Muthoot Fincorp Limited v The Station House Officer, Palakkad Town South Police Station, Palakkad District; Narayana Swamy; Amalraj R.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE K.HARIPAL THURSDAY, THE 10[TH] DAY OF MARCH 2022 / 19TH PHALGUNA, 1943** ## **WP(CRL.) NO. 299 OF 2021** ## **PETITIONER:** MUTHOOT FINCORP LIMITED, HAVING ITS REGISTERED OFFICE AT MUTHOOT CENTRE, PUNNEN ROAD, THIRUVANANTHAPURAM-695 001, REPRESENTED BY ITS LEGAL MANGER, MR.VINOD VIJAYAN. BY ADVS. B.J.JOHN PRAKASH P.PRAMEL NIMMY SHAJI BINNET M.VAVACHAN ## **RESPONDENT:** 1 THE STATION HOUSE OFFICER, PALAKKAD TOWN SOUTH POLICE STATION, COIMBATORE ROAD, KUNATHURMEDU, PALAKKAD DISTRICT, PIN-678 013. 2 MR.NARAYANA SWAMY, S/O.MR.ESWARA IYYER, PALLIPPURAM GRAMAM, PALAKKAD-678 004, KERALA. 3 MR.AMALRAJ.R., S/O.RAJUKANNU, GANDHINAGAR COLONY, VANNAMADA P.O., KOZHIPATHY, PALAKKAD-678 555. BY ADV GOVERNMENT PLEADER SR.PP - SRI. HRITHWIK C.S. THIS WRIT PETITION (CRIMINAL) HAVING COME UP FOR HEARING ON 01.02.2022, THE COURT ON 10.03.2022 DELIVERED THE FOLLOWING: W.P.(Crl)No.299 of 2021 2 ## **JUDGMENT** This is a Writ Petition filed under Article 226 of the Constitution seeking the following reliefs: - “(i) To issue a writ of mandamus or any other appropriate wirt, order or direction, restraining the 1[st] respondent from effecting recovery of the gold ornaments pledged by the 3[rd] respondent with the petitioner at their Gopalapuram branch; - (ii) Declare the seizure of the gold articles pledged by the 3[rd] respondent as evidenced in Exhibit P2(a) to Exhibit P2(b) which are different from the ones described in Exhibit P1 are not warranted in the investigation of Crime No.1865/2021 on the basis of complaint of the 2[nd] respondent”. 2. Petitioner is Muthoot Fincorp Limited, represented by its Legal Manager. It is stated that the petitioner is a non-banking finance company registered under the Companies Act and duly regulated with the Reserve Bank of India. Petitioner is engaged in providing credit facility to the general public against pledge of gold ornaments, through its 3,600 plus branches spread across India, including one at Gopalapuram in Palakkad. The third petitioner is a customer of the petitioner at Gopalapuram branch W.P.(Crl)No.299 of 2021 3 who had opened two subsisting gold loan accounts with the petitioner. He had pledged 62.27 grams of gold on two occasions on 25.09.2021 and 06.10.2021 and borrowed an amount of Rs.1,65,000/- from the petitioner. At the instance of the 2[nd] respondent, Crime No.1865/2021 was registered by the Palakkad Town South police, alleging offence under Sections 457, 380 and 461 of the IPC alleging that gold and diamond ornaments worth Rs.25.7 lakhs was stolen from his house between the period 09.08.2021 and 26.08.2021. The 3[rd] respondent is a vintage customer of the petitioner, who had been promptly redeeming gold. Pledging as per Ext.P2(a) and P2(b) were done in September and October 2021, whereas the alleged theft was committed in his house in August 2021, but the 2[nd] respondent had made a complaint only after two months. 3. According to the petitioner, on 22.10.2021, the first respondent came to the petitioner’s branch at Gopalapuram and sought to recover certain gold ornaments pledged with the petitioner by the 3[rd] respondent under the guise of effecting W.P.(Crl)No.299 of 2021 4 recovery under Section 27 of the Evidence Act. The description of the documents in Ext.P1 and ornaments pledged with the petitioner are different and cannot be related to the gold allegedly lost from the premises of the 2[nd] respondent. Therefore, the ornaments pledged by the 3[rd] respondent with the petitioner ipso facto do not prove that the same is connected with the crime alleged in Ext.P1. In reply to the demand Ext.P3 letter was sent by the petitioner to the first respondent. According to the petitioner, possibility of collusion between respondents 2 and 3 also cannot be ruled out. Now the 1[st] respondent is bend upon to recover the gold ornaments pledged by the 3[rd] respondent with the petitioner, which is illegal. The items were received by the petitioner as a bonafide pledgee. The 1[st] respondent has no power to usurp into the business of the petitioner under the guise of recovery of the gold ornaments. Therefore, the act of the 1[st] respondent is sought to be restrained. 4. The Investigating Officer, SHO Town South police station, Palakkad filed a statement. According to him, W.P.(Crl)No.299 of 2021 5 Crime No.1865/2021 was registered originally under Section 457, 380 and 461 of the IPC on the statement given by the 2[nd] respondent, aged 82 years. Investigation revealed that immediately after reporting the incident to the police, his servants Amalraj and Kalamani absconded after switching off their mobile phones. Both of them were arrested on 16.10.2021 and some of the stolen items were recovered as per the confession of the accused. On that basis, offence under Sections 462 and 381 of the IPC were also incorporated. As per the confession statement of the accused, 60 grams of gold ornaments were re-designed to their choice as gold chain of 4.5 sovereigns and wrist bracelets of three sovereigns from Sreeram Kounder Jewellery at Pollachi on 28.10.2021 and the same was pledged at Muthoot Fincorp, Gopalapuram branch for an amount of Rs.1,65,000/-. Accordingly, police proceeded to the petitioner's branch, the Manager of the branch identified the accused and admitted the fact of pledging; he also submitted an affidavit that he would produce the pledged ornaments before Court as and when W.P.(Crl)No.299 of 2021 6 directed; the affidavit was seized under mahazar dated 22.10.2021. According to the Investigating Officer, the property pledged by the accused in the petitioner's concern is the ‘subsequent portion of the stolen property’ and recovery of those should be mandatory for this case; hence the application is sought to be dismissed. 5. I heard the learned counsel for the petitioner and the learned Senior Public Prosecutor. 6. Learned counsel for the petitioner re-iterated the points raised in the petition. According to him, they used to take gold only after verifying the KYC details and ascertaining the identity of the persons; accounts are opened following all the precautionary measures. They are functioning strictly adhering to the guidelines issued by the Reserve Bank of India. Referring to the statement of the Investigating Officer, he said that it will not match with Exts.P2(a) and P2(b) pledge cards issued by the petitioner on getting items. 7. The learned counsel for the petitioner W.P.(Crl)No.299 of 2021 7 complained that the police is acting as a recovery agent of the 2[nd] respondent and in the process, the gold ornaments kept as security of the petitioner will be denied to him. According to him, it is very pertinent from the statement of the Investigating Officer itself that what were pledged with the 3[rd] respondent are not the gold ornaments allegedly thieved from the house of the 2[nd] respondent. The Investigating Officer is trying to recover the pledged articles on experimental basis. Petitioner is a law abiding institution and therefore, the attempt of the 1[st] respondent to seize the gold ornaments are sought to be restrained. 8. The learned Senior Public Prosecutor has strongly opposed the application. 9. According to the learned Public Prosecutor, large quantity of gold ornaments were stolen from the house of the 2[nd] respondent when himself and his wife were away in hospital. The 2[nd] respondent is a reputed lawyer of Palakkad and it is uncharitable to say that he had acted in collusion with the 3[rd] respondent. The police party had reached the branch of the W.P.(Crl)No.299 of 2021 8 petitioner as led by the 3[rd] respondent on the basis of the confession statement given by him; the branch Manager had given an undertaking to produce the gold before police. In violation of the undertaking, now they have approached this Court on experimental basis to get away from the undertaking in writing. 10. The summary of the case diary also has been made available for perusal. That crime was registered on 12.10.2021 on the strength of the First Information Statement given by the 2[nd] respondent, an octogenarian alleging offence under Sections 451, 380 and 461 of the IPC. The First Information Statement is not made available, but no one has been arrayed as accused in the FIR. Extract from the case diary indicate that the alleged theft was committed in the residence of the 2[nd] respondent between 09.08.2021 and 26.08.2021 from the almirah kept in the house and the chest of pooja room of his house by name Vasanthi at Pallippuram gramam in Palakkad. Gold ornaments worth Rs.26,00,000/- was stolen between 09.08.2021 and 26.08.2021. It has come out in investigation that the 82 year W.P.(Crl)No.299 of 2021 9 old 2[nd] respondent and his wife Uma are the residents in the house with servants by name Lalitha, Lakshmi, Amalraj and Kala. His wife is a heart patient, who required constant attention of a bystander. Accordingly, services of Amalraj and his wife Kala were obtained through his friend Thirumalai Swami. Between 09.08.2021 and 19.08.2021, both himself and his wife were in Co-operative Rajeev Gandhi Hospital, Palakkad for the treatment of the wife. Within two days of their discharge from hospital, both Amalraj and his wife Kala got relieved from their service stating that they are not interested in continuing. On 04.10.2021, in connection with Navarathri, on verifying the gold and diamonds kept in the pooja room, the key of the almirah were found missing. Similarly, the gold ornaments kept in the chest in the pooja room were also found missing. With the help of a mechanic, when the almirah was opened, gold and diamond jewellery upkept there were also found missing. Then they made verification in the locker in State Bank of India, Palakkad branch, so that some delay occurred in alerting the police. As there was suspicion on Amalraj W.P.(Crl)No.299 of 2021 10 and his wife Kala, they were tried to be traced and found that their mobile phones were switched off, that they were shifting to Dindigal, Pollachi and Tirupur etc., in Tamil Nadu. On investigation, it came out that both of them were roaming around on a new motorcycle and were leading a very luxurious life. Ultimately, both of them were arrested on 16.10.2021. On interrogation, they confessed the guilt and some of the stolen items were seized from the house in Dindigal and at Vannamada. Those items were recovered under mahazers. Thus offence under Sections 381, 462 read with 34 of the IPC were also incorporated. The finger prints traced from the spot of occurrence was found matching with the finger prints of the 3[rd] respondent. The 3[rd] respondent was taken into police custody and some of the items were seized from Sreeram Counter Jewellery at Pollachi in gold nugget form. Similar recoveries were effected from Vijayalakshmi jewellery at Thirupur in Tamil Nadu and Sumangali Jewellery at Gopalapuram also. Similarly, the confession statement of the 3[rd] respondent indicates that they had W.P.(Crl)No.299 of 2021 11 pledged 60 grams of gold in the petitioner branch on 20.10.2021; the 3[rd] respondent had led the police party to the Pollachi Sreeram Counter Jewellery where the jewellery owner and staff members recognized the 3[rd] respondent. They had sold certain gold items in return of a gold chain weighing 4 ½ sovereign and Rs.25,000/-, then the said gold chain was pledged with the petitioner for Rs.1,65,000/-. In other words, it came out that the pledged items were made transforming the articles stolen from the house of the 2[nd] respondent. For the proper investigation of the case, both the chains pledged with the petitioner have to be recovered. It is also stated that the defacto complainant is a former lawyer having good reputation and accused Nos. 1 and 2 had thieved the gold ornaments from his house taking advantage of their old age and ailments. 11. The petitioner has buttressed two arguments. Firstly, that the delay in registering the crime is suspicious; even though the alleged incident had happened in August 2021, the prosecution was launched only in October 2021, which cannot be W.P.(Crl)No.299 of 2021 12 appreciated. Along with it is stated that the possibility of collusion between respondents 2 and 3 cannot be ruled out. But after going through the documents made available before Court, I have no doubt that such an argument is uncharitable and farfetched. It is evident that while the octogenarian defacto complainant was away in the hospital, attending his ailing wife, the 3[rd] respondent and his wife who were servants were committing robbery from the house; large quantity of gold and diamond ornaments were thieved from the house. Later they went absconding and were roaming around. After arresting them, many gold ornaments thieved from the house were recovered, by the time some of the items were seized, it were transformed into ingots. Such ingots were also recovered and produced before court. 12. The petitioner claims that the 3[rd] respondent is a vintage customer. The reason stated is that he had pledged gold ornaments with the petitioner earlier also and had redeemed the same. Going by Ext.P3, according to him, ' ornaments cannot be W.P.(Crl)No.299 of 2021 13 construed as part of the crime, or cannot be considered as material objects or stolen property'. He wanted to say that he is a bonafide pledgee and his interest cannot be infringed. He wanted to take the advantage of difference in description of the gold ornaments. 13. Regarding the delay, this Court has occasion to consider such an aspect in **State of Kerala v. Mohanan [1987(2) KLT 64]** . In the facts of the case, this Court held that an omission to report the offence to the police cannot be taken as a ground to discard the testimony. A person may have varied explanations for not reporting the matter to the police. For that reason, it is unrealistic to attach any stigma to the testimony of such person and brand the case as false. 14. As noticed earlier, the 2[nd] respondent and his wife were away in hospital for about ten days. Within two days of their discharge, the 3[rd] respondent and his wife voluntarily left the service of the 2[nd] respondent. On realising that gold and diamond jewellery were missing from the house, they wanted to cross check with the items kept in the bank locker. Therefore, the delay W.P.(Crl)No.299 of 2021 14 in launching the prosecution cannot be highlighted as a big issue by the petitioner. Moreover, the statement of the Investigating Officer clearly indicates that large quantity of gold was seized through the 3[rd] respondent and his wife. Their subsequent conduct was also highly suspicious. Therefore, the delay aspect cannot be highlighted by the petitioner. 15. The discrepancy in the description of the items pledged with the petitioner is also not convincing. On the confession of the culprits, the police had reasons to believe that some of the gold ornaments were taken to Sreeram Kounder Jewellery at Pollachi and in exchange of the same, two gold chains were obtained besides an amount of Rs.25,000/- and those gold chains were pledged with the petitioner in lieu of Rs.1,65,000/-. Therefore, the ornaments pledged with the petitioner can be taken as stolen items, in real meaning of the term. 16. The investigation is the domain of the police. Police has reasons to believe that the 3[rd] respondent and his wife W.P.(Crl)No.299 of 2021 15 had committed theft of gold and diamond items from the house of the 2[nd] respondent and disposed of the same in different manner, those items have to be recovered. The fact that the petitioner is a reputed financial institution, that it is their security gold etc., cannot stand on the way of free flow of investigation conducted by the police. After considering the rival contentions and materials, I have no doubt that the petitioner is not entitled to get any relief. The Writ Petition lacks merits and is dismissed. No cost. Sd/- **K.HARIPAL JUDGE** //True Copy// P.A to Judge Jms/08.03 W.P.(Crl)No.299 of 2021 16 ## **APPENDIX OF WP(CRL.) 299/2021** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE FIR NO.1865/2021 DATED 12.10.2021. Exhibit P2 A TRUE COPY OF THE APPLICATION FOR GOLD LOAN DATED 25.09.2021. Exhibit P2 B TRUE COPY OF THE APPLICATION FOR GOLD LOAN DATED 06.10.2021. Exhibit P3 TRUE COPY OF THE REPLY LETTER DATED 22.10.2021 ISSUED BY THE PETITIONER. Exhibit P4 TRUE COPY OF THE ORDER DATED 04.03.2021 IN WPC NO.4332/2021 OF THIS HON'BLE COURT.