Formulate Proper Guidelines Relating to Pledging of Stolen Gold, Ascertainment of Ownership: Karnataka HC To Law Commission
The Karnataka High Court took note of the innumerable matters where stolen gold is pledged with gold finance companies and directed the Law Commission to frame proper guidelines in relation to the pledging of stolen gold, ascertainment of ownership, identity of the person pledging the gold and on other related aspects.
The High Court passed such a direction while considering a Writ Petition seeking a declaration that the interference by the Official Respondents in the Petitioner's business by forcefully seizing the gold articles pledged by its customers was arbitrary and in violation of the fundamental rights guaranteed under articles 14 and 19(1)(g) of the Constitution.
The Single-Judge Bench of Justice Suraj Govindaraj held, “The true owner of the gold cannot be deprived of the use of the gold, merely because the same is pledged with a gold finance company after being stolen from such true owner. The Gold Finance Company is vested with a duty to carry out proper due diligence before accepting the gold as a pledge for a loan disbursed.”
Advocate Anish Jose Antony represented the Petitioner while Additional Government Advocate Mohammed Jaffar Shah represented the Respondents.
The petitioner had challenged the notice issued by the respondent Station House Officer to make available certain gold articles said to be in the custody of the Petitioner which were claimed to have been stolen and pledged with the petitioner.
The Counsel for the Petitioner submitted before the Bench that the petitioner would cooperate with the investigation but he would have to retain the gold which had been pledged with the petitioner since the petitioner has a right over the same being a Pledgee/pawnee. It was also the petitioner’s case that a right is vested with the petitioner on account of the pledge of the said gold as a security and that security cannot be taken away on the ground that the gold was stolen. It was further contended that the ownership of the gold would have to be established by the person claiming it by way of an appropriately instituted civil suit.
On a perusal of the submissions, Justice Govindaraj asserted, “I am of the considered opinion that the petitioner being only a pledgee/ pawnee would have only right that the pledgers/pawner has in the said gold and the petitioner cannot claim any right more than that.”
It was made clear by the Bench that it is for the Court seized of the matter to decide as to in whose favour the gold has to be returned, if an application under Section 454 of the earlier Code of Criminal Procedure and now Section 500 of the BNSS were to be filed.
The Bench also noticed the fact that innumerable matters have been coming up before the court where stolen gold is pledged with a gold finance company and held, “I’am of the considered opinion that this aspect would have to be examined by the concerned authorities and proper guidelines have to be formulated in relation to such pledging of gold, ascertainment of ownership, identity of the person pledging the gold, implication of pledging stolen gold, manner of dealing with such gold when criminal proceedings are taken up etc., etc.,. Therefore, I request the Law Commission, Karnataka to look into this matter and formulate necessary guidelines/rules or the like as deemed fit.”
The Bench thus directed the petitioner to cooperate with the Investigating Officer and make available all the details relating to the pledge as also permit the inspection of the gold, which if required the Investigation Officer can take receipt of and deposit with the Court seized of the matter, on concluding that the said gold is stolen.
Disposing of the Petition, the Bench held, “...it is made clear that the police officer cannot retain the gold in his possession, but would have to deposit the same with the court seized of the matter. The court seized of the matter while considering any application for release of the gold or at the time when the court were to pass an order of release for any reason whatsoever, would have to issue notice to the Petitioner and afford an opportunity of hearing to the petitioner before ordering the release.”
“Registrar (Judicial) is directed to forward a copy of this order to the Chairman, Karnataka Law Commission”, it concluded.
Cause Title: Muthoot Finance Limited v. State Of Karnataka & Anr. (Neutral Citation: 2024:KHC:53354)
Appearance
Petitioner: Advocate Anish Jose Antony
Respondents: Additional Government Advocate Mohammed Jaffar Shah
