Supreme Court: Bank can’t revalue gold once loan repaid | India News
NEW DELHI: The Supreme Court has ruled that a bank cannot re-evaluate gold pledged against a loan after it is repaid and restored the FIR/chargesheet against bank officials, which was lodged by the borrower alleging that they did not return the ornaments on ground that those were found to be fake.A bench of Justices Sanjay Karol and Manoj Misra said in a judgment last week, “It is true that the appellant (Abhishek Singh) repaid the amount, but with substantial delay. However, once the loan is settled, it is difficult to understand as to why the gold was revalued and auctioned.”Singh had taken a loan of Rs 7.7 lakh from the Motijheel branch of Bank of India in Bihar on July 22, 2020, after pledging 254gm of 22-carat gold ornaments as security. He repaid the loan on March 31, 2023.However, when he demanded the ornaments back, the bank told him that when he had not paid, back the loan with interest on time, the ornaments were re-evaluated and were found to be fake. As he had not repaid the loan amount at the time of revaluation, the gold-plated ornaments were confiscated and auctioned. The bank also lodged an FIR against Singh for cheating on May 22, 2023.Singh too lodged an FIR accusing the bank officials of misappropriating the gold ornaments. The bank officials challenged registration of the FIR against them before Patna high court (HC), which quashed it, saying the FIR was a counter to the FIR lodged against them by the bank. Singh appealed before Supreme Court.Faulting the high court for quashing the FIR against bank officials, the top court said, “The discussion made by the high court in quashing the FIR in no way addresses the possibility of the respondents’ possible involvement in the misappropriation of the gold pledged.”Writing the judgment, Justice Karol said, “At all times, the appellant had no access to the gold which, after its initial valuation, was always kept in the safe custody of the bankers. Fraud, if any, whether perpetrated at the first instance of valuation or later, is a matter which could be unearthed only after a trial based on the evidence led by the parties.”“But, as of now, in no circumstances, it can be said that no prima facie case regarding commission of an offence, as alleged in the FIR, is made out from its perusal.” The court ordered the bank officials to face trial in the case lodged by Singh.
