NISHCHAY BABU ARKALGUD vs STATE OF KARNATAKA

1
R
Reserved on : 21.02.2026
Pronounced on : 04.03.2026

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 04 DAY OF MARCH, 2026

BEFORE

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

WRIT PETITION No.5968 OF 2026 (GM - RES)

BETWEEN:

1 . NISHCHAY BABU ARKALGUD
S/O GOWRISHANKAR A.G.,
AGED ABOUT 42 YEARS,
RESIDING AT NO.661, GROUND FLOOR,
TH TH
6 C MAIN, 11 CROSS,
RD
J.P. NAGAR, 3 PHASE,
BENGALURU – 560 078.

2 . JAR GOLD RETAIL PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 2013
BEARING CIN U47733KA2023PTC181719,
HAVING ITS REGISTERED OFFICE AT:
TH TH
752, 18 MAIN, 5 CROSS,
TH
6 BLOCK, KORAMANGALA, BENGALURU,
KARNATAKA – 560 095.

REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
MR. AVINASH VASANT DESHPANDE
... PETITIONERS
(BY SRI K.G.RAGHAVAN, SR.ADVOCATE A/W

2
SRI P.CHINNAPPA, ADVOCATE)

AND:

1 . STATE OF KARNATAKA
BY STATION HOUSE OFFICER
KORAMANGALA POLICE STATION,
BENGALURU – 560 095.

2 . MR. SRIKANTEGOWDA B. (PSI)
AGED ABOUT 32 YEARS,
WORKING AT,
KORAMANGALA POLICE STATION,
BENGALURU CITY - 560 095.

... RESPONDENTS

(BY SRI B.N.JAGADEESHA, ADDL.SPP FOR R-1)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 528 OF
BNSS, 2023 PRAYING TO (A) ISSUE A WRIT OF CERTIORARI,
ORDER OR DIRECTION OF APPROPRIATE NATURE QUASHING THE
COMPLAINT AND F.I.R. BOTH DATED 16.01.2026 REGISTERED AS
CRIME NO. 25 OF 2026 BY KORAMANGALA POLICE STATION,
BENGALURU, PENDING ON THE FILE OF PRINCIPAL CITY CIVIL AND
SESSIONS JUDGE (CCH-1), BENGALURU, AS AGAINST PETITIONER
AND ITS DIRECTORS, FOR ALLEGED OFFENCES UNDER SECTIONS
21(1) AND 21(2) OF THE BANNING OF UNREGULATED DEPOSIT
SCHEMES ACT, 2019 (ANNEXURE-A AND B); (B) CONSEQUENTLY,
DECLARE THAT ALL ACTIONS TAKEN PURSUANT TO COMPLAINT
AND F.I.R. BOTH DATED 16.01.2026 REGISTERED AS CRIME NO.
25 OF 2026 BY KORAMANGALA POLICE STATION, BENGALURU, ARE
ILLEGAL, ARBITRARY AND VOID AB INITIO (ANNEXURE-A AND B).

3
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 21.02.2026, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-

CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

CAV ORDER

The petitioners/accused 3 and 4 are standing at the doors of
this Court calling in question registration of a crime in Crime No.25
of 2026 registered for offences punishable under Section 21(1) and
21(2) of the Banning of Unregulated Deposit Schemes Act, 2019
(hereinafter referred to as ‘the Act’ for short).

2. Heard Sri K.G.Raghavan, learned senior counsel appearing
for the petitioners and Sri B.N.Jagadeesha, learned Additional State
Public Prosecutor appearing for respondent No.1.

3. Facts adumbrated are as follows: -

th
3.1. The 4 accused/petitioner No.2 is a Company registered
under the provisions of the Companies Act, 2013 in the name and
style of Jar Gold Retail Private Limited (‘the Company’ for short).
nd
The 2 respondent/Police Sub-Inspector is the complainant.

4
Therefore, it is a suo-motu complaint by the State. Petitioner No.1
th
is one of the Directors of the 4 accused/Company. Accused Nos. 1
and 2 viz., Misbah Ashraf and Sandesh Nahar are not before the
st
Court. Only the 1 petitioner/ accused No.3 and the Company have
preferred the subject petition. Thus, all the four are accused in the
subject crime. On 16-01-2026 search warrants were secured and
the office and houses of the accused were searched. The search
yielded certain materials. Those materials form the fulcrum of the
crime in Crime No.25 of 2026.

3.2. Petitioner No.2/Company is co-founded and run by the
st
1 petitioner as an e-commerce seller of gold. Every transaction by
their customers, notwithstanding the quantum of money involved,
involves a concluded purchase and sale of physical gold bullion. A
separate invoice is generated for every purchase and sale
transaction. Each payment of such purchase and sale is through UPI
and other electronic mode. The ownership and the physical gold
bullion is transferred in favour of the purchaser immediately upon
completion of the transaction. The physical gold bullion is
independently manufactured and sourced from third party entities.

5
The petitioners claim that they do not retain any ownership or
physical possession of the gold bullion upon completion of purchase
by the customers. The costs of storage of gold bullion by third
party vault for the customers and related insurance is borne by
accused No.4/ Company and is a part of the perks offered by the
Company to its customers. It claims to have 250 employees in its
registered office at Koramangala. A mobile application is also
developed, so that the customers can choose to purchase gold
equivalent to the monetary value of their choosing starting from
₹10/-. Upon each purchase, it is invoiced and taxes are paid and
the corresponding equivalent amount of 24 karat of physical gold is
stored in a highly secure, fully insured independent vault managed
by recognized custodian. The petitioners aver in the petition that
they do not deal in electronic gold products but only engage in the
sale of gold that are fully backed by physical bullion.

3.3. On 14-10-2025 the Police officials from the jurisdictional
Koramangala Police Station visit the petitioners and requested one
of the Directors to accompany to answer certain queries about the
business. After answer of the queries, a notice comes to be issued

6
on 17-10-2025 requesting several information and all documents be
placed before them within 24 hours. The petitioners are said to
have sought some information. When reply was not received,
repeated notices started being issued to the petitioners on the kind
of business that they are engaged in. On 18-02-2026 the
jurisdictional Police and the officials of the Crime Investigation
Department, armed with the search warrant, searched the office
premises of the petitioners, the houses of the Directors and seized
several documents viz., hard copies, mobile phones, cordoned of
office premises and issued debit freeze orders against the account
held by the petitioners/Company. All this happened pursuant to
registration of crime in Crime No.25 of 2026. It is this that is called
in question by the Company and its office bearers.

SUBMISSIONS:

PETITIONERS’:

4.1. The learned senior counsel Sri K.G. Raghavan appearing
for the petitioners would vehemently contend that the crime
registered against these petitioners for offences punishable under

7
Section 21(1) and (2) of the Act does not get attracted in the case
at all. They do not deal with any deposits, regulated or unregulated.
The purchase done is in digital. It is stored in the vault outside with
a reputed gold storage Company by name Brinks and, therefore,
there is no offence that can be laid against the Company or its
office bearers. The learned senior counsel would emphasize on the
fact that there is not a single depositor who had complained that he
has lost his money for the last 5 years. The Company which was
start up in the year 2021 with zero turnover has grown to a turn
over of ₹4000/- crores today and, therefore, it is investors eye that
has fallen upon the Company and its office bearers. The entire
office is sealed and accounts are frozen for no crime that they have
committed. On suspicion that it may become a crime in future the
State sets the criminal law into motion. If the Act is not attracted
there is no offence that can be investigated by the State.

4.2. The learned senior counsel further submits that there is
no fundamental jurisdictional error or thought or suspicion that
money received by the Company, in the course of sale of gold,
constitute deposit under Section 2(4) of the Act. It is the claim of

8
the learned senior counsel that the Company operates a digital
platform facility, purchase and sale of physical gold, upon payment.
Every bid Company in the gold bullion market does this. If the
petitioners are doing it, he would submit, that it cannot become a
crime. The suo motu complaint is on a third-party e-mail
communication who is a stranger and not a customer of the
Company and has no transaction on the platform, as allegations are
mechanically accepted and criminal law is set into motion.

4.3. The RBI and the SEBI have knowledge that the
petitioners’ business does not fall within their domain of regulation.
The business of the petitioners is sale of movable property i.e., gold
which is stored in Brinks India Private Limited. It has all the
necessary staff who would answer the customer call. It is based
upon customers choice, there would be delivery of physical gold. He
would further submit that sale of digital gold is legitimate business
endorsed by Government of India. On all these counts, the learned
senior counsel seeks that the crime be quashed.

9
THE STATE:

5. Per contra, the learned Additional State Public Prosecutor
Sri B.N. Jagadeesha would place on record the entire material
against these petitioners for perusal of the Court. It is his
contention that the crime is under the Act. It must not be let to
problem resulting in huge scam. He would contend if SEBI and RBI
are not regulating who is regulating ₹4,000/- crores business of the
Company, none. Therefore, these unregulated deposits should be
nipped in the bud, failing which, it would lead to become a huge
scam. He would submit that the Act is invoked to register the
crime. A FIR is not an encyclopedia of offence. Any other offence
can spring post investigation. To say that it does not amount to
deposit today and quash the crime would be killing the cause itself.
He would, therefore, submit that investigation at least must be
permitted to be continued, so that the money invested by scores
and scores of people is not looted by these petitioners.

6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.

10
CONSIDERATION:

7. 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,

11
Please refer to the trailing mail and attachments on the
captioned subject.

2. 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).

3. 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 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.

4. 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.

6. Since these companies are not regulated by RBI but are
registered under RoC Bengaluru, the same was forwarded to
RoC, Bengaluru for necessary action.

7. 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.

Regards,
साभार

बाजार आसचना य नट / Market Intelligence Unit
पय वेण वभाग / Department of Supervision
भा . र . वै ., ब / Reserve Bank of India, Bengaluru
गलू
फोन / Ph: 080-22180364/383/379”

12

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 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

13
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”

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:

“ಕ ಾಟಕ ಸ ಾರ

ೕ ಇ ಾೆ

: 54/ -4/ /2025 ,
ಸಂ ೆ ಅಪ ಾಧ ಓ ೕ ಆಯುಕ ರ ಕ ೇ!

"ೆಂಗಳ%ರು ನಗರ
: 10-11-2025
'

(ಾಪನ (ಾಪನ
(ಾಪನ (ಾಪನ

:- JAR Gold Retail Private Limited & Jarfin Retail
)ಷಯ
Private Limited .
ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಕು!ತು

:- : -12/45/2025. : 21.10.2025.
ಉ ೆ8ೕಖ ಪ.:ಾನ ಕ ೇ! ಪತ. ಸಂ ಅಪ ಾಧ '

*
, MI Unit
;ೕಲ=ಂಡ )ಷಯ ೆ= ಸಂಬಂ@ ದಂAೆ ಉ ೆ8ೕBತ ಪ.:ಾನ ಕ ೇ!ಯ ಪತ.ದ 8
- "Jar digital Gold"
ರವರ ಇ ;ೕC ನ 8 ಸಂDೆEಯು ತನF Gೇ' ೆಯ ಮೂಲಕ HIಟC 1ೋCJ
,
ಹೂH ೆಗಳನುF Lೕಕ!ಸುMದುN ಆ ಹೂH ೆಗಳನುF ೇರGಾO PನFದ ರೂಪದ 8 +ೕಡQೆ HIಟC
, 30%
ಾAೆಯ8 ಉR ೊಂHರುವSದು ಗಮನ ೆ= ಬಂ'Qೆ ಇQೇ !ೕMTಾO ಹೂH ೆQಾರ!1ೆ !ಂದ
40 % . Jar Gold Retail
ವ ೆ1ೆ ೆಫರC Vೋನ +ೕಡ ಾಗುMQೆ ಎಂದು ವರ'TಾOQೆ ಈ

14
Private Limited Jarfin Retail Private Limited
Yಾಗೂ ಕಂಪ+ಗಳ3 ಆZ [ ಐ
( RoC),
+ಯಂತ.ಣ ೆ= ಒಳಪಡುವS'ಲ8Qೆ ಕಂಪ+ಗಳ ೋಂದ_ +ಯಂತ.ಕ "ೆಂಗಳ%!ನ 8
,
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.
+ಯಮ ಉಲ8ಂಘ ೆಗಳ Dಾಧ Aೆ ಇರುವSದ!ಂದ ಅಗತ ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ಸೂP ರುAಾೆ

,
ಆದN!ಂದ ಪ.:ಾನ ಕ ೇ!ಯ ಪತ.ದ 8 ಪ.Dಾ ರುವ ಎ ಾ8 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
( ),
ಅಪ ಾಧಗಳ3 "ೆಂ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.

8. 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.

10,968 people found this review helpful

15

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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 [email protected] 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.
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

16
.
"ೆಂಗಳ%ರು ನಗರ

,
fಾನ ೇ

:- JAR GOLD RETAIL PRIVATE LIMITED
)ಷಯ ಕಂಪ+ Yಾಗೂ
THE BANNING
ಸಹ ಕಂಪ+ಗಳ3 ಮತು ಅದರ +Qೇ ಶಕರುಗಳ3
OF UNREGULATED DEPOSIT SCHEMES ACT,
2019
ಅH ಸಂಬಂ@ ದ ೆಗುೇಟZ ಅH ೊಂQಾ` ೊಳ4Qೆ

ಅ+ಯಂM.ತ mೕಜ ೆ !ೕMಯ 8 n"ೈC ಅ 8 ೇಷo ಮೂಲಕ

PನFದ ಖ!ೕ' ಮತು ಹೂH ೆ fಾH Dಾವ ಜ+ಕ!ಂದ

jೇವ_ಯನುF ಅಕ.ಮGಾO Lೕಕ!ದ ಕು!ತಂAೆ ಕ.ಮ ೈ1ೊಳ4ಲು
.
ಸ ಾರದ ಪರGಾO ದೂರು

*

, , 2023
ಾನು g.ೕಕಂjೇ1ೌಡ ಎಐ !ಂದ ೋರಮಂಗಲ ೕ jಾkೆಯ 8 ಕತ ವ
.
+ವ bಸುMರುAೇೆ ನನF ೕ jಾkೆಯ jಾkಾ@ ಾ!ಗR1ೆ fಾನ ೕ ಆಯುಕ ರ ಕ ೇ!
.54/ -4/ /2025, : 10.11.2025, ,
(ಾಪನ ಸಂ ಅಪ ಾಧ ಓ ' ಾಂಕ fಾನ ಉಪ ೕ ಆಯುಕ ರು
, . /591/ ( )/2025,
ಆ1ೆFಯ )Vಾಗ "ೆಂಗಳ%ರು ರವರ (ಾಪನ ಸಂ ಆZಎಂ H ಆ) ' ಾಂಕ
20.11.2025, . -12/45/2025, 21.10.2025
ಪ.:ಾನ ಕpೇ! ಪತ. ಸಂ ಅಪ ಾಧ ' ಾಂಕ
eÉÆvÉUÉ
-
!ಸq "ಾ ಂr ಆs ಇಂHTಾ ರವರ fಾರುಕtೆu )ಚwkಾ ದಳ ಇ ;ೕC ವರ' ' ಾಂಕ
20.07.2025 JAR GOLD RETAIL PRIVATE
Lೕಕ! ನನ1ೆ ನನF ;ೕ ಾ@ ಾ!ಯು ಸದ!
LIMITED
ಕಂಪ+ ನxೆಸುM ರುವ ಬಂ1ಾರದ ಖ!ೕ' ಮತು ಹೂH ೆಗಳ ಬ1ೆy zಾ.ಥ|ಕ )pಾರkೆ
,
fಾH ವರ' ಸ 8ಸುವಂAೆ +ೕHದ ಸೂಚ ೆಯ ;ೕ ೆ1ೆ ಾನು zಾ.ಥ|ಕ )pಾರkೆಯನುF
.
ೈ1ೊಂHರುAೇೆ

ಸದ! !ಸq "ಾ ಂr ಆs ಇಂHTಾ ರವರ fಾರುಕtೆu )ಚwkಾ ದಳದವರು ಸದ!

ಕಂಪ+ಯು ನxೆಸುM ರುವ ವ ವYಾರದ ಾನೂ+ನ fಾನ Aೆ ಬ1ೆy ಸಂಶಯ ವ ಕಪH ಸದ!

ಸಂDೆEಯವರು ತಮ} Gೇ' ೆಯ ªÀÄÆ®PÀ Dಾವ ಜ+ಕ!ಂದ HIಟC 1ೋCJ ಹೂH ೆಗಳನುF
, -
Lೕಕ!ಸುMದುN ಸದ! ವ ವYಾರವS ಅ+ಯಂM.ತGಾOದುN ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ತಮ} ಇ ;ೕC ವರ'
20.07.2025
' ಾಂಕ ಅನುF ಆಧ! ೈ1ೊಂಡ zಾ.ಥ|ಕ )pಾರkೆಯ 8 ಈ ೆಳಕಂಡ ಸಂಗMಗಳ3
.
ಕಂಡುಬಂ'ರುತ Gೆ

1. JAR GOLD RETAIL PRIVATE LIMITED
ಕಂಪ+ ಇದು ಕಂಪ+ ಾನೂ+ನ8
, . 752,
ಒಂದು ೊಂQಾ`ತ ಕಂಪ+TಾOದುN ಸದ! ಕ ೇ!ಯ ೊಂQಾ`ತ )~ಾಸವS ನಂ

17
18 , 5 , 6 , .
ೇ ;ೖo ೇ ಾ. ೋರಮಂಗಲ ೇ "ಾ8r "ೆಂಗಳ%!ನ 8 ಇರುತ Qೆ ಸದ!
1) Misbah Ashraf, 2) Sandesh Nahar, 3) Nishchay Babu
ಕಂಪ+1ೆ
Arkalgud .
ರವರುಗಳ3 +Qೇ ಶಕರುಗ~ಾOರುAಾೆ

2.
ಸದ! ಕಂಪ+ಯು ಮತು ಅದರ +Qೇ ಶಕರುಗಳ3 HIಟC ಅ 8 ೇಷo ಮೂಲಕ
,
Dಾವ ಜ+ಕ!1ೆ PನFದ 8 ಹೂH ೆ fಾಡುವ ಕು!ತಂAೆ ಅವ ಾಶ fಾH ೊಡುMದುN ಆದ ೆ ಈ
Securities and Exchange Board of India (SEBI)
ವ ವYಾರಗಳ ಕು!ತಂAೆ

'ಂದ ಅಥGಾ ಸಂಬಂ@ ದ +ಯಂತ.ಣ zಾ.@ ಾರ'ಂದ C£ÀÄªÀÄw ¥ÀqÉAiÀÄzÉÃ ಅಥGಾ

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.
;ೕ ೊFೕಟ ೆ= ಕಂಡುಬರುತ Qೆ

3.
ಸದ! ಸಂDೆEಯು ಮತು ಅದರ +Qೇ ಶಕರುಗಳ3 Dಾವ ಜ+ಕರುಗRಂದ ಹತು

ರೂzಾ`ಗRಂದ ಒಂದು ಲw ರೂzಾ`ಗಳವ ೆ1ೆ ಹೂH ೆಗಳನುF HIಟC 1ೋCJ Yೆಸ!ನ 8
, -
Lೕಕ!ಸುMದುN ಅಸ PನFದ ಬದ 1ೆ HIಟC ರೂಪದ 8 PನFವS ಸಂಬಂ@ ದ 1ಾ.ಹಕರ ಇ

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fಾH ೊಡುAೇGೆ ಎಂದು Yೇಳ3ವ ಅ+ಯಂM.ತ mೕಜ ೆಯನುF YೊರH
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Dಾವ ಜ+ಕ1ೊRರುತQೆ

4. -
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ಸದ! ಸಂDೆEಯ 8 Aೆ ೆದು ಆ ಮೂಲಕ ಹಣವನುF ಹೂH ೆ fಾH HIಟC ರೂಪದ 8 PನFದ
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jೇವ_ಗಳನುF Yೊಂ'ರುAಾ ೆ ಇದರ •ೊAೆ ಸದ! ಕಂಪ+ಯು ತನF ಹೂH ೆQಾರ!1ೆ ತಮ}
. 30 40
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Referral Bonus
ೊಡುವSQಾO YೇR ನಂ[ ಹೂH ೆಗಳನುF ಮತು jೇವ_ಗಳನುF

Lೕಕ!ಸುMರುತQೆ

5. zಾ.ಥ|ಕ )pಾರkೆಯ 8 ಸದ! ಸಂDೆE1ೆ ಸಂಬಂ@ ದ zಾ.@ ಾರದ ಅನುಮMಗಳನುF ಮತು
26.11.2025 04.12.2025
ವ ವYಾರದ ಸLರೂಪಗಳನುF ಸ 8ಸುವಂAೆ ' ಾಂಕ Yಾಗೂ ರಂದು
. 02.12.2025
ೋhೕ +ೕಡ ಾOತು ಅದ ೆ= ಪ.MTಾO ಸದ! ಸಂDೆEಯು ' ಾಂಕ Yಾಗೂ
18.12.2025 ,
ರಂದು ಉತ ರವನುF +ೕHದುN ಅದರ 8 ಸದ!ಯವರು ಸದ! ಕಂಪ+ಯವರು
/
Dಾವ ಜ+ಕರುಗಳ3 1ಾ.ಹಕರುಗR1ೆ n"ೈC ಅ 8 ೇಷo ಮತು Gೆƒ Dೈ„ ನ 8 PನFವನುF
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fಾH ೊಂಡು ಕಂಪ+ಯ +ಯಮ ಮತು ಷರತು ಗಳ ಅನLಯ 1ಾ.ಹಕರುಗRಂದ PನFದ ;ೕ ೆ
. . ,
ಯು ಐ ಮು ಾಂತರ ಹಣವನುF ಹೂH ೆ fಾH ೊಳ34MರುವSQಾO 1ಾ.ಹಕರು ಖ!ೕ'

18

fಾಡುವ VೌMಕ PನFದ ಅನುಗುಣGಾO ಸfಾನ nತ ದ PನFವನುF ); fಾಡ ಾದ
,
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.
HIಟC Qಾಖ ೆ Yೊಂ'ರುAಾ ೆ 1ಾ.ಹಕರು ತಮ} ಒxೆತನದ PನFವನುF )ದು ಾ}ನGಾO
/ /
ನಗದು ರೂಪದ 8 fಾ ಾಟ fಾಡುವ VೌMಕ PನFದ ಾಣಗ~ಾO PನFದ ಭರಣಗಳ ಾFO
.
ಪ!ವM ಸುವ ಆ‡= Yೊಂ'ರುವSQಾO MR ರುAಾೆ ಆದ ೆ ಸದ! ವ ವYಾರವS
SEBI
ಸಂಬಂ@ ದ +ಯಂM.ಕ zಾ.@ೕ ಾರGಾದ ಅಥGಾ ಇತ ೆ zಾ.@ ಾರದH ೊಂದ_

fಾH ೊಂHದNರ ಬ1ೆy TಾವSQೇ )ಷಯವನುF ಅಥGಾ Qಾಖ ಾMಗಳನುF

YಾಜರುಪH ರುವS'ಲ8 ಮತು ಅಂತಹ ೊಂದ_ ಮತು ಅನುಮM ಅಗತ )ಲ8Gೆಂದು

ಉ ೆ8ೕBದN!ಂದ ಸದ! ಸಂDೆE ಮತು +Qೇ ಶಕರುಗಳ3 ತಮ} ;ೕ ಾ=_ದ ವ ವYಾರವನುF

+ಯಂˆರಕ zಾ.@ ಾರ'ಂದ ಅನುಮMಯನುF ಪxೆಯ ಾರQೇ ಮತು

ೊಂQಾ` ೊಳ4ಾರQೇ ಅ+ಯಂM.ತGಾO ಸದ! mೕಜ ೆಯನುF ರೂ

Dಾವ ಜ+ಕ!ಂದ ಹಣವನುF ಹೂH ೆ fಾಡುವSದರ ಮೂಲಕ jೇವ_ fಾH ೊಳ34MರುವSದು
3 21(1) (2)
ಬ‰Š ಅ@+ಯಮದ ಕಲಂ ಅನುF ಉಲ8ಂ‹ ಕಲಂ ಮತು ರHಯ 8 gŒಾಹ
.
ಅಪ ಾಧ ಎಸOದುN ;ೕ ೊFೕಟ ೆ= ಕಂಡುಬರುತ Qೆ

3.3
6. ಸದ! ಸಂDೆE ಮತು +Qೇ ಶಕರುಗಳ3 +ೕHದ fಾbMಯಂAೆ ಸುfಾರು ೋh ಜನರಷುu
- ,
ತಮ} n"ೈC ಅ 8 ೇಷo ಮೂಲಕ ಇ ಾAೆಗಳನುF Aೆ ೆದು ವ ವYಾರ fಾಡುM ದುN ಈ
100
b ೆFೆಯ8 ಸದ! ಸಂDೆE ಮತು +Qೇ ಶಕರುಗಳ3 ಸುfಾರು ೋhOಂತ |Oಲು
,
ಹಣವನುF Dಾವ ಜ+ಕ!ಂದ Lೕಕ!ರುವ ಬ1ೆy fಾbM ಇದುN ಈ ಕು!ತಂAೆ ತಮ} ೆಕ=
.
ಪತ.ಗಳನುF ಮತು fಾbMಗಳನುF +ೕಡQೇ bಂQೇಟು YಾcರುAಾ ೆ ಅ ೇಕ "ಾ! ಾನು

Dಾವ ಜ+ಕ!ಂದ Lೕಕ!ದ ಹಣದ ಒಟುu nಬಲಗು fಾbM +ೕH ಎಂದು ೇRQಾNOಯೂ
.
ಕೂಡ YಾಜರುಪH ರುವS'ಲ8 ಈ b ೆFೆಯ8 ಸದ! ಸಂDೆEಯು +ೕHದ fಾbM ;ೕ ೆ
100
ಸುfಾರು ೋh «Ä Oಲು ಹಣವನುF Dಾವ ಜ+ಕ!ಂದ ಈ ಅ+ಯಂM.ತ mೕಜ ೆ
.
ಅHಯ 8 ಆ ೋತರು Lೕಕ! ಅಪ ಾಧ ಎಸOರುAಾ ೆ

7. SEBI PR No. 70/2025, dated 08.11.2025
ಸಂDೆEಯವರು ತಮ} ಪತ. ರ ಮೂಲಕ
/ -
Dಾವ ಜ+ಕ!1ೆ ಈ !ೕMಯ HIಟC 1ೋCJ ಇ 1ೋCJ zಾ.ಡ ವ ವYಾರವS
PïÖ÷ì
,
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.
ಕ.ಮ ೈ1ೊಳ34ವಂAೆ ಸೂP ರುತQೆ

8.
ಸದ! ಸಂDೆE ಮತು +Qೇ ಶಕರುಗಳ3 AಾವS fಾಡುM ರುವ ವ ವYಾರವS ಅ+ಯಂM.ತGಾOGೆ

ಎಂದು MRದೂ ಸಹ Dಾವ ಜ+ಕ!1ೆ +ಜ ಸಂಗMಯನುF MRಸQೇ ತಮ} HIಟC zಾ8„

Žಾ• ಮೂಲಕ ಯನುF Aೆ ೆದು ಹಣ ಹೂH ೆ fಾಡುವSದರ ಮೂಲಕ PನF ಖ!ೕ'
E-SÁvÉ

19

jೇವ_ ಇಟುu ೊಂಡು ತಮ1ೆ "ೇ ಾQಾಗ fಾ!ದ ಹಣವನುF ಅವರ ಾAೆ`ಂದ ಸಂDೆE
3.3 100
ಮೂಲಕ Dೆ~ೆದು ೊಳ4ಬಹುದು ಎಂದು ನಂ[ ಸುfಾರು ೋh ಜನ jA ದ ಸುfಾರು

ೋhOಂತ Yೆಚು• ಹಣವನುF Lೕಕ! ಹೂH ೆ fಾH ೊಂಡು ನಂತರ ಮರRಸQೇ nೕಸ
.
fಾಡುವ ಪ.ಯತFದ 8ರುವSದು ಕಂಡುಬರುM Qೆ

9. 21(1) (2) 28
ಸದ! ಬ‰Š ಅ@+ಯಮದ ಕಲಂ ಮತು ಅಪ ಾಧವS ಸದ! ಅ@+ಯಮದ ಕಲಂ
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,
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. 100048/2024 . 102510/2023
hಷo ಸಂ •ೊAೆ1ೆ c.|ನC hಷo ಸಂ ರ 8 ' ಾಂಕ
17.01.2025
ರಂದು +ೕHದ Mೕ ನನುDಾರ ಇಂತಹ ಪ.ಕರಣಗಳನುF ೕ

jಾkಾ@ ಾ!ಯು Qಾಖ ೊಂಡು ತ+ ೆ fಾಡಲು ಅ@ ಾರ)Qೆ ಎಂದು MೕಪS +ೕHದNರ
JAR GOLD RETAIL PRIVATE
b ೆFೆಯ8 ಸ ಾರದ ಪರGಾO ಾನು ಈ 'ನ
LIMITED 1) Misbah
ಕಂಪ+ Yಾಗೂ ಸಹ ಕಂಪ+ಗಳ3 ಮತು ಅದರ +Qೇ ಶಕರುಗ~ಾದ
Ashraf, 2) Sandesh Nahar, 3) Nishchay Babu Arkalgud
ರವರುಗಳ
.
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2) Jar Gold Retail Private Limited & Jarfin Retail Private Limited :
,
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, /2025,
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:20/11/2025.
'

20
3) Jar Gold Retail Private Limited & Jarfin Retail Private Limited

ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಸಂಬಂಧ fಾನ ೕ ಆಯುಕ ರವರ ಕ ೇ!
.54/ -4/ /2025, :10/11/2025.
(ಾಪನ ನಂ ಅಪ ಾಧ ಓ '

4) Jar Gold Retail Private Limited & Jarfin Retail Private Limited
&
ಕಂಪ+ಗಳ )ರುದ- ಕ.ಮ ೈ1ೊಳ34ವ ಸಂಬಂಧ fಾನ ಮYಾ +Qೇ ಶಕರು ಆರwಕ ಮYಾ
, -12/45/2025,
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:21/10/2025.
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5) RBI MI Unit :13/10/2025 &
ರವರ ಈ;ೕC ' ಾಂಕ ರ ಪ.M ಅದ ೊಂ'1ೆ ಇರುವ
.
Qಾಖ ಾMಗಳ ಪ.Mಗಳ3

6) . . . 173(3)(1)
ಆZ [ ಐ ಎಂ ಐ ಯೂ+„ ರವರ ಈ;ೕC ದೂ!ನ ;ೕ ೆ ಕಲಂ
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:25/11/2025.
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7) Jar Gold Retail Private Limited
PÀA¥À¤ ¤zÉÃð±ÀPÀgÀÄUÀ½UÉ zÁR¯ÁwUÀ¼À£ÀÄß
:26/11/2025.
YಾಜರುಪHಸುವಂAೆ ೊhuರುವ ೋh '

8) Jar Gold Retail Private Limited :01/12/2025.
ಕಂಪ+ ರವರ ! ಪತ. '
¥ÉèöÊ

9) Jar Gold Retail Private Limited
PÀA¥À¤ ¤zÉÃð±ÀPÀgÀÄUÀ½UÉ zÁR¯ÁwUÀ¼À£ÀÄß
:04/12/2025.
YಾಜರುಪHಸುವಂAೆ ೊhuರುವ ೋh '

10) Jar Gold Retail Private Limited : 12/12/2025
ಕಂಪ+ ರವರ ! ¥ÉèöÊ ಪತ. '
& .
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11) SEBI, Southeren Regional Office, Chennai Jar Gold Retail
gÀªÀjUÉ
Private & Jarfin Retail Private Limited
PÀA¥À¤UÀ¼À ¸ÀA§AzsÀ ªÀiÁ»w
:05/12/2025.
ಈ;ೕC ಮು ಾಂತರ ೊhuರುವ ೋh '
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ಾನೂನು ಸಲYೆ1ಾರ!ಂದ ಅ™zಾ.ಯ ವರ' ೊH ೊಡುವಂAೆ fಾನ ಉಪ ೕ
, , :05/12/2025.
ಆಯುಕ ರು ಆ1ೆFಯ )Vಾಗ "ೆಂಗಳ%ರು ರವ!1ೆ ೋ!ರುವ ಮನ) '

21
13) Chief Manager, Investment Management department, SEBI,
Mumbai Jar Gold Retail Private Limited & Jarfin Retail
gÀªÀjUÉ
Private Limited
PÀA¥À¤UÀ¼À ಸಂಬಂಧ fಾbM +ೕಡುವಂAೆ ೊhuರುವ ೋh
:08/12/2025.
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:05/12/2025.
)Vಾಗ ರವ!1ೆ +Gೇ' ೊಂHರುವ ಪˆರ '

15) Lakshminarasimhan
ಆZ[ಐ ರವ!1ೆ ಈ;ೕC ಮು ಾಂತರ ದೂರು +ೕHದN
Santhanam
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:19/12/2025.
ದೂರನುF +ೕಡುವಂAೆ ೊhuರುವ ೋh '

16) SEBI PR No. 70/2025, :08/11/2025.
gÀªÀgÀ ¥ÀwæPÁ ¥ÀæPÀluÉ '

17) , ,
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Retail Private Limited & Jarfin Retail Private Limited
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:08/12/2025.
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PÀA¥À¤UÀ¼À «gÀÄzÀÞ
:17/12/2025.
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PÁ£ÀÆ£ÀÄ PÀæªÀÄ

20) Jar Gold Retail Private Limited
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Manager, SEBI, Southern Regional Office
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16/01/2026 10:30 PSI-2
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25/2016 - 21( 1 ) 21 (2) BUDS Act 2019
ಕಲಂ ಮತು !ೕ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.

(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.
… … …
22. 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

23
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;
( 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

24
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;
( l ) an amount received in the course of, or for the purpose
of, business and bearing a genuine connection to such
business including—

25
( 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;

26
( 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.

9. 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

27
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.

10. 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 to quash criminal
proceedings in exercise of jurisdiction 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

28
Apex Court in the case of KAPTAN SINGH v. STATE OF UTTAR
1
PRADESH , wherein the Apex Court has held as follows:
“…. …. ….
9.1. 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 allegations and/or enter into the merits of the

1
(2021) 9 SCC 35

29
case as if the High Court is exercising the appellate
jurisdiction 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.

9.2. 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 jurisdiction 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

30
of Gujarat, (2019) 10 SCC 337 : (2020) 1 SCC (Cri) 173] ,
referred to hereinabove.

9.3. 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
jurisdiction in quashing the criminal proceedings in exercise
of powers under Section 482 Cr.P.C.,

10. 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.
11. Now so far as the finding recorded by the High
Court that no case is made out for the offence under

31
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 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.

12. 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 jurisdiction and/or
conducting the trial. The High Court has exceeded its
jurisdiction in quashing the criminal proceedings in
exercise of powers under Section 482 Cr.P.C.,

13. 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

32
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.

14. 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.

11. 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

33
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 – commodities, digital assets, gold linked assurances
and other alluring constructs designed to circumvent
regulatory vigilance.

12. The BUDS Act, being a remedial and protective
legislation, was enacted precisely to arrest such ingenuity in
evasion. To confine the expression money within the narrow
confines of physical currency, would become a pedantic and
myopic construction, which would render the statute otiose

34
in the face of evolving financial stratagems and defeat the
very mischief it was designed to suppress. Therefore, a
purposive, expansive and pragmatic interpretation alone
would advance the object of the enactment and uphold the
protective mantle to extend over unsuspecting deposits.
Even otherwise, what is now challenged is an FIR. The reason for
challenge is the crime not fitting itself in the definition of the word
deposit. It is trite law that FIR is not an encyclopedia of offences, it
is only to trigger investigation. Different offences may come in while
filing the final report. It becomes apposite to quote a paragraph of
the judgment of the Apex Court in the case of NEEHARIKA
2
INFRASTRUCTURE (P) LTD. v. STATE OF MAHARASHTRA ,
wherein the Apex Court has held as follows:
“…. …. ….

33.12. The first information report is not an
encyclopaedia which must disclose all facts and details
relating to the offence reported. Therefore, when the
investigation by the police is in progress, the court
should not go into the merits of the allegations in the
FIR. Police must be permitted to complete the
investigation. It would be premature to pronounce the
conclusion based on hazy facts that the complaint/FIR
does not deserve to be investigated or that it amounts

2
(2021) 19 SCC 401

35
to abuse of process of law. After investigation, if the
investigating officer finds that there is no substance in
the application made by the complainant, the
investigating officer may file an appropriate
report/summary before the learned Magistrate which
may be considered by the learned Magistrate in
accordance with the known procedure .”

(Emphasis supplied)

In the light of the afore-narrated facts, glaring enough they are, the
allegations disclose serious and triable issues, which demand
thorough investigation.

13. Therefore, finding no merit in the petition, the petition
stands rejected.

It is made clear that the observations made during the course
of this order are only for the purpose of consideration of the case of
the petitioners under Section 528 of the BNSS and the same would
not bind any proceedings pending against any other accused.

Sd/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ