Bengaluru: Karnataka high court has ruled that any individual or institution in possession of stolen property has no legal right to delay or turn down its production when demanded by police.“Possession is no shield when it comes to stolen property even if the holder is a gold loan company,” Justice Suraj Govindaraj said, dismissing a petition by IIFL Finance.The case arose from a complaint by Karur Vysya Bank, which alleged an employee from its gold loan division had allegedly swapped customers’ gold ornaments with spurious ones and then pledged the stolen gold, weighing 5kg, with various financial institutions to raise loans.During investigations, Bengaluru police issued a notice to IIFL Finance, seeking information about the pledged gold and documents submitted by the borrowers at the time of loan sanction.IIFL Finance challenged the notice, arguing it had accepted the gold in good faith and disbursed loans after following due procedures. The company claimed contractual obligations prevented it from parting with the pledged gold, though it was willing to cooperate with the investigation if the gold was not seized.The bank argued its legal duty was to restore the stolen gold to its customers. Supporting the investigation, the government advocate submitted that the probe revealed the gold pledged with IIFL was stolen allegedly by the accused officer.The court rejected IIFL’s arguments and held any claimed security interest of the financier — even if contractually valid — cannot override the superior rights of the true owner of stolen property or obstruct investigations.The court said gold articles fall within the scope of “other thing” under Section 94(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023. Investigating officers are empowered to issue notices demanding their production from anyone believed to be in possession of them.MSID:: 128205130 413 |
