Court lifts debit freeze, reduces lien amount, and directs exploration of e-Notarisation for court filings in landmark ruling
In a significant judgment delivered on August 17, 2026, the Karnataka High Court, presided over by Justice Suraj Govindaraj, partially allowed the writ petition filed by IIFL Finance Limited against the State of Karnataka and others. The petition challenged notices issued under Sections 94 and 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which had led to operational restrictions on the petitioner’s bank account held with ICICI Bank.
The petitioner sought quashing of the impugned notices dated June 7, 2026, and restoration of access to its current account (No. 000105162091) to enable regular business operations. The court granted relief by lifting the debit freeze imposed on the account and reducing the lien amount to Rs. 1,19,00,000/-. This move was aimed at balancing the interests of law enforcement and the petitioner’s business continuity.
The Court also took note of an affidavit of compliance filed by the petitioner that was e-Notarised, highlighting the growing acceptance of electronic notarisation in judicial processes. Consequently, the court directed the Registrar (Judicial) to bring this development to the notice of the Registrar General and Registrar (Computers) to facilitate the implementation of e-Notarisation for filings before the High Court and District Courts. This directive marks an important step towards digitisation and streamlining of court procedures in Karnataka.
The court reserved liberty for the petitioner to raise any disputes on the Grievance Redressal Mechanism (GRM) portal or pursue issues in criminal proceedings where applicable. This ensures that the petitioner’s rights to challenge and seek redressal remain intact despite the partial relief granted.
Justice Govindaraj expressed commendation and appreciation for the collaborative efforts of the Director General of Police Dr. Pranab Mohanty, counsel for ICICI Bank Sri. Francis Xavier, and the Additional Government Advocate Sri. Mohammed Jafar Shah in resolving the dispute amicably.
This judgment not only safeguards the interests of financial institutions in matters of law enforcement but also underscores the judiciary’s responsiveness towards adopting technology and protecting business operations against undue hardship.
Bottom Line:
Writ Petition - Quashing of notice under Section 94 and 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) issued by Respondent No.1 and direction to Respondent No.2 (ICICI Bank) to restore operational access to the Petitioner's current account - E-Notarisation of affidavit of compliance highlighted for implementation in court filings - Debit freeze lifted and lien amount reduced - Liberty reserved for petitioner to raise disputes on GRM portal or in criminal proceedings.
Statutory provision(s):
Bharatiya Nagarik Suraksha Sanhita, 2023 Sections 94, 106
IIFL Finance Limited v. State of Karnataka, (Karnataka) : Law Finder Doc Id # 2976010
