Supreme Court Restores FIR Alleging Fraud in Gold-Pledged Loan, Holds High Court Improperly Quashed Proceedings

A Bench of Justice Sanjay Karol and Justice Manoj Misra heard the criminal appeal filed by Abhishek Singh challenging the Patna High Court's order quashing an FIR registered on 7th September, 2023 under Sections 420, 406 and 34 IPC relating to a dispute over gold pledged as security for a bank loan.

The Court allowed the appeal, held that the High Court had erred in quashing the proceedings and restored the FIR to the file for trial. The Bench emphasised that the power under Section 482 CrPC to quash criminal proceedings was narrowly circumscribed and that the High Court could not undertake a mini-trial or appreciate evidence at the quashing stage. The Court, in its reasoning, observed: “8. It is no more res integra that exercise of power under Section 482 CrPC to quash a criminal proceeding is only when an allegation made in the FIR or the charge-sheet constitutes the ingredients of the offence/offences alleged. Interference by the High Court under Section 482 CrPC is to prevent the abuse of process of any court or otherwise to secure the ends of justice. It is settled law that the evidence produced by the accused in his defence cannot be looked into by the court, except in very exceptional circumstances, at the initial stage of the criminal proceedings. It is trite law that the High Court cannot embark upon the appreciation of evidence while considering the petition filed under Section 482 CrPC for quashing criminal proceedings. It is clear from the law laid down by this Court that if a prima facie case is made out disclosing the ingredients of the offence alleged against the accused, the Court cannot quash a criminal proceeding.”

Background

The dispute arose from a gold loan of ₹7,70,000 granted to the appellant on 22nd July, 2020 by Bank of India, Motijhil Branch, against 254 grams of 22-carat gold jewellery. The bank issued recall notices in 2022 and, after the account was treated as NPA, revaluation of the pledged ornaments allegedly revealed they were gold-plated and not genuine. The bank de-empanelled an initial valuer and reported the matter, following which an FIR under Sections 420 and 379 IPC was registered on 22nd May, 2023; the FIR under challenge was registered after the appellant lodged a complaint under Section 156(3) CrPC on 24th May, 2023.

The High Court allowed the respondents’ Section 482 CrPC petition and quashed the later FIR, characterising it as “a mere counterblast” to the bank’s earlier FIR, asserting it was lodged “with an ulterior motive and also as an afterthought” and describing the complaint as “malicious.” The High Court also relied on the absence of an affidavit as per the Court’s direction in Priyanka Srivastava v. State of UP at certain paragraphs and concluded that, even on the complaint's face, no offence was made out.

On appeal, the Supreme Court reviewed the material and noted that the High Court had ventured into merits by referring to the bank’s fraud prevention policy, the removal of the first valuer, and by making findings about the appellant’s intention—matters which required evidence and trial. The Bench observed that although the appellant had delayed payment and the account had been NPA, the revaluation report dated February 2023 followed the appellant’s payment of dues and return requests dated April 2023, raising questions that could not be finally resolved without trial. The Court recorded that the High Court’s order did not address the possibility of misappropriation or tampering by bank personnel or valuers, that the appellant had no access to the pledged gold while it remained in bank custody, and that these factual disputes necessitated trial.

The Supreme Court held that prima facie a case was made out and that quashing at that stage was improper. It restored the proceedings arising out of the subject FIR, clarified that no opinion was expressed on guilt or innocence, and directed communication of the order to the Registrar General of the Patna High Court for transmission to the concerned trial court. The appeal was allowed and pending applications were closed.

Case Details: Case No.: 2025 INSC 807 Case Title: Abhishek Singh v. Ajay Kumar & Ors. Appearances: For the Petitioner(s): Not available For the Respondent(s): Not available