A City Civil and Sessions Court in Bengaluru has granted anticipatory bail to three individuals, including a pregnant woman and a senior citizen, accused of cheating the State Bank of India (SBI) by pledging gold-plated silver ornaments to secure loans worth lakhs of rupees. The order, delivered by Judge Sri. A.V. Patil on April 6, 2024, provides legal protection to Smt. Nikitha Jain, Narapatraj G., and Gopalakrishna K. in connection with the fraud investigation initiated by the Govindaraja Nagara Police.
Background of the SBI Gold Loan Scam
The legal proceedings were triggered by a complaint lodged on March 25, 2024, by Sri Sudarshan Reddy, the Branch Manager of SBI Magadi Road Branch. According to the prosecution, the petitioners, along with another individual, had obtained gold loans totaling approximately Rs. 89 lakhs on various dates by pledging what was purportedly gold jewelry.
The suspicion of the bank officials was aroused when the petitioners failed to pay the regular Equated Monthly Installments (EMIs). To verify the collateral, the bank summoned penal appraisers to re-examine the pledged ornaments. Initial tests using the standard Nitric Acid and Touch Stone methods proved inconclusive, leading appraisers to suggest that the jewelry needed to be cut to ascertain its true purity.
Discovery of Gold-Plated Silver Ornaments
When the bank informed the petitioners of the need for a destructive purity test, the petitioners initially resisted, claiming they did not want their ornaments damaged. However, they later assured the bank they would close the loan accounts. Records show that they paid back nearly Rs. 32.95 lakhs in two installments between February and March 2024.
Despite these payments, the bank persisted with the verification process. On March 18, 2024, the third petitioner, Gopalakrishna K., provided a consent letter allowing the bank to cut the ornaments for testing. The following day, the results revealed that the jewelry was not pure gold; instead, it consisted of silver ornaments with a heavy gold plating. The bank alleged that the group had intentionally cheated the institution and remained due for over Rs. 56 lakhs.
Arguments for Anticipatory Bail
The petitioners moved the court under Section 438 of the Cr.P.C., seeking protection from arrest. Their counsel, Sri Mani Shanmugam Yadav, argued that the petitioners were innocent victims of a misunderstanding. He highlighted that Nikitha Jain (Petitioner No. 1) is currently pregnant and has a small child, while Narapatraj G. (Petitioner No. 2) is a 66-year-old senior citizen.
The defense raised a crucial point regarding the bank’s internal procedures. On the day the gold was pledged, the bank’s own official appraiser checked and verified the ornaments before the loan was sanctioned. The counsel argued that the petitioners had already repaid a substantial sum of Rs. 32.95 lakhs, which demonstrated a lack of intent to cheat. They contended that the bank officials were acting against the law by registering a criminal case without proper notice.
The Court’s Reasoning and Decision
In evaluating the petition, the court noted that the offence punishable under Section 420 of the IPC (Cheating) is triable by a Magistrate and does not carry the death penalty or life imprisonment. Judge A.V. Patil observed that “bail is the rule and jail is an exception,” especially when the accused are permanent residents and ready to cooperate with the investigation.
The court took specific note of the petitioners’ repayments. The judge remarked that if the petitioners truly intended to cheat the bank, they likely would not have repaid nearly Rs. 33 lakhs just weeks before the complaint was filed. The court found that since the bank’s own appraisers had initially cleared the gold, the question of whether there was a criminal conspiracy or a failure in appraisal was a matter for trial.
Conditions of the Anticipatory Bail
The court allowed the petition and directed that in the event of their arrest, the Govindaraja Nagara Police must release the petitioners on bail. Each petitioner is required to execute a personal bond of Rs. 70,000 with one surety of a like sum. The court imposed the following conditions to ensure a smooth investigation:
- The petitioners must appear before the respondent police within 20 days.
- They are prohibited from tampering with prosecution witnesses.
- They must cooperate with the court during the trial and appear for investigation as and when called by the Investigating Officer (I.O.).
- They must furnish attested copies of their Aadhaar cards and residential proof to the police.
The judge clarified that this order does not restrict the rights of the police to conduct a thorough investigation into the charges. The petitioners now remain under the protection of this order while the Govindaraja Nagara Police continue their probe into the gold loan discrepancy.