Banks Must Produce Original Mortgage Documents in Fraud Probes: Karnataka HC

Canara Bank Vs State of Karnataka (Karnataka High Court)

 “No Shield in Mortgage” — Originals Must Be Shown When Fraud Is Probed- Karnataka HC: Banks Must Produce Original Loan Documents When Fraud Is Alleged – Canara Bank’s Plea Against Police Notice Dismissed

Background

Canara Bank (Koramangala Branch) filed this writ petition challenging a notice dated 26.09.2025 issued by the Devarajeevanahalli Police under Section 94 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

The police had sought production of original mortgage documents relating to loans sanctioned to Hemant Kumar S. & Vishnu B., against whom an FIR (No.252/2025) had been registered for offences under Sections 318(4), 319(2), 336(3), 340(2), 336(2) r/w 3(5) of the Bharatiya Nyaya Sanhita, 2023, following a complaint by Mary Hariette alleging impersonation & fraudulent property transactions.

Petitioner(Bank)’s Contention

• It had lawfully mortgaged the properties & held security interest over them.
• It was not obliged to produce original title & loan documents before the police since those were part of secured assets under the bank’s custody.
• The request amounted to interference with banking rights & could impede recovery proceedings.

Court’s Analysis

• The impugned property transaction itself was under investigation for alleged forgery & impersonation.
• When the authenticity of the documents forming the basis of the loan & mortgage is questioned, the investigating officer is entitled to verify the originals.
• Refusal by the bank to produce such documents would amount to obstruction of investigation.
• Section 94 of the BNSS expressly empowers the police to call for production of documents relevant to an ongoing investigation.

Decision