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IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
M.NAGAPRASANNA
Muthoot Money Limited – Appellant
Versus
State of Karnataka – Respondent
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 2nd respondent/Station House Officer of Vidyagiri Police Station alleging offence punishable under Section 394 of the IPC. On registration o
Financial companies must seek relief through legal channels when police seize pledged items under allegations of theft, ensuring adherence to established guidelines and protocols.
The court upheld that seizure actions by police must comply with Articles 14 and 19, reaffirming the necessity for following established legal guidelines when handling seized property.
The rights of a pledgee over pledged gold are limited to those of the pledger, and ownership must be established through civil proceedings, necessitating guidelines for handling pledged stolen gold.
Pawnee rights under the Indian Contract Act do not extend to crime proceeds; compliance with investigative notices prevails to protect victims' property rights.
The main legal point established is that a finance institution must follow fair practices and procedures in advancing loans on pledged jewels, and has rights in relation to the pledged jewels.
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