Klm Axiva Finvest Ltd vs State Of Karnataka on 18 March, 2026

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                                                        NC: 2026:KHC:16055
                                                       WP No. 7571 of 2026


                   HC-KAR




                   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                          DATED THIS THE 18TH DAY OF MARCH, 2026

                                              BEFORE

                   THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

                        WRIT PETITION NO. 7571 OF 2026 (GM-POLICE)

                   BETWEEN:

                   KLM AXIVA FINVEST LTD.
                   HAVING ONE OF ITS BRANCH HAVING AT
                   NO. 163/3A, OPP. DASARAHALLI METRO STATION
                   HIGHWAY ROAD, VIDHYANAGAR,
                   T. DASARAHALLI
                   BANGALORE 560057
                   REP. BY ITS REGION MANGER
                   MR. VENKATESHA MR
                                                             ...PETITIONER

                   (BY SRI. ANISH JOSE ANTONY., ADVOCATE)

                   AND:
Digitally signed
by CHAITHRA A      1.    STATE OF KARNATAKA
Location: HIGH
COURT OF
                         BY ITS SECRETARY,
KARNATAKA                HOME DEPARTMENT,
                         VIDHANA SOUDHA,
                         BENGALURU- 560 001

                   2.    THE STATION HOUSE OFFICER/INVESTIGATION
                         OFFICER
                         MADANAYAKAHALLI POLICE STATION
                         NELAMANGALA 562123
                                                            ...RESPONDENTS

                   (BY SRI. VIKAS ROJIPURA, AGA)
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                                                       NC: 2026:KHC:16055
                                                     WP No. 7571 of 2026


HC-KAR



     THIS WRIT PETITION FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO
A. DECLARE THAT THE INTERFERENCE BY THE RESPONDENTS
IN SEIZING THE GOLD ARTICLES PLEDGED BY ITS CUSTOMERS
OF THE PETITIONER BY THREATENING TO ARREST IS
ARBITRARY AND IS IN VIOLATION OF FUNDAMENTAL RIGHTS
GUARANTEED UNDER ARTICLES 19(1)(G) AND 21 AND THE
CONSTITUTIONAL RIGHTS GUARANTEED UNDER ART 300A OF
THE CONSTITUTION OF INDIA 1950. B. ISSUE A WRIT OF
MANDAMUS OR ANY OTHER APPROPRIATE WRIT OR ORDER OR
DIRECTION BE ISSUED TO THE 2ND RESPONDENT TO RESTORE
THE SEIZED GOLD ARTICLES VIDE ANNEXURE-F DATED
21.02.2026 TO THE PETITIONER IN THE INTEREST OF JUSTICE
AND EQUITY.


     THIS PETITION, COMING ON FOR DICTATING ORDERS,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:


CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

                            ORAL ORDER

Captioned petition is filed seeking following reliefs:

"A. Declare that the interference by the Respondents in seizing the gold articles pledged by its customers of the petitioner by threatening to arrest is arbitrary and is in violation of fundamental rights guaranteed under Articles 19(1)(g) and 21 and the constitutional rights guaranteed under art 300A of the Constitution of India 1950.

B. Issue a Writ of Mandamus or any other appropriate writ or order or direction be issued to the 2nd

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Respondent to restore the seized gold articles vide Annexure-F dated 21.02.2026 to the petitioner in the interest of justice and equity.

C. And grant such other relief or directions as this Hon'ble Court deems fit the facts and circumstances of the case."

2. Petitioner a Non-Banking Financial Company

registered with Reserve Bank of India is asserting that a

borrower had pledged certain gold articles on 31.12.2025

and obtained loan from the petitioner. On a complaint

lodged on 5.4.2019 by one Smt. Leena, alleging theft of

248 grams of gold articles, a crime is registered by

respondent No.2 in Cr.No.0680/2025 for the offence

punishable under Sections 305(a), 331(4) of the Bharatiya

Nyaya Sanhita, 2023, and respondent No.2 under the garb

of investigation has issued a notice under Section 94(2) of

Bharatiya Nagarik Suraksha Sanhita, 2023 (for short

"BNSS, 2023") and has seized the entire gold articles

pledged in the name of accused Muniraju.

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3. Petitioner's counsel questioning the action of

the Investigating Officer in seizing the gold articles, has

placed reliance on the order passed by the Co-Ordinate

Bench in an identical case and has contended that the

physical removal of the properties from the custody of the

petitioner who is a non-banking financial company is not

required for collecting evidence. He further submits that

petitioner is advancing loans to the customers by

accepting the gold as security and therefore, contends that

the Investigating Officer cannot indiscriminately seize the

gold articles pledged by borrowers/ customers. Emphasis

is laid on the data that 90% of the cases where properties

were seized have resulted into acquittal and the properties

were never returned to the petitioner. Reliance is placed

on the following judgments:

"(a) Crl.A.No.1026/2024 [Muthoot Fincorp Limited

.vs. The Station House Officer and others;

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(b) Spl.Leave to Appeal (Crl.) No.14956/2025

[Manappuram Asset Finance Limited .vs. The State

of Andhra Pradesh and others];

(c) W.P.No.21838/2025(GM-POLICE) [Muthoot

Finance Limited .vs. The State of Karnataka and

Another];

(d) Crl.P.No.10023/2025 [Keerthana Finserv Private

Limited .vs. The State of Andhra Pradesh];

(e) W.P.No.25540/2023 [Mannappuram Asset

Finance Limited .vs. The State of Andhra Pradesh];

(f) W.P.No.25563/2024(GM-POLICE) [Muthoot

Finance Limited .vs. The State of Karnataka];

(g) W.A.No.1653/2024(GM-POLICE) [Smt.

Gouramma H .vs. Muthoot Finance Limited and

Others];

(h) W.P.No.27479/2025(GM-Police) [Manapuram

Finance Limited .vs. State of Karnataka and others];

(i) 2025 SCC Online Ker 3546[Headstar Global Pvt.

Limited .vs. State of Kerala];

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(j) (2019) 20 SCC 119 [Nevada Properties (P)

Limited .vs. State of Maharashtra;

(k) W.A.No.1913/2025(GM-Police) [Mannapuram

Finance Limited .vs. State of Karnataka]

(l) W.P.No.4347/2026(GM-Police) Muthoot

Finance Limited .vs. State of Karnataka; and

(m) 2026 SCC Online Del 297 [Malabar Gold &

Diamond Limited .vs. Union of India]"

4. Per contra, counsel appearing for

respondents/State supporting the action of the

Investigating Officer submits that Section 106 of BNSS,

2023, empowers the Investigating Officer to secure the

suspected properties and therefore, it is contended that

seizure under the above said provisions is incidental to the

power of the investigation and hence, prays for dismissal

of the petition.

5. Having heard the learned counsel appearing for

the parties and upon perusal of the material placed on

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record, this Court is of the considered view that the

contention urged by the petitioner questioning the seizure

effected by the Investigating Officer cannot be examined

in exercise of writ jurisdiction under Article 226 of the

Constitution of India. If the Investigating Officer, during

the course of investigation, entertains a reasonable belief

that the property in question constitutes stolen property or

property suspected to have been stolen, the officer is

statutorily empowered to effect seizure in exercise of

powers conferred under Section 106 of the BNSS, 2023.

Such seizure forms an integral part of the investigative

process undertaken by the police and ordinarily the

legality or propriety of such investigative steps would not

fall for examination in a writ petition unless exceptional

circumstances are demonstrated. A Co-ordinate Bench of

this Court, in the reported judgment rendered in IIFL

Finance Limited vs. State of Karnataka and another

[WP.No.31057/2025 dated 04.02.2026], while

examining a similar issue, has categorically held that the

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Investigating Officer is statutorily empowered under

Section 106 of BNSS, 2023 to seize property alleged or

suspected to have been stolen during the course of

investigation.

6. This Court is further of the view that the

statutory framework itself provides an efficacious and

adequate remedy to a person who is aggrieved by seizure

of property during investigation. Section 497 of the BNSS,

2023 empowers the jurisdictional Magistrate to pass

appropriate orders with regard to custody, interim release

or disposal of property seized during investigation. The

said provision enables the Magistrate to examine the

nature of the property, the competing claims of the parties

and the requirements of investigation, and thereafter pass

suitable orders governing the interim custody or release of

the property. When the statute provides a specific

mechanism for redressal of grievances relating to seized

property, this Court would ordinarily decline to entertain a

writ petition under Article 226 of the Constitution of India,

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particularly when the petitioner has an efficacious

alternative remedy before the jurisdictional Magistrate.

7. In view of the availability of such statutory

remedy and having regard to the settled principle that the

extraordinary jurisdiction of this Court under Article 226 of

the Constitution of India is discretionary in nature, this

Court is not inclined to entertain the present writ petition.

However, liberty is reserved to the petitioner to avail the

remedy available under Section 497 of the BNSS, 2023

before the jurisdictional Magistrate and seek appropriate

orders with regard to the custody or release of the seized

property in accordance with law.

Accordingly, the writ petition stands dismissed

reserving the aforesaid liberty.

SD/-

(SACHIN SHANKAR MAGADUM) JUDGE

ALB List No.: 2 Sl No.: 3