Financial companies must seek relief through legal channels when police seize pledged items under allegations of theft, ensuring adherence to established guidelines and protocols.

ORDER :

1. The petitioner/Muthoot Money Limited, a company registered under the provisions of the Companies Act, 1956 - a non-banking financial company (hereinafter referred to as ‘the Company’ for short) is at the doors of this Court seeking a declaration that interference by the respondents/Police in the business of the petitioner and forcibly seizing gold articles pledged by its customers is arbitrary. A consequential relief is sought that the gold articles seized in Crime No.108 of 2024 be returned to the petitioner.

2. Heard Sri Anish Jose Antony, learned counsel appearing for the petitioner and Sri B.N.Jagadeesha, learned Additional State Public Prosecutor for the respondents.

3. Facts, in brief, germane are as follows: -

The business of the petitioner in terms of the averment in the petition is advancement of loan/money to its customers by accepting gold ornaments and getting them pledged in exchange of certain money and it is a non-banking financial company. The issue in the lis revolves around a crime being registered on 06.06.2024 by the 2^nd respondent/Station House Officer of Vidyagiri Police Station alleging offence punishable under Section 394 of the IPC. On registration of crime, it is the averment that the 2^nd respondent comes to the branch of the petitioner on 07.01.2025 and attempts to seize gold articles pledged by the borrowers, holding a threat to arrest employees of the petitioner. All this is done through a notice issued under Section 91 of the Cr.P.C. Issuance of notice and wanting to seize gold articles that are pledged in exchange of money, is what has driven the petitioner to this Court in the subject petition.

4. The learned counsel appearing for the petitioner would contend that the petitioner has got the gold pledged in exchange of money to the customers. It cannot be said to be accepting stolen gold as in a day several transactions happen and customers would come and pledge gold ornaments in exchange of money. Every pledge of gold cannot be said to be stolen article. He would contend that certain guidelines are necessary for the Police action as also the customers who would pledge the gold in registering the complaint. With reference to the case at hand, the gold weighing 100 grams worth ₹3,50,000/- of different varieties were pledged. The crime then comes to be registered that four unknown persons have pledged the stolen gold ornaments with the Company. The learned counsel would submit that the issue is covered by plethora of judgments rendered by coordinate benches of this Court.

5. Per contra, the learned Additional State Public Prosecutor would refute the submissions in contending that earlier judgments rendered by Courts would not become applicable to the case at hand. The petitioner has in fact accepted the stolen gold and, therefore, it is bound to return to the persons who own the said gold. He would submit that under Section 17 of the Karnataka Pawnbrokers Act, 1961 the action of the petitioner becomes punishable. He would seek dismissal of the petition contending that the petitioner has to approach the concerned Court under Sections 451 and 457 of the Cr.P.C. for release of gold. The earlier judgments which were following the judgment of the Apex Court in the case of Sunderbhai Ambalal Desai v. State of Gujarat , (2002) 10 SCC 283 , would not become applicable to the facts obtaining in the case at hand. He would contend that the petitioner be left with the remedy of approaching the concerned Court by filing an application under Sections 451 and 457 of th