- 1 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 13808 OF 2025 (GM-RES) BETWEEN: 1 . MANAPPURAM FINANCE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956 HAVING REGISTERED OFFICE AT MANAPURAM HOUSE, A.O. VALAPAD TRISSUR DISTRICT, KERALA-680567 HAVING ONE OF ITS BRANCH AT PB ROAD, DAVANGERE KARNATAKA-577002. REPRESENTED BY THE AUTHORIZED OFFICER KALAPALA SURESH ...PETITIONER (BY SRI. ANISH JOSE ANTONY, ADVOCATE) AND: 1 . STATE OF KARNATAKA BY STATION HOUSE OFFICER KTJ NAGAR POLICE STATION NITTUVALLI DAVANAGERE KARNATAKA - 560001. 2 . SHIVAKUMAR .K.B CBS BANK LIMITED DAVANGERE BRANCH 134/1, 2, 3 KB BADAVANE DAVANGERE CITY Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 DAVANGERE KARNATAKA-577002. …RESPONDENTS (BY SRI. RAHUL RAI, HCGP FOR R1; SRI. JOSEPH ANIL KUMAR .A, ADVOCATE FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR THE RECORDS OF THE CRIME NO. 87/2025 PENDING BEFORE THE HONORABLE COURT OF 3RD ADDL. CIVIL JUDGE AND JMFC COURT, DAVANAGAGERE DISTRICT REGISTERED BY THE KTJ NAGAR POLICE STATION AND DIRECT THE POLICE NOT TO SEIZE THE GOLD ARTICLES, IN THE EVENT, THE PETITIONER PRODUCES THE GOLD ARTICLES BEFORE THE INVESTIGATING OFFICER OR THE TRAIL COURT BUT CAN ONLY EXAMINE THE SAME FOR THE PURPOSE OF INVESTIGATION IN CRIME NO. 87/2025 (ANNEXURE-C) REGISTERED BY THE KTJ NAGAR PS. THIS WRIT PETITION COMING ON FOR FURTHER HEARING, THIS DAY ORDER WAS MADE THEREIN, AS UNDER: CORAM: HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The captioned petition is filed challenging the order dated 13.05.2025 passed in Crime No.87/2025 by the III Additional Civil Judge and JMFC Court, Davanagere vide Annexure-H and consequently, direct the respondent No.1 to restore the gold ornaments seized from the petitioner vide Annexure-J. - 3 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 2. Facts leading to the case are as under: The petitioner, a Non-Banking Financial Company, has approached this Court assailing the action of the Investigating Officer and the consequential order by which interim custody of gold ornaments seized from the petitioner has been handed over to respondent No.2 (complainant) without issuing notice to or hearing the petitioner, who asserts a lawful lien based on pledge. 3. The petitioner is engaged in the business of advancing loans to its customers against pledge of gold ornaments. One Sri. Kalapala Suresh, working as Legal Head was authorized on behalf of the petitioner/company. Subsequently, a complaint came to be registered, culminating in Crime No.87/2025 for the offences punishable under Sections 306, 316(5), 318(4) of the Bharatiya Nyaya Sanhita. It is averred in the petition that respondent No.2 came to the branch of the petitioner with an intention of seizing the gold articles by stating that the gold articles are involved in the said crime. During the - 4 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 course of investigation, the police seized gold ornaments in item Nos.1 to 16, which were assigned P.F.No.44/2025. 4. It is not in dispute that the seized gold was in the lawful custody of the petitioner as a pledgee at the time of seizure. However, the Investigating Officer / trial Court has proceeded to grant interim custody of the said gold ornaments to respondent No.2 – the complainant, without affording any opportunity of hearing to the petitioner. 5. The short question that arises for consideration is: Whether interim custody of seized gold ornaments can be granted to the complainant without notice to and hearing the petitioner-NBFC, which claims a lawful possessory right by way of pledge? 6. The law governing custody of seized property is well settled. Sections 451 and 457 of the Code of Criminal - 5 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 Procedure (and the corresponding scheme under the Bharatiya Nagarik Suraksha Sanhita) mandate that: (i) Custody of seized property is a judicial determination, not an administrative act; (ii) The Court must consider who is entitled to possession pending trial; (iii) All persons claiming an interest in the property must be heard before passing an order of custody. 7. In Sunderbhai Ambalal Desai v. State of Gujarat1, the Hon’ble Supreme Court held that the Magistrate must exercise judicious discretion while granting custody of seized property and that such orders cannot be passed mechanically or arbitrarily, particularly where competing claims exist. 1 (2002) 10 SCC 283 - 6 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 8. In Multani HanifbhaiKalubhai v. State of Gujarat2, the Hon'ble Supreme Court categorically ruled that: “When rival claims are made over seized property, the Magistrate must afford an opportunity of hearing to all claimants before passing orders under Sections 451 or 457 Cr.P.C.” 9. The Hon'ble Supreme Court has further clarified in General Insurance Council v. State of A.P.3, that seizure by police does not extinguish civil or contractual rights, and that custody orders must protect such rights until adjudicated in accordance with law. 10. A pledgee, in law, has a special property and possessory right in the pledged goods. This right cannot be defeated or ignored by a unilateral order of interim custody, particularly when the pledgee is not even heard. 2 (2013) 3 SCC 240 3 (2007) 12 SCC 354 - 7 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 11. The criminal court, at the stage of interim custody, does not decide title but only determines who should retain possession pending proceedings, and such determination must follow principles of natural justice. 12. In the present case, it is an admitted position that: (i) The gold ornaments were seized from the petitioner-NBFC, not from the complainant; (ii) The petitioner asserts a lawful lien and possessory right arising out of pledge; (iii) Interim custody has been handed over to respondent No.2 without notice to or hearing the petitioner. 13. Such a course of action is ex facie illegal and contrary to the settled law laid down by the Hon’ble Supreme Court. The Investigating Officer or the Magistrate could not have unilaterally granted interim custody to the complainant ignoring the petitioner’s claim. - 8 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 14. The impugned order, therefore, suffers from violation of principles of natural justice, non-application of mind, and jurisdictional error, warranting interference by this Court under Article 226 of the Constitution of India. 15. In view of the above, the following order is passed: ORDER (i) The writ petition is allowed; (ii) The impugned order dated 13.05.2025 passed in Crime No.87/2025 by the III Additional Civil Judge and JMFC, Davanagere, vide Annexure-H, granting interim custody of the gold ornaments seized in P.F.No.44/2025 to respondent No.2 is hereby set aside; (iii) The matter is remitted to the learned jurisdictional Magistrate to reconsider the question of interim custody afresh, after issuing notice to the petitioner and all other interested parties, and to pass appropriate orders in accordance with law under Sections - 9 - HC-KAR NC: 2026:KHC:11265 WP No. 13808 of 2025 451/457 Cr.P.C. (or corresponding provisions of BNSS); (iv) It is clarified that this Court has not expressed any opinion on the merits of the rival claims, and all contentions are left open; (v) The learned Magistrate shall endeavour to complete the exercise within four weeks from the date of receipt of a copy of this order. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE CA List No.: 1 Sl No.: 37