The Allahabad High Court has directed the Income Tax Authorities to compensate petitioner for jewellery seized during proceedings but subsequently lost by the respondent bank.

The petitioner sought compensation of ₹94,64,844 along with 9% interest and additional damages for the mental agony, harassment, and financial hardship caused by the authorities’ alleged negligence and arbitrariness.

A Bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri noted, “It is clear from the facts that the Income Tax Authorities are delaying the entire process. The money should have been returned to the petitioner in the year 2023 itself when the petitioner has agreed upon the settled amount of Rs.41,52,146/-. However, no money has been received by the petitioner with regard to the seized jewellery, which has been lost by the respondent Bank. The petitioner is not concerned with whether the money is paid by the respondent Bank or by the Income Tax Authorities.”

Advocate Amit Singh appeared for the Petitioner and Advocate Naveen Chandra Gupta appeared for the Respondents.

The Court observed, “As the jewellery has been seized by the Income Tax Authorities, the loss of jewellery would amount to loss by the Income Tax Authorities, and accordingly, payment of the said jewellery has to be made by the Income Tax Authorities.”

Accordingly, the Court directed, “the Income Tax Authorities are directed to look into the valuation done by the petitioner on July 30, 2025 at page 72 to 75 of the writ petition and upon verification of the said valuation, make payment of the said amount within a period of four weeks from date. We make it clear that the petitioner should be paid the amount within the aforesaid period, otherwise the Income Tax Authorities shall be liable to pay penal interest of 12% on the valuation of the Jewellery starting from the date of seizure of the said jewellery. The Income Tax Authorities are at liberty to recovery the amount from the respondent Bank in accordance with law.”

Disposing of the petition, the Bench made it clear that the compensation must be paid within the stipulated time to secure the petitioner’s claim.

Cause Title: Shri Sanjay Kumar Jain v. Union Of India & Ors., [2025:AHC:173976-DB]

Appearance:

Petitioner: Advocate Amit Singh

Respondents: A.S.G.I., Advocates Ashutosh Mishra, Gaurav Mahajan, Naveen Chandra Gupta, Satish Chaturvedi, Shalini Goel

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Justice Shekhar B. SarafJustice Praveen Kumar GiriAllahabad High Court

Suchita Shukla

Associate Editor

Suchita Shukla is an Associate Editor at Verdictum, with a strong foundation in legal research and writing, she brings over 4.5 years of experience to the table, having honed her skills in the dynamic field of law. She covers Supreme Court and High Courts. She completed her BA-LLB (Hons.) 5-year course with specialisation in Intellectual Property rights from Galgotias University. Since 2019, apart from having worked at a legal publishing house she has also ventured into legal journalism.