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
The Court held there was no infirmity in the police notice, & accordingly directed:
- The Manager of Canara Bank, Koramangala must appear before the Devarajeevanahalli Police with all original documents on 15.10.2025 at 2:30 PM.
- If any document needs to be retained, the Investigating Officer must issue a proper receipt listing all documents & provide sealed certified copies to the Bank.
Essence
- The High Court clarified that banks must cooperate with police investigations involving alleged fraudulent or impersonated property transactions.
- Holding original title deeds for security does not exempt banks from producing them when required under lawful investigation notices issued under Section 94 BNSS, 2023.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. Learned AGA accepts notice for respondents No.1 to 3.
2. The petitioner is before this Court seeking for the following reliefs:
a) Issue a writ in the nature of certiorari or any other writ or order and quash the notice issued by R1, under section 94 of The Bharatiya Nagarik Suraksha Sanhita, 2023 vide Annexure-A dated 26.09.2025;
b) Issue a writ in the nature of mandamus or any other writ or order and direct the R1 to accept the certified copies of the documents submitted the officers petitioner Bank as per Annexure-A.
c) To pass any other appropriate orders as may be necessary, till the final disposal of this petition, in the interest of equity and justice.
3. The petitioner sanctioned loans to Hemant Kumar. S and Vishnu. B for purchase of residential properties, who had executed mortgage deeds under the documents in favour of the petitioner-bank. One Ms.Mary Hariette had filed a complaint before respondent No.1 alleging that she has been impersonated and sale deed executed in respect of properties, as regards which FIR No.252/2025 for offences under Section 318(4), 319(2), 336(3), 340(2) 336(2) read with 3(5) of Bharatiya Nyaya Sanhita, 2023 has been registered.
4. Respondent- police on 16.09.2025 issued a notice under Section 94 of the Bharatiya Nyaya Suraksha Sanhita, 2023, calling upon the authorised officers of the petitioner to be personally present before respondent No.1 and produce the copies of the document, subject matter of the aforesaid crime. Again on 26.09.2025, a notice had been issued calling upon the petitioners to produce the original mortgage documents and the documents pertaining to the loans. It is challenging the same, the petitioner is before this Court.
5. When an investigation in respect to impersonation and or fabricated documents is being conducted by the jurisdictional police authorities and the police authorities were to issue notice under Section 94 of BNSS of 2023, it is but the duty of the Bank to produce the said original documents before the investigating officer, since the very transaction which has been entered into by the bank is under question and that is being investigated by the investigating officer. The petitioner – bank cannot on the ground that there is a alleged mortgage executed in favour of the petitioner bank as regards with the petitioner bank would be entitled to exercise security interest and initiate proceedings refuse to produce the original documents before the investigating authorities. The same if permitted would amount to obstruction of investigation.
6. In that view of the matter, I do not find any infirmity in the notice which has been issued. Hence, I pass the following:
ORDER
i. The writ petition is allowed.
ii. The Manager of Canara Bank, Retail Asset of Koramangala is directed to be present before the respondent No.1 with all original documents pertaining to the transaction as indicated in the notice under Section 94 on 15.10.2025 at 2:30 PM.
iii. It is made clear that in the event of the original
documents being required to be retained by the Investigating Officer, the Investigating officer will issue necessary receipt for having received and retained any particular document by detailing out the document in such a manner that the same can be identified, as also furnish a copy of the said document with a seal and signature of the investigating officer of having received the original of the certified copy.
