold in his possession, but would
have to deposit the same with the court seized of
the matter. The court seized of the matter while
considering any application for release of the gold
or at the time when the court were to pass an order
of release for any reason whatsoever, would have
to issue notice to the Petitioner and afford an
opportunity of hearing to the petitioner before
ordering the release. With the above observations,
the writ petition stands disposed of.
12.5. He also relies upon another decision of this
Court in Muthoot Money Limited, Rep by its
Authorised Officer and Assistant Manager in
Charge Mr. Hanamantha Yallappa
Girijannavar vs. State of Karnataka, By its
1
2024 SCC Online Karnataka 2531
- 15 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
Secretary, Home Department2, more
particularly para 8, 9 and 11 thereof, which are
reproduced hereunder for easy reference:
8. The High Court of Madras in MUTHOOT FINCORP
LIMITED v. INSPECTOR OF POLICE2, has held as
follows:
".... .... ....
13. It is seen that the accused was arrested by the
1st respondent Police, the accused gave confession.
In his confession, he disclosed about the pledging of
jewels with the petitioners, which were stolen by him
from the house of the 2nd respondent. The accused
gave the bill particulars of the jewels, which were
pledged with the petitioners and the bill particulars.
Thereafter, the 1st respondent Police issued
summons on 11.08.2015 as per law. The petitioners
are duty bound to produce the book of account,
records, files and documents, which are necessary for
investigation. Once it is proved that the jewels are
stolen, the same are to be delivered to the police, if it
is required.
14. In view of the same, the petitioners cannot raise
any objection for issuance of summons and
production of books and jewels. If the petitioners are
aggrieved and feel that they have right over the
properties, they can approach the concerned Court,
to safeguard and secure their rights by filing
appropriate petition. If the petitioners or any other
person filed a petition seeking interim custody of the
jewels, the concerned Court to issue notice to them
and after enquiry to pass appropriate orders.
2
2025 SCC Online Kar 10077
- 16 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
15. With the above observation, this Criminal Original
Petition is disposed of. In view of the long pendency
of FIR, the 1st respondent Police is to file a charge
sheet within two months from the date of receipt of a
copy of this order, before the concerned Court. The
concerned Court is to conclude the trial within a
period of three months from the date of filing of
charge sheet. Consequently, the connected Criminal
Miscellaneous Petition is closed."
(Emphasis supplied)
9. Another coordinate bench in the case of MUTHOOT
FINANCE LIMIED v. STATE OF KARNATAKA3, has held
as follows:
".... .... ....
7. During investigation, the Investigating Officer
would be required to ascertain various aspects
including the ownership of the said gold and it is for
the Court seized of the matter to decide as to in
whose favour the gold has to be returned, if an
application under Section 454 of the earlier Code of
Criminal Procedure and now Section 500 of the BNSS
were to be filed. Of course, at that time the petitioner
can always place its rights and claims before the said
Court for being decided. The true owner of the gold
cannot be deprived of the use of the gold, merely
because the same is pledged with a gold finance
company after being stolen from such true owner.
The Gold Finance Company is vested with a duty to
carry out proper due diligence before accepting the
gold as a pledge for a loan disbursed.
8. There are innumerable matters coming up before
this court where stolen gold is pledged with a gold
finance company. I'am of the considered opinion that
this aspect would have to be examined by the
concerned authorities and proper guidelines have to
be formulated in relation to such pledging of gold,
- 17 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
ascertainment of ownership, identity of the person
pledging the gold, implication of pledging stolen gold,
manner of dealing with such gold when criminal
proceedings are taken up etc.,. Therefore, I request
the Law Commission, Karnataka to look into this
matter and formulate necessary guidelines/rules or
the like as deemed fit.
9. In that view of the matter, directing the petitioner
to co-operate with the Investigating Officer and make
available all the details relating to the pledge as also
permit the inspection of the gold, which if required
the Investigation Officer can take receipt of and
deposit with the Court seized of the matter, on
coming to the conclusion that the said gold is stolen,
it is made clear that the police officer cannot retain
the gold in his possession, but would have to deposit
the same with the court seized of the matter. The
court seized of the matter while considering any
application for release of the gold or at the time when
the court were to pass an order of release for any
reason whatsoever, would have to issue notice to the
Petitioner and afford an opportunity of hearing to the
petitioner before ordering the release. With the above
observations, the writ petition stands disposed of."
(Emphasis supplied)
The coordinate bench holds that the true owner of the
gold cannot be deprived of the use of gold, merely
because it is pledged with the finance company. The
petitioner can approach the concerned trial Court
seized of the matter and file an application under
Sections 451 and 457 of the Cr.P.C. and place its
rights and claims before the said Court.
11. In the light of the law laid down by the
coordinate benches and the division bench of other
High Court, the unmistakable inference is non-
- 18 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
entertainment of petition qua the prayer that is
sought. It is for the petitioner at every instance to
knock at the doors of the concerned Court by filing
applications for release of gold. In the event of such
an application is filed, the concerned Court in
consonance with the principles of natural justice,
shall pass necessary orders in accordance with law.
Except the aforesaid observation, no other prayer of
the petitioner would merit consideration.
12.6. By placing reliance on the aforesaid judgments,
it is submitted that this Court has, in
comparable fact situations, disposed of similar
petitions by directing the petitioners therein to
cooperate with the investigating agency, furnish
all particulars relating to the pledge
transactions, and permit inspection of the gold
articles. It is further submitted that, where the
circumstances so warranted, this Court has
recognised the authority of the investigating
officer to take custody of the gold articles, issue
a proper receipt, and deposit the same before
the jurisdictional court seized of the matter.
Upon completion of the trial, and subject to a
- 19 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
finding that the gold constitutes stolen
property, the court concerned would be
competent to pass such orders as the ends of
justice may require.
12.7. On the aforesaid premises, it is contended that
the Petitioner cannot legitimately raise any
grievance with respect to the notice issued
under Section 94 of the Bharatiya Nagarik
Suraksha Sanhita, 2023, and is bound to
comply with the same by furnishing the details
sought for therein.
13. Smt.K.P.Yashodha, learned AGA appearing for
respondent No.1-investigating officer submits that,
13.1. Pursuant to the lodging of the complaint, Crime
No.489/2025 came to be registered, whereupon
investigation was lawfully commenced. In the
course of such investigation, it was revealed
that the accused had pledged gold articles,
- 20 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
allegedly stolen from Karur Vysya Bank -
Respondent No.2, with the Petitioner.
13.2. In this factual backdrop, the investigating
agency found it necessary to call upon the
Petitioner to furnish various particulars and
details relevant to the pledge transactions and
the gold articles in question.
13.3. Learned counsel submits that the Petitioner is
under a statutory obligation to cooperate with
the investigation and to make available all
relevant information and materials sought by
the investigating officer.
13.4. It is contended that the Petitioner, being in
possession of property alleged to be stolen,
cannot claim any exemption from the
investigative process. If, upon investigation,
the gold articles are found to be stolen
property, they are liable to be restored to the
rightful owner. The pledgers being accused
- 21 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
persons in the aforesaid crime, and having no
lawful title over the gold, could not have
conveyed a better right or interest in favour of
the Petitioner by pledging such stolen property.
13.5. It is further submitted that, at this stage, the
gold articles are required to be produced before
the investigating officer to enable verification
and completion of the investigation in
accordance with law. Without production of the
gold articles, the factum of theft cannot be
effectively established, and the investigation
would be rendered incomplete. It is for this
reason that the production of the gold articles
has been lawfully sought by Respondent No.1.
14. Heard Sri.Anish Jose Antony, learned counsel for the
petitioner, Smt.K.P.Yashoda, learned AGA for
respondent No.1 and Sri.Balasubrahmanya.K.M,
learned counsel for respondent No.2. Perused
papers.
- 22 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
15. The points that would arise for consideration are;
1. Whether during the process of investigation,
the allegation being that stolen gold has
been pledged with the petitioner, the
petitioner can have any grievance as regards
the notice issued under Section 94 of the
BNSS?
2. Whether the petitioner can have any reason,
justification or the like for non-production of
the alleged stolen gold articles before the
investigating officer?
3. Whether the investigating officer can seize
the gold articles during the course of
investigation and as regards which, can the
petitioner have any objection?
4. What order?
16. I answer the above points as follows:
17. Answer to point No.1: Whether during the
process of investigation, the allegation being
that stolen gold has been pledged with the
petitioner, the petitioner can have any
grievance as regards the notice issued under
Section 94 of the BNSS?
17.1. Section 94 of the BNSS is reproduced
hereunder for easy reference:
94. Summons to produce document or other
thing: (1) Whenever any Court or any officer in
- 23 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
charge of a police station considers that the
production of any document, electronic
communication, including communication devices
which is likely to contain digital evidence or other
thing is necessary or desirable for the purposes of
any investigation, inquiry, trial or other proceeding
under this Sanhita Appeal from order rejecting
application for restoration of attached property.
Issue of warrant in lieu of, or in addition to,
summons. Power to take bond for appearance.
Arrest on breach of bond for appearance.
Provisions of this Chapter generally applicable to
summoneses and warrants of arrest. Summons to
produce document or other thing. 5 10 15 20 25
30 35 40 45 27 by or before such Court or officer,
such Court or officer may, by a written order,
either in physical form or in electronic form,
require the person in whose possession or power
such document or thing is believed to be, to attend
and produce it, or to produce it, at the time and
place stated in the summons or order.
(2) Any person required under this section merely
to produce a document, or other thing shall be
deemed to have complied with the requisition if he
causes such document or thing to be produced
instead of attending personally to produce the
same.
(3) Nothing in this section shall be deemed--
(a) to affect sections 129 and 130 of the Bharatiya
Sakshya Adhiniyam, 2023 or the Bankers' Books
Evidence Act, 1891; or
(b) to apply to a letter, postcard, or other
document or any parcel or thing in the custody of
the postal authority.
17.2. A plain and purposive reading of sub-section
(1) of Section 94 makes it manifest that
whenever a Court or an officer in charge of a
- 24 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
police station forms an opinion that the
production of any document, electronic
communication, or other thing is necessary or
desirable for the purposes of any investigation,
inquiry, trial or other proceeding under the
Sanhita, such authority is empowered to issue a
written order requiring the person in whose
possession or control such material is believed
to be, to produce the same at the specified time
and place.
17.3. The provision is deliberately worded in broad
terms to ensure that investigation into
cognisable offences is not thwarted by technical
objections or premature assertions of civil or
contractual rights.
17.4. Sub-section (2) of Section 94 further clarifies
that where a person is required merely to
produce a document or thing, compliance is
complete upon such production, even without
- 25 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
personal appearance. Section 94, therefore,
contemplates a limited but essential
investigative power, namely, requisition for
production, which is conceptually and legally
distinct from seizure, attachment, or
confiscation.
17.5. In the present case, it is not in dispute that
Smt. Ashwini and Sri. Ravi Naik pledged gold
articles with the Petitioner. While the Petitioner
has produced a statement indicating the
amounts disbursed, the said statement
conspicuously omits critical particulars such as:
17.5.1. The dates of pledge,
17.5.2. The quantity and description of gold
pledged,
17.5.3. Verification made by the petitioner at the
time of each pledge, and
17.5.4. the identifying features of the gold
articles.
- 26 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
17.6. Crime No.489/2025 has been registered by the
Kengeri Police Station for offences under
Sections 316(2), 316(5) and 318(4) of the
BNSS, which relate to grave economic offences
involving breach of trust, cheating, and
misappropriation. The notice issued under
Section 94 is directly traceable to the need to
investigate whether the gold pledged with the
Petitioner is the same gold allegedly stolen from
the customers of Respondent No.2.
17.7. The notice issued in so far as Smt.Ashwini is
concerned, is reproduced hereunder for easy
reference:
ೕ ೋ ೕ
(ಕಲಂ: 94 .ಎ .ಎ .ಎ -2023 ೕ ಾ )
ಈ ಮೂಲಕ ಮ ೆ ಯಪ ಸುವ ೇ ೆಂದ"ೆ # ಾಂಕ: 07.10.2025
$%ಾ&ದು ಾರ"ಾದ ()ೕ. ಮ*ೇ+ ,ಂತಕ%ಾಲ .. /ಾದಯ , 37 ವಷ&,
1ಾ)ಂ2 *ೆ3, ಕರೂರು 4ೈಶ 1ಾ ಂ7, 8ೆಂ ೇ 1ೆಂಗಳ;ರು ರವರು ೕ ದ ದೂ ನ
- 27 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
=ೕ"ೆ ೆ >.ಸಂ: 489/2025 ಕಲಂ: 316(2), 316(5), 318(4) .ಎ .ಎ
ೕ ಾ ಪ)ಕರಣ ಾಖAಾB ತ Cೆಯ DರುತE ೆ.
ಈ ಪ)ಕರಣದ ಎ| ಆ"ೋ$ ೆ ()ೕಮ ಅ(H ಎಂ ರI ಾಯ7. 34 ವಷ&, ನಂ
1713, ಮ ೆ ನಂ 102, ಸ*ಾ #) ಅJಾK& =ಂK, MೊNೆOನಹ Q, ಸR ಎಂ
ISೆHೕಶHರಯ AೇಔK, 1ೆಂಗಳ;ರು-56 >.ನಂ 9739894011 ರವರು ಕರೂರು
4ೈಶ 1ಾ ಂ7 8ೆಂ ೇ 1ಾ)ಂ2 ನ D ಅ.MೆUಂK /ಾ ೇಜR ಆB 8ೆಲಸ
/ಾಡು EದುX ಸದ ಆ"ೋ$ ೆಯು ಕರೂರು 4ೈಶ 1ಾ ಂ7ನ D ಾ)ಹಕರು B I ಇಟU
,ನ[ದ ವಡ4ೆಗಳನು[ ದುರುಪ\ೕಗಪ .8ೊಳ]Qವ ಉ ೆXೕಶ#ಂದ ಾ)ಹಕರು BರI
ಇಟU ಅಸ ,ನ[ದ ವಡ4ೆಗಳ ಬದ ೆ ನಕ ,ನ[ದ ವಡ4ೆಗಳನು[ ಇಟುU ಅಸ
,ನ[ದ ವಡ4ೆಗಳನು[ ೆ ೆದು8ೊಂಡು ಮ` 1ಾ)ಂ2 ನ D BರI ಇ Uರುವ ಬ ೆa
IbಾರNೆ 4ೇcೆ .ರು ಾE"ೆ.
ಈ ಪ)ಕರಣ8ೆd ಸಂಬಂ#.ದಂ ೆ ಈ 8ೆಳಕಂಡಂ ೆ /ಾe / ಾಖAೆ/,ನ[ದ
ವಡ4ೆಗcೆ; ಂ# ೆ ತ Cೆ ೆ *ಾಜ"ಾಗಲು ಸೂ,. ೆ.
1) ಆ"ೋ$ ೆ ಅ(H ಎಂ ರವರು ತಮ` Jೈ ಾ f ನ D %ಾವ #ನ#ಂದು ,ನ[ದ
ವಡ4ೆಗಳನು[ BರI ಇ Uರು ಾE"ೆ ? ಎಷುU ,ನ[ದ ವಡ4ೆಗಳನು[ BರI ಇಟುU ಎಷುU
ಹಣ ಪgೆದು8ೊಂ ರು ಾE"ೆ ? Aೋ ಸಮಯದ D ೕ ರುವ ಾಖAೆಗಳನು[ Aೋ
ಅ8ೌಂK ೕiೆjf ಅನು[ ೕಡುವ ದು.
2) Aೋ ಹಣವನು[ ಆ"ೋ$ ೆಯ %ಾವ ಅ8ೌಂK ೆ ಹಣ ವ ಾ&ವNೆ
/ಾ ರು E ಎಂಬ ಬ ೆa /ಾe ೕಡುವ ದು
3) ಆ"ೋ$ ೆ ಅ(H ಎಂ ರವರು ಮ` 1ಾ)ಂ2 ೆ ,ನ[ದ ವಡ4ೆಗಳನು[ BರI
ಇಡಲು ಬಂದ ಸಮಯದ .. I ಪ iೆk /ಾe ೕಡುವ ದು.
4) ಆ"ೋ$ ೆ ಅ(H ಎಂ ರವರು ತಮ` 1ಾ)ಂ2 ನ D BರI ಇ Uರುವ ,ನ[ದ
ವಡ4ೆಗಳ] ಕರೂರು 4ೈಶ 1ಾ ಂ7 8ೆಂ ೇ 1ಾ)ಂ2 ನ D ಾ)ಹಕರು BರI ಇ UದX
,ನ[ದ ವಡ4ೆಗcಾBರುವ ದ ಂದ ಸದ ,ನ[ದ ವಡ4ೆಗಳನು[ ತ Cೆ ಸಲು4ಾB
*ಾಜರುಪ ಸುವ ದು.
- 28 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
ಈ =ೕಲdಂಡಂ ೆ 8ೇ ರುವ /ಾe ಯನು[, ದೃ ೕಕ .ದ ಾಖAೆಗಳನು[ *ಾಗೂ
ಆ"ೋಗ ಅ( ಎಂ ರವರು BರI ಇ ರುವ ,ನ[ದ ವಡ4ೆಗcೆ; ಂ# ೆ # ಾಂಕ 10-
10-2025 ರಂದು Aೋಕ 10-00 ಗಂiೆ ೆ ಈ 8ೆಳ ೆ ಸe /ಾ ರುವ
ತ Cಾm8ಾ %ಾದ ನನ[ ಮುಂ ೆ 8ೆಂ ೇ ೕಯ nಾNೆಯ D *ಾಜ"ಾB ತ Cೆ ೆ
ಸಹಕ ಸಲು ಈ ಮೂಲಕ ಮ ೆ ಸೂ,. ೆ.
(ಈಶHR 1ೆ ವಣೂOರ)
ೕ ಸo ಇ f JೆಕUR
8ೆಂ ೇ ೕ
17.8. A perusal of the notice demonstrates that
Respondent No.1 has sought:
17.8.1. details of the pledge transactions,
17.8.2. loan account particulars,
17.8.3. CCTV footage capturing the act of
pledge, and
17.8.4. production of the gold articles
themselves.
17.9. These requisitions are very much required for
investigation and cannot be characterised as
excessive or extraneous.
- 29 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
17.10. At this stage, it bears emphasis that the true
victims of the alleged offence are the customers
of Respondent No.2, whose gold ornaments,
often accumulated through years of savings,
inheritance, or familial hardship, are alleged to
have been surreptitiously replaced or
misappropriated. Gold ornaments, particularly
in the Indian social context, are not mere
commercial commodities; they frequently
represent:
17.10.1. matrimonial security,
17.10.2. family heirlooms,
17.10.3. emergency savings, and
17.10.4. assets pledged in times of acute financial
distress.
17.11. The continued deprivation of such gold causes
real and continuing suffering to the true
owners, both economic and emotional. The
- 30 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
criminal justice system, while safeguarding
procedural fairness, cannot lose sight of the
fact that investigation into such offences is
ultimately directed towards restoration of
property to its rightful owners and vindication
of their rights.
17.12. If the gold articles alleged to be stolen are not
produced before the investigating officer, the
investigation would be rendered sterile. The
identity of the gold, its correspondence with the
stolen articles, and the chain of custody cannot
be established through documents alone.
Without such verification, the suffering of the
true owners would be prolonged, and the
possibility of restitution effectively foreclosed.
17.13. The apprehension expressed by the Petitioner
that production of the gold would result in loss
of its security interest is, at this juncture,
misplaced. The notice issued under Section 94
- 31 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
does not order seizure, attachment, or disposal.
It merely seeks production for the purpose of
investigation. Any subsequent step, such as
seizure under Section 107, would necessarily
have to be taken strictly in accordance with law
and subject to judicial oversight.
17.14. More importantly, the Petitioner's asserted
security interest, even if assumed to exist
contractually, cannot override the superior
claim of the true owner of stolen property. A
pledge created by an accused person who had
no lawful title to the gold cannot defeat the
rights of the original owner, nor can it impede a
lawful criminal investigation.
17.15. The balance of convenience and justice,
therefore, lies decisively in favour of permitting
the investigation to proceed unhindered. The
criminal process cannot be stalled on the basis
of speculative commercial prejudice,
- 32 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
particularly when such stalling would
perpetuate the suffering of innocent victims
whose property has allegedly been stolen.
17.16. Where, in the course of investigation into
cognisable offences involving theft and criminal
breach of trust, gold articles alleged to be
stolen are found to have been pledged with a
third party, such gold constitutes the subject-
matter of investigation and falls within the
expression "other thing" under Section 94(1) of
the Bharatiya Nagarik Suraksha Sanhita, 2023.
An investigating officer is, therefore, statutorily
empowered to issue a notice requiring
production of such gold and connected records
from the person in whose possession the same
is believed to be.
17.17. A notice issued under Section 94 BNSS merely
facilitates investigation by requiring production
and does not, by itself, amount to seizure,
- 33 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
attachment, or adjudication of proprietary
rights. Consequently, the recipient of such
notice cannot claim any legally sustainable
grievance on the basis of apprehended loss of
security interest, commercial prejudice, or
competing civil claims. The investigative
necessity to verify the identity, origin, and
ownership of alleged stolen property, and to
enable eventual restitution to the true owners,
prevails over contractual or financial interests
of the person in possession.
17.18. Accordingly, I answer Point No.1 by holding
that the Petitioner has no legally sustainable
grievance against the notice issued under
Section 94 of the Bharatiya Nagarik Suraksha
Sanhita, 2023. The notice is within the
statutory competence of the investigating
officer, is reasonable in scope, and is
indispensable for effective investigation into the
- 34 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
alleged theft and for eventual restoration of
property to the rightful owners. The Petitioner
is bound to comply with the said notice in
accordance with law.
18. Answer to point No.2: Whether the Petitioner
can have any reason, justification or the like for
non-production of the alleged stolen gold
before the investigation officer?
18.1. From the discussion and findings recorded while
answering Point No.1, it stands conclusively
established that the gold articles pledged with
the Petitioner are alleged to be stolen property
and constitute the core subject-matter of Crime
No.489/2025. The Petitioner admittedly
remains in possession of the said gold by virtue
of pledge transactions entered into with the
accused persons. Once such possession is
admitted, the Petitioner is legally and
statutorily bound to submit to the investigative
process and produce the property before the
- 35 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
investigating officer when lawfully called upon
to do so.
18.2. At the outset, this Court finds no merit in the
Petitioner's attempt to characterise itself solely
as a "secured creditor" and thereby claim
immunity from criminal investigation. Criminal
law does not recognise contractual status as a
shield against investigation. The moment
property in possession is alleged to be stolen,
the nature of the possession ceases to be
purely civil or commercial and becomes subject
to criminal scrutiny.
18.3. The plea of the Petitioner that it is a bona fide
lender acting in the ordinary course of business
does not confer any legal justification for non-
production. Bona fides, if any, are not
presumed; they must be demonstrated through
conduct. The only legally recognised manner in
which such bona fides can be established is by
- 36 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
unconditional cooperation with the
investigation, including production of the
alleged stolen property. Any reluctance,
resistance, or conditional compliance directly
undermines the claim of good faith.
18.4. The argument that the gold constitutes security
for recovery of loan dues is wholly untenable in
criminal law. A pledge created by a person who
had no lawful title to the property is void
against the true owner. A pledgee cannot
acquire a better right than that possessed by
the pledger. Therefore, even assuming the
Petitioner acted without knowledge of theft,
such absence of knowledge does not elevate its
contractual interest above:
18.4.1. the statutory power of investigation, or
18.4.2. the proprietary right of the true owner.
- 37 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
18.5. Security interest is a creature of contract;
investigation into theft is a mandate of statute.
The latter unquestionably prevails.
18.6. The Petitioner's apprehension that production of
the gold would result in loss of security or
commercial prejudice is legally irrelevant at the
stage of investigation. Criminal procedure is not
subordinated to commercial convenience. The
BNSS does not recognise "financial exposure"
or "loan recovery difficulty" as valid grounds to
withhold stolen property from investigation.
18.7. Moreover, the notice under Section 94 BNSS
does not effect seizure, attachment, or
confiscation. It merely calls for production. Any
subsequent action, if warranted, must follow
Section 107 BNSS and would remain subject to
judicial oversight. Thus, the Petitioner's plea of
irreversible prejudice is speculative and
premature.
- 38 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
18.8. The constitutional objections raised or implied
by the Petitioner, whether under Article
19(1)(g), Article 21, or Article 300A, are
equally devoid of substance. Reasonable
restrictions in aid of criminal investigation are
well-recognised exceptions to all three
provisions. Production of property pursuant to
statutory notice:
18.8.1. does not infringe the right to trade,
18.8.2. does not violate life or personal liberty,
and
18.8.3. does not amount to deprivation of
property without authority of law.
18.9. On the contrary, refusal to comply would
amount to obstruction of justice, which enjoys
no constitutional protection.
18.10. The contention that the Petitioner should be
permitted to retain possession until
- 39 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
adjudication of civil rights is fundamentally
misconceived. Criminal investigation precedes
civil adjudication, not vice-versa. Determination
of ownership, restitution, or competing claims
can arise only after investigation establishes
whether the gold is stolen and identifies its
rightful owner. Allowing the Petitioner to retain
possession pending such determination would:
18.10.1. impede investigation,
18.10.2. perpetuate deprivation of the true
owners, and
18.10.3. create a perverse incentive to convert
stolen property into pledged assets.
18.11. Equally untenable is any implied suggestion
that the Petitioner is a neutral third party
entitled to special protection. Once a person is
found to be in possession of property alleged to
be stolen, such person stands in the position of
- 40 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
a receiver of stolen property for investigative
purposes, irrespective of intent. Continued
possession coupled with refusal to produce may
expose such person to further legal
consequences. Criminal law does not
countenance selective cooperation.
18.12. This Court must also emphasise the suffering
and continuing prejudice of the true owners of
the gold. The victims, customers of Respondent
No.2, have already been deprived of their gold
through alleged criminal acts involving breach
of trust. Many such ornaments represent
lifetime savings, matrimonial security, or
ancestral property. Any delay in production of
the gold prolongs their hardship and frustrates
the core objective of criminal law, namely,
restitution and restoration.
- 41 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
18.13. The interests of an institutional lender, however
legitimate in the civil sphere, cannot outweigh
the rights of innocent victims of crime.
18.14. Finally, permitting non-production on grounds
urged by the Petitioner would set a dangerous
precedent whereby stolen property could be
immunised from investigation merely by being
routed through financial institutions. Such an
outcome would strike at the very root of
criminal justice administration and cannot be
countenanced by this Court.
18.15. A person or institution in possession of property
alleged to be stolen, including a gold loan
company holding such property by way of
pledge, has no legal right to refuse or delay
production of the property when lawfully
required by the investigating officer under
Section 94 of the Bharatiya Nagarik Suraksha
Sanhita, 2023. The statutory power to require
- 42 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
production of a "thing" necessary or desirable
for investigation prevails over all contractual,
commercial, or equitable claims, including a
pledgee's asserted security interest.
18.16. A pledge created by an accused who had no
lawful title cannot confer a better right upon the
pledgee than that possessed by the pledger,
and such contractual arrangements cannot
impede criminal investigation or defeat the
superior claim of the true owner of stolen
property. Claims of bona fide lending,
apprehended financial loss, or pending civil
rights do not constitute lawful justification for
non-production of alleged stolen property.
18.17. Production of property under Section 94 BNSS,
being investigatory in nature and not
amounting to seizure or deprivation of
property, does not violate Articles 19(1)(g), 21,
or 300A of the Constitution. Refusal to produce
- 43 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
alleged stolen property obstructs investigation
and prolongs deprivation suffered by the true
owners, whose restitution is a fundamental
objective of criminal law.
18.18. Accordingly, I answer Point No. 2 by holding
that the Petitioner has absolutely no reason,
justification, or lawful basis to refuse, delay, or
condition the production of the alleged stolen
gold before the investigating officer. All
contentions founded on security interest,
contractual rights, bona fides, constitutional
protections, or commercial hardship are hereby
rejected. The Petitioner is under a clear
statutory obligation to comply with the notice
issued under Section 94 of the Bharatiya
Nagarik Suraksha Sanhita, 2023, and to
produce the gold articles forthwith for the
purposes of investigation and eventual
- 44 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
restitution to the rightful owners, in accordance
with law.
19. Answer to Point No.3: Whether the
investigation officer can seize the gold articles
during the course of investigation and as
regards which, can the Petitioner have any
objection?
19.1. The apprehension expressed by the Petitioner is
that upon production of the gold articles
pursuant to the summons issued under Section
94 of the Bharatiya Nagarik Suraksha Sanhita,
2023, the same would be seized by Respondent
No.1. This apprehension, though projected as a
grievance, in fact underscores the very purpose
of criminal investigation where property alleged
to be stolen is traced and recovered.
19.2. At the outset, it is necessary to reiterate that a
summons under Section 94 merely facilitates
production and does not by itself authorise or
effect seizure. The power of seizure is
independently traceable to Section 106 of the
- 45 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
BNSS, which operates at a subsequent and
distinct stage.
19.3. Section 106 of the BNSS provides the power to
a police officer to seize certain property which
reads as under:
106. Power of police officer to seize certain
property- (1) Any police officer may seize any
property which may be alleged or suspected to have
been stolen, or which may be found under
circumstances which create suspicion of the
commission of any offence.
(2) Such police officer, if subordinate to the officer
in charge of a police station, shall forthwith report
the seizure to that officer.
(3) Every police officer acting under sub-section (1)
shall forthwith report the seizure to the Magistrate
having jurisdiction and where the property seized is
such that it cannot be conveniently transported to
the Court, or where there is difficulty in securing
proper accommodation for the custody of such
property, or where the continued retention of the
property in police custody may not be considered
necessary for the purpose of investigation, he may
give custody thereof to any person on his executing
a bond undertaking to produce the property before
the Court as and when required and to give effect
to the further orders of the Court as to the disposal
of the same:
Provided that where the property seized under sub-
section (1) is subject to speedy and natural decay
and if the person entitled to the possession of such
property is unknown or absent and the value of
such property is less than five hundred rupees, it
may forthwith be sold by auction under the orders
- 46 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
of the Superintendent of Police and the provisions
of sections 505 and 506 shall, as nearly as may be
practicable, apply to the net proceeds of such sale.
19.4. Section 106(1) expressly empowers a police
officer to seize any property which is alleged or
suspected to have been stolen, or which is
found under circumstances giving rise to
suspicion of the commission of any offence. The
expression "may seize" is to be read not as
conferring unguided discretion, but as a power
to be exercised when seizure is necessary for
the purposes of investigation, preservation of
evidence, and eventual restitution.
19.5. In cases involving movable property such as
gold, valuable, easily transferable, and
susceptible to concealment or dissipation,
seizure is not merely permissible but often
indispensable to ensure that the investigation is
meaningful and effective.
- 47 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
19.6. The necessity of seizure in such cases flows
from multiple considerations:
19.6.1. to prevent further circulation or
alienation of stolen property,
19.6.2. to preserve the identity and integrity of
the articles,
19.6.3. to enable forensic, documentary, and
comparative verification,
19.6.4. and ultimately, to facilitate restoration to
the true owners upon conclusion of
proceedings.
19.7. Permitting alleged stolen property to remain
indefinitely in private custody, even with a
financier, would undermine each of these
objectives and render the investigative process
illusory.
19.8. Importantly, the power of seizure under Section
106 is not unregulated. The BNSS incorporates
- 48 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
multiple statutory safeguards, ensuring that
seizure is lawful, accountable, and
proportionate:
19.8.1. Under Section 106(2), the seizing officer
must immediately report the seizure to
the officer in charge of the police station.
19.8.2. Under Section 106(3), the seizure must
be forthwith reported to the jurisdictional
Magistrate.
19.8.3. The Magistrate thereafter exercises
supervisory control over custody,
retention, and interim handling of the
property.
19.9. These safeguards ensure that seizure is not
arbitrary, excessive, or punitive, but remains
tethered to the needs of investigation and
judicial oversight.
- 49 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
19.10. The proviso to Section 106(3), which deals with
property of minimal value or subject to speedy
decay, has no application to gold articles of
substantial monetary and evidentiary value. On
the contrary, such articles require secure
custody and judicial supervision, reinforcing the
justification for seizure rather than negating it.
19.11. Section 107 deals with Attachment, Forfeiture
or Restoration of property reads as under:
107. Attachment, forfeiture or restoration of
property- (1) Where a police officer making an
investigation has reason to believe that any
property is derived or obtained, directly or
indirectly, as a result of a criminal activity or from
the commission of any offence, he may, with the
approval of the Superintendent of Police or
Commissioner of Police, make an application to the
Court or the Judicial Magistrate exercising Disposal
of things found in search beyond jurisdiction.
Recording of search and seizure through audio
video electronic means. Power of police officer to
seize certain property. Attachment, forfeiture or
restoration of property. 5 10 15 20 25 30 35 40 45
50 31 jurisdiction to take cognizance of the offence
or commit for trial or try the case, for the
attachment of such property.
(2) If the Court or the Judicial Magistrate has
reasons to believe, whether before or after taking
evidence, that all or any of such properties are
proceeds of crime, the Court or the Magistrate may
issue a notice upon such person calling upon him to
- 50 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
show cause within a period of fourteen days as to
why an order of attachment shall not be made.
(3) Where the notice issued to any person under
sub-section (2) specifies any property as being held
by any other person on behalf of such person, a
copy of the notice shall also be served upon such
other person.
(4) The Court or the Judicial Magistrate may, after
considering the explanation, if any, to the show-
cause notice issued under sub-section (2) and the
material fact available before such Court or
Magistrate and after giving a reasonable
opportunity of being heard to such person or
persons, may pass an order of attachment, in
respect of those properties which are found to be
the proceeds of crime:
Provided that if such person does not appear
before the Court or the Magistrate or represent his
case before the Court or Judicial Magistrate within a
period of fourteen days specified in the show-cause
notice, the Court or the Judicial Magistrate may
proceed to pass the ex-parte order.
(5) Notwithstanding anything contained in sub-
section (2), if the Court or the Judicial Magistrate is
of the opinion that issuance of notice under the said
sub-section would defeat the object of attachment
or seizure, the Court or Judicial Magistrate may by
an interim order passed ex-parte direct attachment
or seizure of such property, and such order shall
remain in force till an order under sub-section (6) is
passed.
(6) If the Court or the Judicial Magistrate finds the
attached or seized properties to be the proceeds of
crime, the Court or the Judicial Magistrate shall by
order direct the District Magistrate to rateably
distribute such proceeds of crime to the persons
who are affected by such crime.
(7) On receipt of an order passed under sub-section
(6), the District Magistrate shall, within a period of
- 51 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
sixty days distribute the proceeds of crime either by
himself or authorise any officer subordinate to him
to effect such distribution.
(8) If there are no claimants to receive such
proceeds or no claimant is ascertainable or there is
any surplus after satisfying the claimants, such
proceeds of crime shall stand forfeited to the
Government.
19.12. Perusal of subsection (1) of Section 107 would
indicate that where a police officer making an
investigation has a reason to believe that the
property is derived or obtained directly or
indirectly as a result of criminal activity, or the
commission of any offence, he may with the
approval of the Superintendent of Police or
Commissioner of Police make an application to
the court or the Magistrate, exercising
jurisdiction to take cognizance of the offence or
commit for trial or try the case for the
attachment of such property.
19.13. Subsection (2) of Section 107 provides for the
Magistrate to pass necessary orders where he
has reason to believe, whether before or after
- 52 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
taking evidence, that all or any such properties
are proceeds of crime, to issue a notice upon
such person calling upon him to show cause
within a period of 14 days as to why an order of
attachment shall not be made.
19.14. In terms of Subsection (4) of Section 107, the
Magistrate, after considering the explanation, if
any, to the show cause notice, and after giving
an opportunity of being heard, may pass an
order of attachment in respect of the properties
which are found to be proceeds of the crime.
19.15. Subsection (5) of Section 107 provides for a
situation where, if delay were to defeat the
object of attachment or seizure, an interim ex
parte order of seizure, attachment or seizure
could be made.
19.16. Sections 106 and 107 of the BNSS Act operate
in different fields. Section 106 deals with
seizure, whereas Section 107 deals with
- 53 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
attachment, forfeiture or restoration, as can be
seen from the extracted provisions above.
Under subsection (1) of Section 106, as
indicated supra, if any property is alleged or
suspected to have been stolen, then the police
officer may seize such property.
19.17. The contention of Sri. Anish Jose Antony,
learned counsel for the petitioner, that seizure
can be made only under Section 107, in my
considered opinion, is completely misconceived.
As indicated supra, Section 107 deals with the
attachment of such property and not seizure,
seizure being covered under Section 106.
Respondent No.1, on the basis of a complaint
which has been registered, has called upon the
petitioner to provide certain information and
produce the gold articles pledged with the
petitioner. If those gold articles are found to be
the ones stolen from respondent No.2, the
- 54 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
petitioner cannot have any objection to such
seizure because they are stolen property
coming within the meaning of Section 106 of
the BNSS.
19.18. Section 107 of the BNSS, which provides for
attachment, forfeiture, and restoration,
operates at a later and more adjudicatory
stage. It is invoked when the court forms an
opinion that property constitutes proceeds of
crime. The Petitioner's attempt to equate
seizure under Section 106 with attachment
under Section 107 is legally flawed. These
provisions complement but do not substitute
each other.
19.19. Seizure under Section 106 is investigative and
preservatory.
19.20. Attachment under Section 107 is consequential
and adjudicatory.
- 55 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
19.21. The latter cannot be invoked without the former
where the property itself is the subject-matter
of the offence.
19.22. In the present case, Respondent No.1 has not
yet seized the gold. What has been done is
issuance of a lawful summons under Section
94. Upon production, if the investigating officer
is satisfied that the gold corresponds to the
stolen articles alleged in the complaint, seizure
under Section 106 would be not only lawful but
proportionate and necessary.
19.23. Proportionality, in this context, does not mean
abstention from seizure; it means that seizure
must be:
19.23.1. limited to the property necessary for
investigation,
19.23.2. followed by prompt reporting to the
Magistrate,
- 56 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
19.23.3. and subject to judicial directions
regarding custody and further handling.
19.24. The Petitioner's claim that its status as a
pledgee or secured creditor entitles it to object
to seizure is untenable. Stolen property does
not acquire immunity by passing through a
commercial transaction. A pledge created by an
accused who had no lawful title cannot
override:
19.24.1. the statutory power of seizure, or
19.24.2. the superior right of the true owner.
19.25. The Petitioner's interest, if any, remains
subordinate to criminal law imperatives and
cannot be used to obstruct seizure of stolen
property.
19.26. The constitutional objections raised are equally
misconceived.
- 57 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
19.26.1. Article 19(1)(g) protects lawful business,
not transactions involving stolen
property.
19.26.2. Article 21 is inapplicable to a corporate
entity and, in any event, lawful seizure
pursuant to statute does not violate
personal liberty.
19.26.3. Article 300A permits deprivation of
property by authority of law, which
Section 106 expressly provides.
19.27. Thus, seizure effected in accordance with BNSS
is constitutionally valid and immune from such
challenge.
19.28. From the perspective of victims, seizure
assumes even greater significance. The true
owners of the gold, customers of Respondent
No.2, continue to suffer deprivation of property
- 58 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
of immense personal and economic value.
Seizure ensures:
19.28.1. preservation of the property,
19.28.2. prevention of further misuse,
19.28.3. and a realistic possibility of restitution
upon conclusion of trial.
19.29. To deny or delay seizure would be to privilege
commercial convenience over victim justice, a
course impermissible in criminal jurisprudence.
19.30. As observed supra accepting the Petitioner's
contentions would set a dangerous precedent
whereby stolen property could be shielded from
seizure merely by being pledged with financial
institutions. Such an interpretation would
frustrate investigation, embolden economic
offenders, and erode public confidence in the
criminal justice system.
- 59 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
19.31. An investigating officer is statutorily
empowered under Section 106 of the Bharatiya
Nagarik Suraksha Sanhita, 2023, to seize
property alleged or suspected to be stolen
during the course of investigation. Where the
property itself constitutes the subject-matter of
the offence, seizure is not merely permissible
but necessary, proportionate, and integral to
effective investigation, preservation of
evidence, and eventual restitution to the true
owners.
19.32. The power of seizure under Section 106 is
distinct from and independent of the provisions
relating to attachment, forfeiture, or restoration
under Section 107 BNSS, which operate at a
subsequent and adjudicatory stage. A summons
issued under Section 94 BNSS requiring
production of such property does not amount to
- 60 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
seizure, nor does it adjudicate proprietary
rights.
19.33. A pledgee or financier holding alleged stolen
property cannot object to seizure on the basis
of contractual security interest, commercial
hardship, or apprehended financial loss, as no
person can acquire a better title than that
possessed by the pledger. Stolen property does
not acquire immunity from seizure by being
routed through commercial transactions.
19.34. Seizure effected in accordance with Section 106
BNSS, subject to mandatory reporting to the
jurisdictional Magistrate and judicial
supervision, incorporates adequate procedural
safeguards and does not violate Articles
19(1)(g), 21, or 300A of the Constitution. The
statutory duty to investigate and recover stolen
property, and to prevent further deprivation
- 61 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
suffered by the true owners, prevails over all
competing private commercial interests.
19.35. Accordingly, Point No.3 is answered by holding
that the investigating officer is not only
empowered but, where circumstances so
warrant, duty-bound under Section 106 of the
Bharatiya Nagarik Suraksha Sanhita, 2023, to
seize gold articles alleged or suspected to be
stolen. Such seizure is proportionate,
necessary, and subject to adequate statutory
and judicial safeguards. The Petitioner has no
legal right to object to such seizure merely on
the basis of contractual or commercial interest.
Any seizure effected shall be governed by the
procedural protections and judicial oversight
mandated under the BNSS.
20. Answer to point No.4: What Order?
20.1. This court vide its daily order dated 13.11.2025
in W.P. No.30657/2025 had directed the State
- 62 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
to furnish certain information. The said general
directions are reproduced hereunder for easy
reference:
1. Applications in I.A. No.2/2025 in W.P.
No.30950/2025 and I.A. No.1/2025 in
W.P. No.30657/2025 have been filed by the
concerned Bank stating that one of its
employees has allegedly stolen gold/gold
ornaments from the Bank and pledged the
same with the petitioner- Gold Financing
Company to avail a Gold loan. It is in that
context that the Bank seeks to come on record
as a party respondent, since a criminal
complaint has already been lodged by the
Bank.
2. Accepting the reasons assigned, the
applications are allowed. The Bank is permitted
to come on record as respondent No.3 in each
of the matters. Learned counsel for the
petitioner shall amend the cause title
accordingly and file an amended cause title
forthwith.
3. It is noticed that a large number of similar
cases are being brought before this Court
where gold or gold ornaments are stolen from
residences and pledged with Gold Finance
Companies such as the petitioners. In many
such instances, non or incomplete or improper
compliance with Know Your Customer (KYC)
norms appears to be the underlying cause.
Gold loans are being advanced without proper
verification; upon default, the Gold Finance
Companies proceed to auction the pledged
articles and retain the sale proceeds, as no
rightful claimant comes forward.
- 63 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
4. The present case is a telling example of that
pattern -- inasmuch as even an employee of a
bank has succumbed to the temptation of
stealing gold/gold ornaments from the Bank
and pledging them with a Gold Finance
Company where, again, no questions were
asked and KYC norms were disregarded.
5. The petitioners are, therefore, directed to place
on record comprehensive details relating to the
gold loan transactions undertaken by them in
the State of Karnataka for the preceding three
financial years. The information shall be
certified by the competent officer of the
petitioner company and presented in a
tabulated form under the following heads:
6. General Data
6.1. Total number of gold loan accounts opened
year-wise for the financial years 2022-23,
2023-24, and 2024-25, and for the period
from 01.04.2025 to 15.12.2025.
6.2. Total weight (in grams/kilograms) and
assessed market value of gold pledged during
the above periods.
6.3. Aggregate quantum of loans disbursed
thereunder and the corresponding average
loan-to-value (LTV) ratio applied.
7. KYC and Compliance Parameters
7.1. Number and percentage of accounts where full
KYC verification was completed through
government-issued ID, PAN, and Aadhaar.
7.2. Number of accounts where KYC was incomplete
or provisional.
- 64 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
7.3. Average time taken for KYC verification and
the number of branches that have reported
KYC deviations or internal audit non-
conformities.
7.4. List of internal circulars, RBI guidelines, or
internal audit findings relating to KYC
compliance in gold loans issued or acted upon
during the last three years.
8. Loan Status and Defaults
8.1. Total number of gold loan accounts closed/fully
repaid.
8.2. Total number of accounts where default
occurred (i.e., repayment not made within
contractual period).
8.3. Value and weight of gold corresponding to
defaulted loans.
8.4. Number of default accounts that proceeded to
auction, and total auction proceeds realised.
8.5. Number of cases where the defaulting
borrower appeared after auction and claimed
the balance amount; total value of such
refunds made.
8.6. Number of cases where no claimant appeared
post-auction, and the total residual amount
retained by the company.
9. Theft-linked or Disputed Pledges
9.1. Number of instances where gold pledged with
the petitioner was subsequently identified as
stolen property upon police verification.
9.2. Details of such cases (FIR number, police
station, approximate value of pledged articles,
and status of recovery/refund).
- 65 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
9.3. Steps taken by the petitioner to coordinate
with law enforcement in such cases (including
whether gold was returned or auction proceeds
deposited with the police/court).
10. Branch-wise Segregation
10.1. Data to be broken down branch-wise and
district-wise within Karnataka, indicating for
each branch the number of gold loans
advanced, defaults, auctions, and cases
flagged for possible theft.
10.2. Details of internal compliance or audit findings
regarding adherence to RBI's Fair Practices
Code and KYC directions.
11. Institutional Oversight
11.1. Composition of the petitioner's internal
compliance and audit team responsible for
monitoring gold loan transactions.
11.2. Mechanism adopted for customer identification
and risk mitigation under the Prevention of
Money Laundering Act (PMLA).
12. The above information for the period
01.04.2025 to 15.12.2025 shall be placed on
record on or before 15.12.2025. The data for
the remaining period up to the date of filing
may be supplemented thereafter.
13. The learned Additional Government Advocate
(AGA) shall also secure comprehensive
instructions from the Home Department and
Director General & Inspector General of Police
(DG & IGP), Karnataka, and place on record,
on or before 15.12.2025, a detailed statement
under the following heads:
- 66 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
14. Theft Incidents
14.1. Total number of cases registered during the
last three years involving theft of gold/gold
ornaments within the State of Karnataka.
14.2. Categorisation of such thefts into (i) residential
thefts, (ii) institutional thefts (banks/jewelers),
and (iii) others.
15. Theft-to-Pledge Linkages
15.1. Number of cases where the stolen gold was
later found to have been pledged or attempted
to be pledged with any Gold Finance Company
or Non-Banking Financial Company (NBFC).
15.2. Names of such Gold Finance Companies and
approximate value of the pledged gold in each
case.
15.3. Number of cases where stolen gold was
successfully recovered before or after being
pledged.
15.4. Number of cases where criminal proceedings
have been initiated against the employees or
branch officials of the Gold Finance Company.
16. Inter-Agency Coordination
16.1. Details of Standard Operating Procedure
(SOP), if any, presently in place between the
State Police, RBI, and Gold Finance Companies
for reporting or verifying stolen property.
16.2. Number of police communications issued to
RBI or other regulators seeking guidance on
recovery, auction stays, or custodial handling
of pledged stolen gold.
- 67 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
17. Outcomes and Pending Actions
17.1. Number of cases where gold has been returned
to the rightful owner upon verification.
17.2. Number of cases pending trial where pledged
stolen gold is in the custody of Gold Finance
Companies or the police.
17.3. Recommendations, if any, from the Home
Department or CID for tightening the KYC
process or inter-agency verification protocols.
17.4. The report shall be authenticated by a
responsible officer of the rank of
Superintendent of Police or above, and filed
with the Registry before the next date of
hearing.
18. At this stage, learned Counsel for the
Petitioners submits that the Reserve Bank of
India (RBI) may be impleaded as a party
respondent. Accepting his request and being of
the opinion that the issue raised herein
involves the response of RBI, this Court deems
it appropriate to implead the RBI. Accordingly,
RBI is brought on record as Respondent No.4.
19. Sri. Pradeep Sawkar, learned counsel, is
directed to take notice for Respondent No.4
and to secure necessary instructions and make
submissions on the next date of hearing about
the above issues.
20. List the matter on 15.12.2025 at 2:30 p.m.
for further hearing.
20.2. Nearly three months having elapsed from the
date of such directions, it would be for
- 68 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
respondent No.1 to place all the above details
on record within a period of 2 weeks from
today.
20.3. In view of my findings as regards point No.1, 2,
and 3, I am of the considered opinion that no
grounds having been made out by the
petitioner to grant the reliefs which have been
sought for, it would be for the petitioner to
produce the gold articles before the
investigating officer and for the investigating
officer to examine whether the gold articles
produced are said to have been stolen from
respondent No.2 and if so stolen, to comply
with the requirements of Section 106 of the
BNSS. Further needless to say, that it would be
for the petitioner to answer all the queries that
are raised by respondent No.1 during the
course of the investigation.
20.4. In view of the above, I pass the following:
- 69 -
NC: 2026:KHC:7104
WP No. 31057 of 2025
HC-KAR
ORDER
i. No ground being made out, the petition stands dismissed.
ii. Though the petition is dismissed, re-list on 17.02.2026 to report for compliance.
Sd/-
(SURAJ GOVINDARAJ) JUDGE LN List No.: 2 Sl No.: 32