State Of Karnataka vs. Jar Gold Retail Private Limited
Original PDF →Batch of these petitions filed by the State call in question separate orders passed by the Principal City Civil and Sessions Judge, Bengaluru on I.A.Nos.I, II and III of 2026 in Crime No.25 of 2026. Therefore, they are taken up together and considered by this common order.
Facts in brief, germane, are as follows:
The respondent/JAR Gold Retail Private Limited (‘Company’ for short), a Company registered under the provisions of the Companies Act, 2013 is an e-commerce seller of gold. A crime is registered against the said Company in Crime No.25 of 2026, which comes to be challenged before this Court in Writ Petition No.5968 of 2026. This Court rejected the said petition in terms of its order CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
5 dated 04-03-2026. Challenge to the said order was made before the Apex Court and the Apex Court declined to entertain Special Leave Petition against the order passed by this Court. Thus, insofar as this Court is concerned, that order became final. The issue in the lis is not with regard to the said proceeding. Subsequent to dismissal of the writ petition, applications come to be filed by the Company before the Court of Sessions under Sections 497 and 503 of the Bharatiya Nagarika Suraksha Sanhita, 2023 (‘BNSS’) seeking release of various gold and silver articles, which were seized at the time of search conducted by the State. After hearing the petitioner/State and the respondent/accused, the concerned Court allows applications directing release of gold that was seized by the Police, among other articles. The State, claiming to be aggrieved, is before this Court calling in question those orders. At the time of hearing of the petitions on 16-04-2026, this Court passed the following order: “Petitioner-the State is before the Court calling in question an order of the Concerned Court dated 04.04.2026. The issue arises out of a crime registered against the accused for offences punishable under the Banning of Unregulated Deposit Schemes Act, 2019. This was challenged before this Court and the challenge is repelled by an order dated 04.03.2026. 6
After the dismissal of the petition, the respondent appears to have filed an application before the concerned Court on 18.03.2026 Seeking release of gold, defreezing of the account and opening of the premises that stood closed pursuant to the registration of the crime.
The concerned court observing that there is lot of confusion about the registration of the crime, has given away everything by the order.
There was no confusion about the registration of the crime as this Court had already rejected the petition challenging the crime. Therefore, the concerned Court has overstepped its juri iction in observing that there is still confusion in the crime, notwithstanding the order passed by this Court dismissing the Petition. The Court not stopping at that, the Court appears to have now issued a show cause notice to the prosecution, as to why the order dated 04.04.2026 is not complied with. This is adding salt to injury.
Therefore the Show cause notice so issued shall remain stayed till the next date of hearing.
If no item is released in terms of the order, nothing shall be released till the next date.
Learned counsel for the respondent submits that for the purpose of payment of salary of 200 employees who work in Jar Gold Retail Private Limited, the accounts need to be in operation. Therefore for the purpose of payment of salary on the requisition submitted by the respondent as to the amount of salary, the account shall be defrozen only to that extent.
List this matter on 21.04.2026.”
On 27-04-2026, this Court passed the following order: “Heard Sri P.Prasanna Kumar, learned counsel for respondent.
“This Court on 16-04-2026 had passed the following order:
7 “Petitioner-the State is before the Court calling in question an order of the Concerned Court dated 04.04.2026. The issue arises out of a crime registered against the accused for offences punishable under the Banning of Unregulated Deposit Schemes Act, 2019. This was challenged before this Court and the challenge is repelled by an order dated 04.03.2026. After the dismissal of the petition, the respondent appears to have filed an application before the concerned Court on 18.03.2026 Seeking release of gold, defreezing of the account and opening of the premises that stood closed pursuant to the registration of the crime.
The concerned court observing that there is lot of confusion about the registration of the crime, has given away everything by the order.
There was no confusion about the registration of the crime as this Court had already rejected the petition challenging the crime. Therefore, the concerned Court has overstepped its juri iction in observing that there is still confusion in the crime, notwithstanding the order passed by this Court dismissing the Petition. The Court not stopping at that, the Court appears to have now issued a show cause notice to the prosecution, as to why the order dated 04.04.2026 is not complied with. This is adding salt to injury.
Therefore the Show cause notice so issued shall remain stayed till the next date of hearing.
If no item is released in terms of the order, nothing shall be released till the next date.
Learned counsel for the respondent submits that for the purpose of payment of salary of 200 employees who work in Jar Gold Retail Private Limited, the accounts need to be in operation. Therefore for the purpose of payment of salary on the requisition submitted by the respondent as to the amount of salary, the account shall be defrozen only to that extent.
List this matter on 21.04.2026.”
8 Sri P. Prasanna Kumar, learned counsel submits that a detailed list of necessities would be placed before the petitioner - Investigating Officer with regard to the salaries, GST or any other statutory payment to be made.
In the event, the respondent would file necessary application before the Investigating Officer, the account shall be defrozen to that effect.
This is in amplification of the order dated 16.04.2026. List the matter on 08.06.2026.”
This Court, by the afore-quoted orders, permitted the use of bank accounts for the purpose of remittance of GST and other statutory payments and salaries.
Heard, in all these petitions, Sri B.N. Jagadeesha, learned State Public Prosecutor-I appearing for the petitioner; Sri Sandesh J. Chouta, learned senior counsel appearing for the respondent and Sri Angad Kamath, learned counsel appearing as Amicus Curiae.
The learned State Public Prosecutor-I would submit that the orders passed by the concerned Court run contrary to law. They are passed as if they have some obfuscation with the order passed by this Court, which stands affirmed by the Apex Court. He would submit that the orders travel from the contours of Sections 497 and 503 of the BNSS. He would seek the orders to be set aside and the
9 concerned Court be directed to consider the applications afresh after hearing the parties to the lis.
The learned senior counsel Sri Sandesh J. Chouta appearing for the respondent would vehemently refute the submissions in contending that the very act of freezing of Bank accounts of the respondent runs contrary to Section 107 of the BNSS. He would submit that Section 107 of the BNSS is a newly introduced provision which was not there in the earlier regime, the Cr.P.C. It mandates that if any freezing of the Bank account is to be made, permission of the learned Magistrate should be taken and then an order of freezing should be passed. It is the case of the respondent that the learned Magistrate was informed after the freezing of the account, as if it would come within the ambit of Section 106 of the BNSS and not under Section 107. Section 106 of the BNSS is the same as Section 102 of the Cr.P.C. Under sub- section (3) of Section 102 of the Cr.P.C., what was mandated was information to be furnished to the learned Magistrate of any freezing of the account or seizure of the property. He would submit
10 that in the light of violation of Section 107 of the BNSS in the case at hand, the order should be confirmed albeit, for different reasons.
The learned senior counsel would submit that several points arise for consideration in the case at hand on interpretation of Sections 106 and 107 of BNSS. It is his submission that there is a distinction between seizure and attachment in criminal jurisprudence. The ambit of Section 106 of BNSS is limited to information to the learned Magistrate. But, freezing of the account is akin to attachment of the property. Therefore, it comes directly under Section 107 of BNSS. He would seek to place reliance upon ten judgments rendered by different High Courts and one of the coordinate Bench of this Court, which interpret freezing of Bank accounts coming under Section 107 of the BNSS and non-compliance with the mandate of Section 107, which would lead to the entire act of freezing being vitiated.
Owing to the conundrum, this Court appointed Sri Angad Kamath as Amicus Curiae to assist the Court. The learned counsel Sri Angad Kamath has taken this Court through the genesis of the
11 provisions and also the judgments rendered by other Courts, as well as coordinate Benches of this Court. It is his submission that Sections 106 and 107 of the BNSS operate in different fields. The powers do not overlap. They are distinct and separate. If the submission of the learned senior counsel is accepted that every debit freezing would come under Section 107 of the BNSS, it would be rendering the provision – Section 106 of the BNSS a surplusage. He would submit that all the High Courts which interpret Section 107 of the BNSS do not even notice Section 106 of the BNSS and interpret Section 107, including the order of the coordinate Bench of this Court. Therefore, the learned counsel submits that Section 107 of BNSS would come into operation only if there is an attachment of the property. An attachment is always a judicial proceeding and debit freezing cannot be a judicial proceeding. What is necessary is to inform the concerned Court, as is obtaining under Section 106 of the BNSS.
The learned State Public Prosecutor-I appearing for the State would also refute the submissions by taking this Court through the genesis of Section 102 of the Cr.P.C., which is now
12 Section 106 of the BNSS, all of which will spring from Criminal Law Amendment Act, 1946. The learned State Public Prosecutor-I would also seek allowing the petitions and quashment of orders passed by the concerned Court. He would submit that if the submission of the learned senior counsel appearing for the respondent is accepted it would be rendering Section 106 of the BNSS redundant. He would also toe the lines of Amicus Curiae in contending that none of the High Courts or the coordinate Bench have considered the interplay between Section 106 and Section 107 of the BNSS.
I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.
The afore-narrated facts lie in a narrow compass and would not require any reiteration.
GENESIS:
A complaint comes to be registered suo-motu by the State against the Company/JAR Gold Retail Private Limited. Two of its
13 Directors approached this Court in Writ Petition No.5968 of 2026. This Court in terms of its order dated 04-03-2026 rejected the petition on the following reasons: “…. …. ….
CONSIDERATION:
The afore-narrated facts are a matter of record. Digital gold or business of sale of gold online is a concept that emerged in the year 2013 when Metals and Minerals Trading Corporation of India, a Government of India Company launched a business for sale of gold/digital gold to customers online. On 17-10-2013 the Securities and Exchange Board of India (‘SEBI’) clarified that the proposed business appears to be only transaction of sale and purchase of gold and does not qualify as a collective investment scheme. Long thereafter, genesis of the Company happens. In 2021 the Company launches a mobile application and a website in the name and style of ‘JAR’ which enables customers to purchase, seek delivery and sell back gold at their discretion. The purchase of gold happens to an amount beginning from ₹10/- and goes on unlimited. The business of these petitioners which began in 2021 has now flourished into a dramatical figure of ₹4,000/- crores. When the business was flourishing for 5 years, an electronic mail is communicated by the Reserve Bank of India. The mail dated 13-10-2025 reads as follows:
“Madam/Dear Sir, Please refer to the trailing mail and attachments on the captioned subject.
In this connection, complainant has raised a number of issues against the Jar app mentioning that it is structurally opaque, legally unguaranteed, behaviorally manipulative and built on a culturally sensitive commodity (Gold).
In connection to the above, MI, DoS, Bengaluru has carried an MI visit at Jar Digital Gold at the available address (as enclosed) and was observed that
14 investments (Rs. 10 to 1 lakh) are accepted for digital gold at the day's rate. However, Instead of physical gold, the gold is said to be kept in an account maintained with Jar, digital form in an account maintained by Jar, which does not comes under RBIs regulation.
In addition to that, Investors also get 30-40% referral bonuses, can stop investing anytime and withdraw funds at the prevailing gold rate. It was also noted that Jar Gold Retail Private Limited and Jarfin Retail Private Limited are also functioning at the same building.
Since these companies are not regulated by RBI but are registered under RoC Bengaluru, the same was forwarded to RoC, Bengaluru for necessary action.
However, during the meeting with Chief Secretary, it was advised that this Information to be sent to Police Department CID. Therefore, the MI visit inputs are forwarded to CID and AIGP, Crime for information and necessary action, if any, as these companies are located in Bengaluru as advised by Chief Secretary as the same would be taken up during the upcoming SLCC meeting.
साभार Regards,
बाजार आसचनाू य नटू / Market Intelligence Unit पयवेण वभाग / Department of Supervision भा.र.वै., बगलू / Reserve Bank of India, Bengaluru फोन / Ph: 080-22180364/383/379”
The electronic mail to all the accused clearly indicated that a complaint is received, it has several issues against JAR app mentioning that it is structurally opaque, legally unguaranteed and behaviorally manipulative and built on a culturally sensitive commodity (gold). The investors get 30 to 40% referral bonuses and can stop investing anytime. Such companies are not regulated by the RBI, but are registered under the Registration of Companies. It is advised that information be sent to CID of the States and all the investigating officers. This mail communication is particularly to the State of Karnataka. The
15 SEBI issues a public notice on 08-11-2025. The public notice reads as follows:
“Caution to public regarding dealing in 'Digital Gold'
SEBI has enabled investments in gold and gold related instruments through various SEBI regulated gold products. These are exchange traded commodity derivative contracts, Gold Exchange Traded Funds (ETFs) offered by Mutual Funds and Electronic Gold Receipts (EGRs) tradeable on stock exchanges. Investments in these SEBI regulated gold products can be made through SEBI registered intermediaries and are governed by the regulatory framework prescribed by SEBI.
It has come to the notice of SEBI that some digital/online platforms are offering investors to invest in ‘Digital Gold/E-Gold Products'. Digital Gold is being marketed as an alternative for investment in physical gold.
In this context, it is informed that such digital gold products are different from SEBI regulated gold products as they are neither notified as securities nor regulated as commodity derivatives. They operate entirely outside the purview of SEBI. Such digital gold products may entail significant risks for investors and may expose investors to counterparty and operational risks.
Investors/participants are made aware that none of the investor protection mechanisms under securities market purview shall be available for investments in such Digital Gold/ E-Gold products.
Mumbai November 08, 2025”
16
The SEBI warns citizens to be careful in investing in digital gold of any Company. After these communications, a memorandum is issued by the Joint Commissioner of Police (Crime), Bangalore City. It reads as follows:
“ಕಾಟಕ ಸ ಾರ ೕ ಇಾೆ
ಸಂೆ: 54/ಅಪಾಧ-4/ ಓ /2025 ೕ ಆಯುಕ ರ ಕ ೇ!,
"ೆಂಗಳ%ರು ನಗರ ': 10-11-2025 (ಾಪನ (ಾಪನ (ಾಪನ (ಾಪನ
)ಷಯ:- JAR Gold Retail Private Limited & Jarfin Retail Private Limited ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಕು!ತು.
ಉೆ8ೕಖ:-ಪ.:ಾನ ಕ ೇ! ಪತ. ಸಂ: ಅಪಾಧ-12/45/2025. ': 21.10.2025. *** *** *** ;ೕಲ=ಂಡ )ಷಯ ೆ= ಸಂಬಂ@ದಂAೆ, ಉೆ8ೕBತ ಪ.:ಾನ ಕ ೇ!ಯ ಪತ.ದ 8 MI Unit ರವರ ಇ-;ೕC ನ 8 "Jar digital Gold" ಸಂDೆEಯು ತನF Gೇ' ೆಯ ಮೂಲಕ HIಟC 1ೋCJ ಹೂH ೆಗಳನುF Lೕಕ!ಸುM ದುN, ಆ ಹೂH ೆಗಳನುF ೇರGಾO PನFದ ರೂಪದ 8 +ೕಡQೆ HIಟC ಾAೆಯ 8 ಉR ೊಂHರುವSದು ಗಮನ ೆ= ಬಂ'Qೆ, ಇQೇ !ೕMTಾO ಹೂH ೆQಾರ!1ೆ 30% !ಂದ 40 % ವೆ1ೆ ೆಫರC Vೋನ +ೕಡಾಗುM Qೆ ಎಂದು ವರ'TಾOQೆ. ಈ Jar Gold Retail Private Limited Yಾಗೂ Jarfin Retail Private Limited ಕಂಪ+ಗಳ3 ಆZ [ ಐ +ಯಂತ.ಣ ೆ= ಒಳಪಡುವS'ಲ8Qೆ ಕಂಪ+ಗಳ ೋಂದ_ +ಯಂತ.ಕ (RoC), "ೆಂಗಳ%!ನ 8 ೋಂQಾ`ತGಾOGೆ ಎಂದು ವರ'TಾOQೆ, ಈ )ಷಯದ 8 Dಾವಜ+ಕ bAಾಸc Yಾಗೂ ಹಣ ಾಸು +ಯಮ ಉಲ8ಂಘೆಗಳ DಾಧAೆ ಇರುವSದ!ಂದ ಅಗತ ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ಸೂPರುAಾ ೆ.
17 ಆದN!ಂದ, ಪ.:ಾನ ಕ ೇ!ಯ ಪತ.ದ 8 ಪ.Dಾ ರುವ ಎಾ8 ಅಂಶಗಳನುF +ಯfಾನುDಾರ ಪ!gೕ , ಅಗತ ೈ1ೊಳ34ವಂAೆ ಸೂP, ಮುಂ'ನ ಕ.ಮ ಾ=O ಕಳ3b ೊಡಾOQೆ.
Digitally signed by AJAY HILORI Date: 10-11-2025 11:10:11 ಜಂh ೕ ಆಯುಕ ರು, (ಅಪಾಧಗಳ3), "ೆಂಗಳ%ರು ನಗರ”
This is replied to by the petitioners. The reply is not necessary to be extracted, as the memorandum of writ petition is verbatim similar to what is replied to.
There are several complaints against this app by the customers or several citizens. I deem it appropriate to notice one such observation. It reads as follows:
“This app has absolutely no credibility, you keep getting prompts that you've saved enough money to buy a gold coin, but every time just before placing order for gold coin, you get a message that gold coin is not deliverable. Also you can't withdraw the amount you've saved, it only allows to withdrawal almost half of the amount. I mean, what even is the point of this application, why wouldn't anyone just use a savings account? Lost case.
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No Jar App - Savings & Investments 6 November 2023
Hi Kanishka, We are sorry for the inconvenience. Kindly share your registered mobile number and issue details at voc@changejar.in or WhatsApp us: wa.me/916366693874, You can also reach us at our customer care number 888-439-0000(Mon to Friday 10 AM-6 PM), We will be happy to assist you.
18 Thank you”
(Emphasis added at each instance)
There are several other observations by several customers about purported fraud in the app. With all the communications, the Police ostensibly cannot keep quiet, as every citizen is involved in this and it has a potential of growing up into a huge problem. Therefore, suo motu complaint is registered by the Koramangala Police station. Since the entire issue trigged from the complaint, it is necessary to notice the entire complaint in its entirety. It reads as follows:
THE COMPLAINT:
“ರವ!1ೆ, jಾkಾ@ ಾ!ಗಳ3, ೋರಮಂಗಲ ೕ jಾkೆ, "ೆಂಗಳ%ರು ನಗರ.
ಇಂದ, g.ೕಕಂjೇ1ೌಡ.[. .ಎ.ಐ, ೋರಮಂಗಲ ೕ jಾkೆ, "ೆಂಗಳ%ರು ನಗರ.
fಾನೇ,
)ಷಯ:- JAR GOLD RETAIL PRIVATE LIMITED ಕಂಪ+ Yಾಗೂ ಸಹ ಕಂಪ+ಗಳ3 ಮತು ಅದರ +Qೇಶಕರುಗಳ3 THE BANNING OF UNREGULATED DEPOSIT SCHEMES ACT, 2019 ಅH ಸಂಬಂ@ದ ೆಗುೇಟZ ಅH ೊಂQಾ` ೊಳ4Qೆ ಅ+ಯಂM.ತ mೕಜೆ !ೕMಯ 8 n"ೈC ಅ8 ೇಷo ಮೂಲಕ PನFದ ಖ!ೕ' ಮತು ಹೂH ೆ
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** *** **
ಾನು g.ೕಕಂjೇ1ೌಡ, ಎಐ, 2023 !ಂದ ೋರಮಂಗಲ ೕ jಾkೆಯ 8 ಕತವ +ವbಸುM ರುAೆ ೕೆ. ನನF ೕ jಾkೆಯ jಾkಾ@ ಾ!ಗR1ೆ fಾನ ೕ ಆಯುಕ ರ ಕ ೇ! (ಾಪನ ಸಂ.54/ಅಪಾಧ-4/ಓ/2025, 'ಾಂಕ: 10.11.2025, fಾನ ಉಪ ೕ ಆಯುಕ ರು, ಆ1ೆFಯ )Vಾಗ, "ೆಂಗಳ%ರು ರವರ (ಾಪನ ಸಂ.ಆZ ಎಂ/591/H(ಆ))/2025, 'ಾಂಕ 20.11.2025, ಪ.:ಾನ ಕpೇ! ಪತ. ಸಂ. ಅಪಾಧ-12/45/2025, 'ಾಂಕ 21.10.2025 eÉÆvÉUÉ !ಸq "ಾಂr ಆs ಇಂHTಾ ರವರ fಾರುಕtೆu )ಚwkಾ ದಳ ಇ-;ೕC ವರ' 'ಾಂಕ 20.07.2025 Lೕಕ! ನನ1ೆ ನನF ;ೕಾ@ ಾ!ಯು ಸದ! JAR GOLD RETAIL PRIVATE LIMITED ಕಂಪ+ ನxೆಸುM ರುವ ಬಂ1ಾರದ ಖ!ೕ' ಮತು ಹೂH ೆಗಳ ಬ1ೆy zಾ.ಥ|ಕ )pಾರkೆ fಾH ವರ' ಸ 8ಸುವಂAೆ +ೕHದ ಸೂಚೆಯ ;ೕೆ1ೆ, ಾನು zಾ.ಥ|ಕ )pಾರkೆಯನುF ೈ1ೊಂHರುAೆ ೕೆ.
ಸದ! !ಸq "ಾಂr ಆs ಇಂHTಾ ರವರ fಾರುಕtೆu )ಚwkಾ ದಳದವರು ಸದ! ಕಂಪ+ಯು ನxೆಸುM ರುವ ವವYಾರದ ಾನೂ+ನ fಾನAೆ ಬ1ೆy ಸಂಶಯ ವಕ ಪH ಸದ! ಸಂDೆEಯವರು ತಮ} Gೇ' ೆಯ ªÀÄÆ®PÀ Dಾವಜ+ಕ!ಂದ HIಟC 1ೋCJ ಹೂH ೆಗಳನುF Lೕಕ!ಸುM ದುN, ಸದ! ವವYಾರವS ಅ+ಯಂM.ತGಾOದುN ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ತಮ} ಇ-;ೕC ವರ' 'ಾಂಕ 20.07.2025 ಅನುF ಆಧ! ೈ1ೊಂಡ zಾ.ಥ|ಕ )pಾರkೆಯ 8 ಈ ೆಳಕಂಡ ಸಂಗMಗಳ3 ಕಂಡುಬಂ'ರುತ Gೆ.
JAR GOLD RETAIL PRIVATE LIMITED ಕಂಪ+ ಇದು ಕಂಪ+ ಾನೂ+ನ 8 ಒಂದು ೊಂQಾ`ತ ಕಂಪ+TಾOದುN, ಸದ! ಕ ೇ!ಯ ೊಂQಾ`ತ )~ಾಸವS ನಂ. 752, 18ೇ ;ೖo, 5ೇ ಾ., ೋರಮಂಗಲ 6ೇ "ಾ8r, "ೆಂಗಳ%!ನ 8 ಇರುತ Qೆ. ಸದ! ಕಂಪ+1ೆ 1)
20 Misbah Ashraf, 2) Sandesh Nahar, 3) Nishchay Babu Arkalgud ರವರುಗಳ3 +Qೇಶಕರುಗ~ಾOರುAಾ ೆ.
ಸದ! ಕಂಪ+ಯು ಮತು ಅದರ +Qೇಶಕರುಗಳ3 HIಟC ಅ8 ೇಷo ಮೂಲಕ Dಾವಜ+ಕ!1ೆ PನFದ 8 ಹೂH ೆ fಾಡುವ ಕು!ತಂAೆ ಅವ ಾಶ fಾH ೊಡುM ದುN, ಆದೆ ಈ ವವYಾರಗಳ ಕು!ತಂAೆ Securities and Exchange Board of India (SEBI) 'ಂದ ಅಥGಾ ಸಂಬಂ@ದ +ಯಂತ.ಣ zಾ.@ ಾರ'ಂದ C£ÀĪÀÄw ¥ÀqÉAiÀÄzÉà ಅಥGಾ ೊಂQಾ` ೊಳ4Qೇ ಅ+ಯಂM.ತ !ೕMಯ 8 ತನF ವವYಾರಗಳನುF fಾಡುM ರುವSದು ;ೕೊFೕಟ ೆ= ಕಂಡುಬರುತ Qೆ.
ಸದ! ಸಂDೆEಯು ಮತು ಅದರ +Qೇಶಕರುಗಳ3 Dಾವಜ+ಕರುಗRಂದ ಹತು ರೂzಾ`ಗRಂದ ಒಂದು ಲw ರೂzಾ`ಗಳವೆ1ೆ ಹೂH ೆಗಳನುF HIಟC 1ೋCJ Yೆಸ!ನ 8 Lೕಕ!ಸುM ದುN, ಅಸ PನFದ ಬದ 1ೆ HIಟC ರೂಪದ 8 PನFವS ಸಂಬಂ@ದ 1ಾ.ಹಕರ ಇ-ಾAೆಗಳ 8 ಇQೆ ಎಂದು Aೋ! ಅವ!1ೆ "ೇ ಾQಾಗ ಅದನುF bಂಪxೆಯಲು ಅವ ಾಶ fಾH ೊಡುAೆ ೕGೆ ಎಂದು Yೇಳ3ವ ಅ+ಯಂM.ತ mೕಜೆಯನುF YೊರH Dಾವಜ+ಕ1ೊRರುತ Qೆ.
ಸದ! ಅ+ಯಂM.ತ mೕಜೆ1ೆ ಆಕಷkೆ1ೊಂಡ Dಾವಜ+ಕರು ತಮ} ಇ- ಾAೆಗಳನುF ಸದ! ಸಂDೆEಯ 8 Aೆೆದು ಆ ಮೂಲಕ ಹಣವನುF ಹೂH ೆ fಾH HIಟC ರೂಪದ 8 PನFದ jೇವ_ಗಳನುF Yೊಂ'ರುAಾ ೆ. ಇದರ •ೊAೆ ಸದ! ಕಂಪ+ಯು ತನF ಹೂH ೆQಾರ!1ೆ ತಮ} •ೊAೆ ಉRದ Dಾವಜ+ಕರನುF Dೆ~ೆದ 8 ಅಂತಹ ಹೂH ೆQಾರ!1ೆ €ೇ. 30 !ಂದ 40 Referral Bonus ೊಡುವSQಾO YೇR ನಂ[ ಹೂH ೆಗಳನುF ಮತು jೇವ_ಗಳನುF Lೕಕ!ಸುM ರುತ Qೆ
zಾ.ಥ|ಕ )pಾರkೆಯ 8 ಸದ! ಸಂDೆE1ೆ ಸಂಬಂ@ದ zಾ.@ ಾರದ ಅನುಮMಗಳನುF ಮತು ವವYಾರದ ಸLರೂಪಗಳನುF ಸ 8ಸುವಂAೆ 'ಾಂಕ 26.11.2025 Yಾಗೂ 04.12.2025 ರಂದು ೋhೕ +ೕಡಾOತು . ಅದ ೆ= ಪ.MTಾO ಸದ! ಸಂDೆEಯು 'ಾಂಕ 02.12.2025 Yಾಗೂ 18.12.2025ರಂದು ಉತ ರವನುF +ೕHದುN, ಅದರ 8 ಸದ!ಯವರು ಸದ! ಕಂಪ+ಯವರು Dಾವಜ+ಕರುಗಳ3/ 1ಾ.ಹಕರುಗR1ೆ n"ೈC ಅ8 ೇಷo ಮತು Gೆƒ Dೈ„ ನ 8 PನFವನುF ೈ1ೆಟುಕುವ, ಸುಲಭGಾO ಖ!ೕ'ಸಲು, fಾಾಟ fಾಡಲು 1ಾ.ಹಕೊಂ'1ೆ ಒಪ†ಂದ fಾH ೊಂಡು ಕಂಪ+ಯ +ಯಮ ಮತು ಷರತು ಗಳ
21 ಅನLಯ 1ಾ.ಹಕರುಗRಂದ PನFದ ;ೕೆ ಯು..ಐ ಮುಾಂತರ ಹಣವನುF ಹೂH ೆ fಾH ೊಳ34M ರುವSQಾO, 1ಾ.ಹಕರು ಖ!ೕ' fಾಡುವ VೌMಕ PನFದ ಅನುಗುಣGಾO ಸfಾನ nತ ದ PನFವನುF ); fಾಡಾದ ಸLತಂತ. Gಾ¯ïÖ ಗಳ 8 ಸಂಗ.bಸಾಗುM ರುವSQಾO, 1ಾ.ಹಕರು VೌMಕ PನFದ fಾ ೕಕತLದ HIಟC Qಾಖೆ Yೊಂ'ರುAಾ ೆ. 1ಾ.ಹಕರು ತಮ} ಒxೆತನದ PನFವನುF )ದುಾ}ನGಾO ನಗದು ರೂಪದ 8 fಾಾಟ fಾಡುವ/ VೌMಕ PನFದ ಾಣಗ~ಾO/ PನFದ ಭರಣಗಳಾFO ಪ!ವMಸುವ ಆ‡= Yೊಂ'ರುವSQಾO MRರುAಾ ೆ. ಆದೆ ಸದ! ವವYಾರವS ಸಂಬಂ@ದ +ಯಂM.ಕ zಾ.@ೕ ಾರGಾದ SEBI ಅಥGಾ ಇತೆ zಾ.@ ಾರದH ೊಂದ_ fಾH ೊಂHದNರ ಬ1ೆy TಾವSQೇ )ಷಯವನುF ಅಥGಾ QಾಖಾMಗಳನುF YಾಜರುಪHರುವS'ಲ8 ಮತು ಅಂತಹ ೊಂದ_ ಮತು ಅನುಮM ಅಗತ)ಲ8Gೆಂದು ಉೆ8ೕBದN!ಂದ ಸದ! ಸಂDೆE ಮತು +Qೇಶಕರುಗಳ3 ತಮ} ;ೕಾ=_ದ ವವYಾರವನುF +ಯಂತ.ಕ zಾ.@ ಾರ'ಂದ ಅನುಮMಯನುF ಪxೆಯಾರQೇ ಮತು ೊಂQಾ` ೊಳ4ಾರQೇ ಅ+ಯಂM.ತGಾO ಸದ! mೕಜೆಯನುF ರೂ Dಾವಜ+ಕ!ಂದ ಹಣವನುF ಹೂH ೆ fಾಡುವSದರ ಮೂಲಕ jೇವ_ fಾH ೊಳ34M ರುವSದು ಬˆ‰ ಅ@+ಯಮದ ಕಲಂ 3 ಅನುF ಉಲ8ಂŠ ಕಲಂ 21(1) ಮತು (2) ರHಯ 8 g‹ಾಹ ಅಪಾಧ ಎಸOದುN ;ೕೊFೕಟ ೆ= ಕಂಡುಬರುತ Qೆ.
ಸದ! ಸಂDೆE ಮತು +Qೇಶಕರುಗಳ3 +ೕHದ fಾbMಯಂAೆ ಸುfಾರು 3.3 ೋh ಜನರಷುu ತಮ} n"ೈC ಅ8 ೇಷo ಮೂಲಕ ಇ-ಾAೆಗಳನುF Aೆೆದು ವವYಾರ fಾಡುM ದುN, ಈ bೆFೆಯ 8 ಸದ! ಸಂDೆE ಮತು +Qೇಶಕರುಗಳ3 ಸುfಾರು 100 ೋhOಂತ |Oಲು ಹಣವನುF Dಾವಜ+ಕ!ಂದ Lೕಕ!ರುವ ಬ1ೆy fಾbM ಇದುN, ಈ ಕು!ತಂAೆ ತಮ} ೆಕ= ಪತ.ಗಳನುF ಮತು fಾbMಗಳನುF +ೕಡQೇ bಂQೇಟು YಾcರುAಾ ೆ. ಅೇಕ "ಾ! ಾನು Dಾವಜ+ಕ!ಂದ Lೕಕ!ದ ಹಣದ ಒಟುu nಬಲಗು fಾbM +ೕH ಎಂದು ೇRQಾNOಯೂ ಕೂಡ YಾಜರುಪHರುವS'ಲ8. ಈ bೆFೆಯ 8 ಸದ! ಸಂDೆEಯು +ೕHದ fಾbM ;ೕೆ ಸುfಾರು 100 ೋh «ÄOಲು ಹಣವನುF Dಾವಜ+ಕ!ಂದ ಈ ಅ+ಯಂM.ತ mೕಜೆ ಅHಯ 8 ಆೋತರು Lೕಕ! ಅಪಾಧ ಎಸOರುAಾ ೆ.
SEBI ಸಂDೆEಯವರು ತಮ} ಪತ. PR No. 70/2025, dated 08.11.2025 ರ ಮೂಲಕ Dಾವಜ+ಕ!1ೆ ಈ !ೕMಯ HIಟC 1ೋCJ/ಇ-1ೋCJ zಾ.ಡPïÖ÷ì
22 ವವYಾರವS ಅ+ಯಂM.ತGಾOQೆ ಎಂದು ಸ†ಷuಪHರುತ Qೆ ಮತು ಈ ಕು!ತಂAೆ ಬˆ‰ ಅ@+ಯಮದH, ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ಸೂPರುತ Qೆ.
ಸದ! ಸಂDೆE ಮತು +Qೇಶಕರುಗಳ3 AಾವS fಾಡುM ರುವ ವವYಾರವS ಅ+ಯಂM.ತGಾOGೆ ಎಂದು MRದೂ ಸಹ Dಾವಜ+ಕ!1ೆ +ಜ ಸಂಗMಯನುF MRಸQೇ ತಮ} HIಟC zಾ8„•ಾŽ ಮೂಲಕ E-SÁvÉಯನುF Aೆೆದು ಹಣ ಹೂH ೆ fಾಡುವSದರ ಮೂಲಕ PನF ಖ!ೕ' jೇವ_ ಇಟುu ೊಂಡು ತಮ1ೆ "ೇ ಾQಾಗ fಾ!ದ ಹಣವನುF ಅವರ ಾAೆ`ಂದ ಸಂDೆE ಮೂಲಕ Dೆ~ೆದು ೊಳ4ಬಹುದು ಎಂದು ನಂ[ ಸುfಾರು 3.3 ೋh ಜನjAದ ಸುfಾರು 100 ೋhOಂತ Yೆಚು• ಹಣವನುF Lೕಕ! ಹೂH ೆ fಾH ೊಂಡು ನಂತರ ಮರRಸQೇ nೕಸ fಾಡುವ ಪ.ಯತFದ 8ರುವSದು ಕಂಡುಬರುM Qೆ.
ಸದ! ಬˆ‰ ಅ@+ಯಮದ ಕಲಂ 21(1) ಮತು (2) ಅಪಾಧವS ಸದ! ಅ@+ಯಮದ ಕಲಂ 28 ರH ಸಂ(ೆ ಮತು •ಾ|ೕನು ರbತ ಅಪಾಧGಾOದುN, ೕಸ!1ೆ ಪ.ಕರಣ Qಾಖ ೊಂಡು ತ+ೆ fಾಡಲು ಅ@ ಾರ)Qೆ, •ೊAೆ1ೆ fಾನ ಕಾಟಕ ಉಚ• ಾTಾಲಯವS c.|ನC hಷo ಸಂ. 100048/2024 •ೊAೆ1ೆ c.|ನC hಷo ಸಂ. 102510/2023 ರ 8 'ಾಂಕ 17.01.2025ರಂದು +ೕHದ MೕನನುDಾರ ಇಂತಹ ಪ.ಕರಣಗಳನುF ೕ jಾkಾ@ ಾ!ಯು Qಾಖ ೊಂಡು ತ+ೆ fಾಡಲು ಅ@ ಾರ)Qೆ ಎಂದು MೕಪS +ೕHದNರ bೆFೆಯ 8 ಸ ಾರದ ಪರGಾO ಾನು ಈ 'ನ JAR GOLD RETAIL PRIVATE LIMITED ಕಂಪ+ Yಾಗೂ ಸಹ ಕಂಪ+ಗಳ3 ಮತು ಅದರ +Qೇಶಕರುಗ~ಾದ1) Misbah Ashraf, 2) Sandesh Nahar, 3) Nishchay Babu Arkalgud ರವರುಗಳ )ರುದ- ಸೂಕ ಾನೂನು ಕ.ಮ ೈ1ೊಳ4"ೇ ೆಂದು ೋ! ದೂರು ಸ 8ಸುM ರುAೆ ೕೆ. ವಂದೆಗ~ೆ%ಂ'1ೆ, ತಮ} )€ಾL ಸb/- (g.ೕಕಂjೇ1ೌಡ.[.) .ಎ.ಐ, ೋರಮಂಗಲ ೕ jಾkೆ, "ೆಂಗಳ%ರು ನಗರ.” ಲಗತು ಗಳ3:
23 1) ೋರಮಂಗಲ ೕ jಾkೆ H..ಆZ ನಂ. 633/2025. 2) Jar Gold Retail Private Limited & Jarfin Retail Private Limited : ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಸಂಬಂಧ fಾನ ಉಪ ೕ ಆಯುಕ ರು, ಆ1ೆFಯ )Vಾಗ, "ೆಂಗಳ%ರು ರವರ (ಾಪಾ ನಂ.ಆZ.ಎಂ/591/H(ಆ))/2025, ':20/11/2025. 3) Jar Gold Retail Private Limited & Jarfin Retail Private Limited ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಸಂಬಂಧ fಾನ ೕ ಆಯುಕ ರವರ ಕ ೇ! (ಾಪನ ನಂ.54/ಅಪಾಧ-4/ ಓ/2025, ':10/11/2025. 4) Jar Gold Retail Private Limited & Jarfin Retail Private Limited ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಸಂಬಂಧ fಾನ ಮYಾ +Qೇಶಕರು & ಆರwಕ ಮYಾ +!ೕwಕರು, PÀ£ÁðlPÀ gÁdå gÀªÀgÀ PÀbÉÃj ¥ÀvÀæ £ÀA.C¥ÀgÁzsÀ-12/45/2025, ':21/10/2025. 5) RBI MI Unit ರವರ ಈ;ೕC 'ಾಂಕ:13/10/2025ರ ಪ.M & ಅದೊಂ'1ೆ ಇರುವ QಾಖಾMಗಳ ಪ.Mಗಳ3. 6) ಆZ.[.ಐ ಎಂ.ಐ ಯೂ+„ ರವರ ಈ;ೕC ದೂ!ನ ;ೕೆ ಕಲಂ 173(3)(1) [.ಎo.ಎ.ಎ ಅH zಾ.ಥ|ಕ )pಾರkೆ ೈ1ೊಳ4ಲು fಾನ ಸYಾಯಕ ೕ ಆಯುಕ ರು, ಮHGಾಳ ಉಪ )Vಾಗ ರವ!ಂದ ಪxೆ'ರುವ ಪxೆ'ರುವ ಅನುಮM ಪತ. ':25/11/2025. 7) Jar Gold Retail Private Limited PÀA¥À¤ ¤zÉÃð±ÀPÀgÀÄUÀ½UÉ zÁR¯ÁwUÀ¼À£ÀÄß YಾಜರುಪHಸುವಂAೆ ೊhuರುವ ೋh ':26/11/2025. 8) Jar Gold Retail Private Limited ಕಂಪ+ ರವರ !¥ÉèöÊ ಪತ. ':01/12/2025. 9) Jar Gold Retail Private Limited PÀA¥À¤ ¤zÉÃð±ÀPÀgÀÄUÀ½UÉ zÁR¯ÁwUÀ¼À£ÀÄß YಾಜರುಪHಸುವಂAೆ ೊhuರುವ ೋh ':04/12/2025. 10) Jar Gold Retail Private Limited ಕಂಪ+ ರವರ !¥ÉèöÊ ಪತ. ':12/12/2025 & ಸದ!ಯವರು YಾಜರುಪHರುವ QಾಖಾMಗಳ3. 24 11) SEBI, Southeren Regional Office, Chennai gÀªÀjUÉ Jar Gold Retail Private & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À ¸ÀA§AzsÀ ªÀiÁ»w ¤ÃqÀĪÀAvÉ ಈ;ೕC ಮುಾಂತರ ೊhuರುವ ೋh ':05/12/2025. 12) ಆZ.[.ಐ hಷo ಸಂಬಂಧ ಆzಾ'ತ ಕಂಪ+ಗಳ )ರುದN ೈ1ೊಳ4ಬಹುQಾದ ಕ.ಮದ ಬ1ೆy ಾನೂನು ಸಲYೆ1ಾರ!ಂದ ಅ˜zಾ.ಯ ವರ' ೊH ೊಡುವಂAೆ fಾನ ಉಪ ೕ ಆಯುಕ ರು, ಆ1ೆFಯ )Vಾಗ, "ೆಂಗಳ%ರು ರವ!1ೆ ೋ!ರುವ ಮನ) ':05/12/2025. 13) Chief Manager, Investment Management department, SEBI, Mumbai gÀªÀjUÉ Jar Gold Retail Private Limited & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À ಸಂಬಂಧ fಾbM +ೕಡುವಂAೆ ೊhuರುವ ೋh ':08/12/2025. 14) ಆZ.[.ಐ, ಎಂ.ಐ ಯೂ+„ ರವರ ;ೕC ದೂ!ನ ;ೕೆ ೈ1ೊಂHರುವ zಾ.ಥ|ಕ )pಾರkೆ ಸಂಬಂಧ ವರ'ಯನುF fಾನ ಸYಾಯಕ ೕ ಆಯುಕ ರು, ಮHGಾಳ ಉಪ )Vಾಗ ರವ!1ೆ +Gೇ' ೊಂHರುವ ಪತ. ':05/12/2025. 15) ಆZ[ಐ ರವ!1ೆ ಈ;ೕC ಮುಾಂತರ ದೂರು +ೕHದN Lakshminarasimhan Santhanam ರವ!1ೆ ಪ.ಕರಣ Qಾಖಲು fಾಡುವ ಸಂಬಂಧ jಾkೆ1ೆ YಾಜಾO Bತ ದೂರನುF +ೕಡುವಂAೆ ೊhuರುವ ೋh ':19/12/2025. 16) SEBI gÀªÀgÀ ¥ÀwæPÁ ¥ÀæPÀluÉ PR No.70/2025, ':08/11/2025. 17) fಾನ ಉಪ ೕ ಆಯುಕ ರು, ಆ1ೆFಯ )Vಾಗ, "ೆಂಗಳ%ರು ರವರು fಾನ ಾನೂನು ಸಲYೆ1ಾರರು, ೕ ಆಯುಕ ರವರ ಕ ೇ!, "ೆಂಗಳ%ರು ನಗರ ರವ!1ೆ Jar Gold Retail Private Limited & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À «gÀÄzÀÞ PÁ£ÀÆ£ÀÄ ಕ.ಮ ಜರುOಸಲು ಅ˜zಾ.ಯ ವರ' +ೕಡುವಂAೆ ೋ!ರುವ ಮನ) ':08/12/2025. 18) fಾನ ಉಪ ೕ ಆಯುಕ ರು, ಆ1ೆFಯ )Vಾಗ, "ೆಂಗಳ%ರು ರವರು ಾನೂನು ಸಲYೆ1ಾರರು, ೕ ಆಯುಕ ರವರ ಕ ೇ!, "ೆಂಗಳ%ರು ನಗರ ರವರ
25 ಅ˜zಾ.ಯ ವರ'ಯನುF ಮುಂ'ನ ಕ.ಮದ ಸಂಬಂಧ ೋರಮಂಗಲ ೕ jಾkೆ1ೆ ಕಳ3b PÉÆnÖgÀĪÀ (ಾಪನ ನಂ.¹.Dgï.JA./664/r¹¦(D«)/2025, ':20/12/2025. 19) ಾನೂನು ಸಲYೆ1ಾರರು, ೕ ಆಯುಕ ರವರ ಕ ೇ!, "ೆಂಗಳ%ರು ನಗರ ರವರು fಾ£Àå ಉಪ ೕ ಆಯುಕ ರು, ಆUÉßÃಯ )Vಾಗ, "ೆಂಗಳ%ರು ರವ!1ೆ Jar Gold Retail Private Limited & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À «gÀÄzÀÞ PÁ£ÀÆ£ÀÄ PÀæªÀÄ ೈ1ೊಳ34ವ ಸಂಬಂಧ ೊhuರುವ ಅ˜zಾ.ಯ ':17/12/2025. 20) Jar Gold Retail Private Limited ಕಂಪ+ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ªÀAvÉ Manager, SEBI, Southern Regional Office gÀªÀgÀÄ »jAiÀÄ C¢üPÁjUÀ½UÉ PÀ¼ÀÄ»¹gÀĪÀ ¥ÀvÀæ £ÀA.SEBI/SRO/P/OW/2025/27057, ':17/10/2025 & F ಸಂಬಂಧ ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ಸೂPರುವ 1)fಾನ ಉಪ ೕ ಆಯುಕ ರು, ಆUÉßÃAiÀÄ )Vಾಗ, "ೆಂಗಳ%ರು ರವರ (ಾಪನ ನಂ.¹.Dgï.JA./663/r¹¦(D«)/2025, ':19/12/2025, 2)fಾನ ೕ ಆಯುಕ ರವರ ಕ ೇ! (ಾಪನ ನಂ.54/ಅಪಾಧ-4/.¹N¦/2025, ':06/12/2025, 3) ªÀiÁ£Àå ªÀĺÁ ¤zÉÃð±ÀPÀgÀÄ & DgÀPÀëPÀ ªÀĺÁ +!ೕwಕರು, ಕಾಟಕ ಾಜ ರವರ ಕ ೇ! ಪತ. ನಂ. ಅಪಾಧ-12/45/2025, ':11/11/2025.”
ಈ 'ನ 'ಾಂಕ16/01/2026 ರಂದು "ೆR1ೆy 10:30 ಗಂtೆ1ೆ Tಾ' PSI-2 g.ೕಕಂjೇ1ೌಡ [., ೊರಮಂಗಲ ೕ jಾkೆ ರವರು +ೕHದ ದೂರನುF ಪxೆದು ದೂ!ನ ;ೕೆ1ೆ jಾkಾ n.ಸಂ. 25/2016 -ಕಲಂ 21( 1 ) ಮತು 21 (2) BUDS Act 2019 !ೕತ ಪ.ಕರಣ Qಾಖ ೊಂHರುAೆ .”
The complaint leads to seizure of several materials. All that led the petitioners to this Court. The contention is that it does not amount to a deposit under the Act. Section 21 and 22 of the Act reads as follows:
“21. Punishment for contravention of section 3. — (1) Any deposit taker who solicits deposits in contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which shall not be less than two lakh rupees but which may extend to ten lakh rupees.
26
(2) Any deposit taker who accepts deposits in contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to seven years and with fine which shall not be less than three lakh rupees but which may extend to ten lakh rupees. …
…
…
Punishment for contravention of section 4. — Any deposit taker who contravenes the provisions of section 4 shall be punishable with imprisonment for a term which may extend to seven years, or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of the fraudulent default referred to in said section, whichever is higher, or with both.”
Section 2(4) defines what is a deposit. It reads as follows:
“2. Definitions.—
……. (4) “deposit” means an amount of money received by way of an advance or loan or in any other form, by any deposit taker with a promise to return whether after a specified period or otherwise, either in cash or in kind or in the form of a specified service, with or without any benefit in the form of interest, bonus, profit or in any other form, but does not include— (a) amounts received as loan from a scheduled bank or a co-operative bank or any other banking company as defined in Section 5 of the Banking Regulation Act, 1949 (10 of 1949); (b) amounts received as loan or financial assistance from the Public Financial Institutions notified by the Central Government in consultation with the Reserve Bank of India or any non-banking financial company as defined in clause (f) of Section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934) and is registered with the Reserve Bank of India or any Regional Financial Institutions or insurance companies;
27 (c) amounts received from the appropriate Government, or any amount received from any other source whose repayment is guaranteed by the appropriate Government, or any amount received from a statutory authority constituted under an Act of Parliament or a State Legislature; (d) amounts received from foreign Governments, foreign or international banks, multilateral financial institutions, foreign Government owned development financial institutions, foreign export credit collaborators, foreign bodies corporate, foreign citizens, foreign authorities or person resident outside India subject to the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules and regulations made thereunder; (e) amounts received by way of contributions towards the capital by partners of any partnership firm or a limited liability partnership; (f) amounts received by an individual by way of loan from his relatives or amounts received by any firm by way of loan from the relatives of any of its partners; (g) amounts received as credit by a buyer from a seller on the sale of any property (whether movable or immovable); (h) amounts received by an asset re-construction company which is registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (i) any deposit made under Section 34 or an amount accepted by a political party under Section 29-B of the Representation of the People Act, 1951 (43 of 1951); (j) any periodic payment made by the members of the self- help groups operating within such ceilings as may be prescribed by the State Government or Union territory Government; (k) any other amount collected for such purpose and within such ceilings as may be prescribed by the State Government;
28 (l) an amount received in the course of, or for the purpose of, business and bearing a genuine connection to such business including— (i) payment, advance or part payment for the supply or hire of goods or provision of services and is repayable in the event the goods or services are not in fact sold, hired or otherwise provided; (ii) advance received in connection with consideration of an immovable property under an agreement or arrangement subject to the condition that such advance is adjusted against such immovable property as specified in terms of the agreement or arrangement; (iii) security or dealership deposited for the performance of the contract for supply of goods or provision of services; or (iv) an advance under the long-term projects for supply of capital goods except those specified in item (ii): Provided that if the amounts received under items (i) to (iv) become refundable, such amounts shall be deemed to be deposits on the expiry of fifteen days from the date on which they become due for refund: Provided further that where the said amounts become refundable, due to the deposit taker not obtaining necessary permission or approval under the law for the time being in force, wherever required, to deal in the goods or properties or services for which money is taken, such amounts shall be deemed to be deposits. Explanation.—For the purposes of this clause,— (i) in respect of a company, the expression “deposit” shall have the same meaning as assigned to it under the Companies Act, 2013 (18 of 2013); (ii) in respect of a non-banking financial company registered under the Reserve Bank of India Act, 1934 (2 of 1934), the expression “deposit” shall have the same meaning as assigned to it in clause (bb) of Section 45-I of the said Act;
29 (iii) the expressions “partner” and “firm” shall have the meanings respectively assigned to them under the Indian Partnership Act, 1932 (9 of 1932); (iv) the expression “partner” in respect of a limited liability partnership shall have the same meaning as assigned to it in clause (q) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); (v) the expression “relative” shall have the same meaning as assigned to it in the Companies Act, 2013 (18 of 2013);”
(Emphasis supplied)
The provisions of the Act define “deposit” in expansive terms and the argument that the statute must be construed narrowly, so as to exclude digital or gold backed arrangements stands repelled.
The evolution of digital gold, as a commercial concept, is not in dispute. However, the materials on record disclose that serious allegations are surfaced, including assertions that physical gold could not be traced when demanded, notwithstanding the assurances to the contrary. Searches have allegedly yielded gold bearing the Company’s branding at the premises of the office bearers. The learned senior counsel has strenuously contended that there is an agreement entered into between the Brinks India Private Limited and the petitioners for storage of gold and would contend that all the gold is stored in the vault of Brinks India Private Limited. With all this staring, this Court cannot lend its protective hands to the petitioners and obliterate the crime in its incipient stage. Investigation in such cases is imperative, as the investors have already made hue and cry through communications between them that there is no gold and no money.
In the light of circumstances giving rise to sharply contested questions of fact, which cannot be adjudicated in the proceedings of this nature, at this juncture, as it is well settled principle of law that power
30 to quash criminal proceedings in exercise of juri iction under Section 528 of the BNSS is an exception and not the rule. The Apex Court has repeatedly cautioned that Courts must refrain from embarking upon appreciation of disputed facts or evaluating the probative worth of material, at the stage of investigation. It becomes apposite to refer to the judgment of the Apex Court in the case of KAPTAN SINGH v. STATE OF UTTAR PRADESH ((2021) 9 SCC 35), wherein the Apex Court has held as follows: “…. …. ….
At the outset, it is required to be noted that in the present case the High Court in exercise of powers under Section 482 Cr.P.C.,, has quashed the criminal proceedings for the offences under Sections 147, 148, 149, 406, 329 and 386 IPC. It is required to be noted that when the High Court in exercise of powers under Section 482 Cr.P.C.,, quashed the criminal proceedings, by the time the investigating officer after recording the statement of the witnesses, statement of the complainant and collecting the evidence from the incident place and after taking statement of the independent witnesses and even statement of the accused persons, has filed the charge-sheet before the learned Magistrate for the offences under Sections 147, 148, 149, 406, 329 and 386 IPC and even the learned Magistrate also took the cognizance. From the impugned judgment and order [Radhey Shyam Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the High Court, it does not appear that the High Court took into consideration the material collected during the investigation/inquiry and even the statements recorded. If the petition under Section 482 Cr.P.C.,, was at the stage of FIR in that case the allegations in the FIR/complaint only are required to be considered and whether a cognizable offence is disclosed or not is required to be considered. However, thereafter when the statements are recorded, evidence is collected and the charge- sheet is filed after
conclusion of the investigation/inquiry the matter stands on different footing and the Court is required to consider the material/evidence collected during the investigation. Even at this stage also, as observed and held by this Court in a catena of decisions, the High Court is not required to go into the merits of the
31 allegations and/or enter into the merits of the case as if the High Court is exercising the appellate juri iction and/or conducting the trial. As held by this Court in Dineshbhai Chandubhai Patel [Dineshbhai Chandubhai Patel v. State of Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC (Cri) 683] in order to examine as to whether factual contents of FIR disclose any cognizable offence or not, the High Court cannot act like the investigating agency nor can exercise the powers like an appellate court. It is further observed and held that that question is required to be examined keeping in view, the contents of FIR and prima facie material, if any, requiring no proof. At such stage, the High Court cannot appreciate evidence nor can it draw its own inferences from contents of FIR and material relied on. It is further observed it is more so, when the material relied on is disputed. It is further observed that in such a situation, it becomes the job of the investigating authority at such stage to probe and then of the court to examine questions once the charge-sheet is filed along with such material as to how far and to what extent reliance can be placed on such material.
In Dhruvaram Murlidhar Sonar [Dhruvaram Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191 : (2020) 3 SCC (Cri) 672] after considering the decisions of this Court in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , it is held by this Court that exercise of powers under Section 482 Cr.P.C.,, to quash the proceedings is an exception and not a rule. It is further observed that inherent juri iction under Section 482 Cr.P.C.,, though wide is to be exercised sparingly, carefully and with caution, only when such exercise is justified by tests specifically laid down in the section itself. It is further observed that appreciation of evidence is not permissible at the stage of quashing of proceedings in exercise of powers under Section 482 Cr.P.C., Similar view has been expressed by this Court in Arvind Khanna [CBI v. Arvind Khanna, (2019) 10 SCC 686 : (2020) 1 SCC (Cri) 94] , Managipet [State of Telangana v. Managipet, (2019) 19 SCC 87 : (2020) 3 SCC (Cri) 702] and in XYZ [XYZ v. State of Gujarat, (2019) 10 SCC 337 : (2020) 1 SCC (Cri) 173] , referred to hereinabove.
32
Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, we are of the opinion that the High Court has exceeded its juri iction in quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C.,
The High Court has failed to appreciate and consider the fact that there are very serious triable issues/allegations which are required to be gone into and considered at the time of trial. The High Court has lost sight of crucial aspects which have emerged during the course of the investigation. The High Court has failed to appreciate and consider the fact that the document i.e. a joint notarised affidavit of Mamta Gupta Accused 2 and Munni Devi under which according to Accused 2 Ms Mamta Gupta, Rs 25 lakhs was paid and the possession was transferred to her itself is seriously disputed. It is required to be noted that in the registered agreement to sell dated 27-10-2010, the sale consideration is stated to be Rs 25 lakhs and with no reference to payment of Rs 25 lakhs to Ms Munni Devi and no reference to handing over the possession. However, in the joint notarised affidavit of the same date i.e. 27-10-2010 sale consideration is stated to be Rs 35 lakhs out of which Rs 25 lakhs is alleged to have been paid and there is a reference to transfer of possession to Accused 2. Whether Rs 25 lakhs has been paid or not the accused have to establish during the trial, because the accused are relying upon the said document and payment of Rs 25 lakhs as mentioned in the joint notarised affidavit dated 27-10-2010. It is also required to be considered that the first agreement to sell in which Rs 25 lakhs is stated to be sale consideration and there is reference to the payment of Rs 10 lakhs by cheques. It is a registered document. The aforesaid are all triable issues/allegations which are required to be considered at the time of trial. The High Court has failed to notice and/or consider the material collected during the investigation.
Now so far as the finding recorded by the High Court that no case is made out for the offence under Section 406 IPC is concerned, it is to be noted that the High Court itself has noted that the joint notarised affidavit dated 27-10-2010 is seriously
33 disputed, however as per the High Court the same is required to be considered in the civil proceedings. There the High Court has committed an error. Even the High Court has failed to notice that another FIR has been lodged against the accused for the offences under Sections 467, 468, 471 IPC with respect to the said alleged joint notarised affidavit. Even according to the accused the possession was handed over to them. However, when the payment of Rs 25 lakhs as mentioned in the joint notarised affidavit is seriously disputed and even one of the cheques out of 5 cheques each of Rs 2 lakhs was dishonoured and according to the accused they were handed over the possession (which is seriously disputed) it can be said to be entrustment of property. Therefore, at this stage to opine that no case is made out for the offence under Section 406 IPC is premature and the aforesaid aspect is to be considered during trial. It is also required to be noted that the first suit was filed by Munni Devi and thereafter subsequent suit came to be filed by the accused and that too for permanent injunction only. Nothing is on record that any suit for specific performance has been filed. Be that as it may, all the aforesaid aspects are required to be considered at the time of trial only.
Therefore, the High Court has grossly erred in quashing the criminal proceedings by entering into the merits of the allegations as if the High Court was exercising the appellate juri iction and/or conducting the trial. The High Court has exceeded its juri iction in quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C.,
Even the High Court has erred in observing that original complaint has no locus. The aforesaid observation is made on the premise that the complainant has not placed on record the power of attorney along with the counter filed before the High Court. However, when it is specifically stated in the FIR that Munni Devi has executed the power of attorney and thereafter the investigating officer has conducted the investigation and has recorded the statement of the complainant, accused and the independent witnesses, thereafter whether the complainant is having the power of attorney or not is to be considered during trial.
34
In view of the above and for the reasons stated above, the impugned judgment and order [Radhey Shyam Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the High Court quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C., is unsustainable and the same deserves to be quashed and set aside and is accordingly quashed and set aside. Now, the trial is to be conducted and proceeded further in accordance with law and on its own merits. It is made clear that the observations made by this Court in the present proceedings are to be treated to be confined to the proceedings under Section 482 Cr.P.C., only and the trial court to decide the case in accordance with law and on its own merits and on the basis of the evidence to be laid and without being influenced by any of the observations made by us hereinabove. The present appeal is accordingly allowed.”
(Emphasis supplied)
The Apex Court in KAPTAN SINGH has clearly held that interference at the juncture of the investigation, except in exceptional circumstances, would amount to stifling of legitimate enquiry and would run afoul of binding precedents.
The submission that the Act stands uninvoked in the present circumstances is entirely bereft of merit and cannot be countenanced. The absence of express regulatory supervision by bodies such as SEBI or the RBI over the purchase or storage of gold, be it in tangible form or in its digital avatar, does not confer upon such transactions a sanctuary beyond the reach of the statute. The argument that deposit is not in currency or hard cash but in gold, physical or digital, is equally unavailing. “Law is concerned not with the cosmetic garb in which a transaction is clothed, but with its intrinsic character and its economic substance. In the rapidly mutating landscape of cyber enabled financial frauds, deception no longer adheres to the crude paradigm of cash deposits.” It now assumes a subtler and more sophisticated forms –
35 commodities, digital assets, gold linked assurances and other alluring constructs designed to circumvent regulatory vigilance.”
The said order was tossed before the Apex Court and the Special Leave Petition against it comes to be rejected.
After the rejection, the respondent/Company files three separate applications before the Court of Session under Section 15(3) of the Banning of Unregulated Deposit Schemes Act, 2019 (‘BUDS Act’ for short) read with Sections 497 and 503 of the BNSS seeking release of the property seized pursuant to the investigation and de-freezing of bank accounts. The Court of Session, by the impugned orders dated 04-04-2026 allowed the applications; reasons in one of the orders passed are as follows: “REASONS
Point No. 1: Koramangala Police have registered this case i.e. Crime No.25/2026 against the Accused Nos. 1 to 4 for the offenses punishable under Sections 21(1) and 21 of Banning of Unregulated Deposit Schemes Act, 2019, based on a complaint lodged by Sri Ranjith on Srikantegowda B on 16.1.2026. 8. The Investigating Officer during the course of investigation has seized the following gold and silver bars:
36
The Applicant has sought for releasing of these articles as claimed in the application referred above for the reasons stated in the application.
The material placed on record indicates that Accused No. 4 is a registered company engaged in the business of sale of physical gold through an online platform. The Applicant has produced documents to show that upon receipt of consideration from customers, tax invoices are generated and ownership in the gold is transferred to such customers. Prima facie, such transactions bear the characteristics of completed contracts of sale governed by the sale of Goods Act, 1930, rather than deposit-taking activities.
It is significant to note that as on date no complaints have been placed on record from any customer alleging non- delivery of gold or non-payment of monies. There is also no material to demonstrate any default on the part of the Applicant in fulfilling its contractual obligations. In the absence of identifiable aggrieved depositors, the essential ingredient of a "deposit scheme" under the Banning of Unregulated Deposit Schemes Act, 2019 is not prima facie established.
The Investigating Agency itself has verified that substantial quantities of gold approximately 1,521 kilograms are stored with M/s The Brinks India Private Limited. This circumstance lends support to the Applicant's contention that the business involves actual backing of customer purchases with physical gold, thereby negating, at this stage, the allegation of a fictitious or sham deposit scheme.
The Applicant has asserted and prima facie demonstrated that upon completion of sale transactions, ownership in the gold passes to the respective customers. If
37 such position is accepted, the seized gold cannot be treated as the property of the Applicant or as proceeds of crime attributable to it. The seizure therefore affects the rights of third-party customers who are not accused in the present case.
For property to be retained or confiscated, there must exist a reasonable nexus between the property and the alleged offence. In the present case, no material has been placed to show that the seized gold constitutes proceeds of any offence or that it is directly linked to any illegal deposit activity. Mere allegations, without supporting evidence, are insufficient to justify continued seizure.
It is to be noted that a suo-motu case is registered by the police and it is not a case that any victims have filed such complaint. It is the contention of the police that one Lakshminarasimhan Santhanam had sent a mail dated 20.07.2025 to Department of Supervision and Market intelligence Unit of RBI expressing some concern about the manner which the business is run by A4-Company. Based on the said e-mail, the said Market Intelligence Unit of RBI has forwarded an e-mail request dated 13.10.2025 noting the concern expressed by said Lakshminarasimhan Santhanam and further that these companies are not regulated by RBI, but are registered under
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.