Karnataka High Court Orders Unfreezing of NBFC Sister Firm Accounts in Fraud Case
The Karnataka High Court has ruled that police cannot arbitrarily freeze the bank accounts of sister companies linked to an entity under investigation for online fraud. Justice Sachin Shankar Magadum directed the immediate defreezing of accounts belonging to Mufin Green Finance Limited, a listed non-bank financial company (NBFC), and its related firm. The court deemed the police action disproportionate and violative of statutory mandates under the Bharatiya Nagarik Suraksha Sanhita (BNSS). The case originated from an investigation into illegal online gaming involving Muffin Pay, a sister concern. Although substantial funds were allegedly transferred to Mufin Green, neither petitioner was named as an accused in the chargesheet filed in February 2026. The court emphasized that coercive measures are unjustified without incriminating material, especially when alleged crime proceeds are already secured via judicial orders. The ruling highlights legal protections for corporate entities not directly charged, preventing unwarranted financial disruption during ongoing investigations.
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Karnataka High Court Orders Unfreezing of NBFC Sister Firm Accounts in Fraud Case
The Karnataka High Court has ruled that police cannot arbitrarily freeze the bank accounts of sister companies linked to an entity under investigation for online fraud. Justice Sachin Shankar Magadum directed the immediate defreezing of accounts belonging to Mufin Green Finance Limited, a listed non-bank financial company (NBFC), and its related firm. The court deemed the police action disproportionate and violative of statutory mandates under the Bharatiya Nagarik Suraksha Sanhita (BNSS). The case originated from an investigation into illegal online gaming involving Muffin Pay, a sister concern. Although substantial funds were allegedly transferred to Mufin Green, neither petitioner was named as an accused in the chargesheet filed in February 2026. The court emphasized that coercive measures are unjustified without incriminating material, especially when alleged crime proceeds are already secured via judicial orders. The ruling highlights legal protections for corporate entities not directly charged, preventing unwarranted financial disruption during ongoing investigations.
The Indian Express