IN THE HIGH COURT OF KARNATAKA AT DHARWAD
M.NAGAPRASANNA, J.
Muthoot Finance Limited – Appellant
Versus
The State of Karnataka – Respondent
Writ Petition No. 105489 of 2024
Decided On : 08-12-2025
| Table of Content |
|---|
| 1. nature and purpose of the writ petition (Para 1 , 2) |
| 2. circumstances of the gold pledging and police interaction (Para 3) |
| 3. arguments made by the petitioner and the respondent (Para 5 , 6) |
| 4. judicial precedents on seizure processes (Para 7 , 8 , 8) |
ORDER :
1. The petitioner is before this Court seeking for the following prayer:
“a) A writ order in the nature of quashing the impugned order dated. 17.02.2024 as per Annexure-D and declare that seizure is arbitrary and violation of fundamental rights guaranteed under the Articles 14 and 19 and direct to hand over the seized articles to the petitioner which is seized as per the Annexure-C by the Sirsi N.M. Police Station P.S. Crime No.30/2023 to meet the ends of justice (1)(g) of the Constitution of India to meet the ends of justice. (1)(g) of the to meet ends of justice.
b) Any other such reliefs as this Hon’ble Court deems fit.”
2. Heard the learned counsel Sri. A.A. Kalebudde appearing for the petitioner.
3. Learned counsel appearing for the petitioner would submit that, the issue in the lis stands covered by the judgment rendered by the Co-ordinate Bench of this Court in Writ Petition No.100245/2025 on 08.07.2025, wherein it is held as follows:
“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 of crime, it is the averment that the 2nd 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 Rs. 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 accep
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.
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 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.
Quasi-judicial proceedings require strict adherence to principles of natural justice, including the right to cross-examine witnesses, which was violated in this case, rendering the confiscation order....
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