Plea Claims Bank Kept Charging Interest On Gold Loan Without Disclosing Disappearance Of Jewellery, Gujarat High Court Issues Notice

The Gujarat High Court on Tuesday (January 6) issued notice to Indian Bank on a plea alleging disappearance of gold jewellery valuing Rs. 1.15 crore pledged for availing gold loan missing since March 2025, during which period the bank continued to collect interest without informing about the missing gold.Justice Aniruddha P. Mayee while issuing notice to the Union of India, Reserve Bank of India and Indian Bank - Rajkot ordered, “Issue Notice, returnable on 27.01.2026. The learned counsel Mr. Pradip Bhate waives service of notice on behalf of the respondent No.1, whereas the learned counsel Mr. Amar Bhatt waives service of notice on behalf of the respondent No.2. Direct service for respondent No.3 is permitted.”The petitioners had challenged the alleged suppression of disappearance of gold for seven months and failure of the bank to compensate the petitioners.The plea stated that the petitioners availed an MSME Jewel Loan (Gold Loan) service in 2023 from Indian Bank pledging their gold ornaments being necklaces, bangles, rings, gemstones as security that weighed approx. 1004.10 grams which was valued at around Rs. 1.15 crores.It states that the petitioners paid timely interest under the loan and from 1st September 2024 to 21st November 2025, amounting to Rs. 4,12,718. Further, the plea contends that the jewel loan accounts were subject to annual renewal, during which the pledged gold would be physically appraised in the presence of the Petitioners and a valuer. The Petitioners had successfully renewed the loans in earlier years and relied upon the Bank's assurance of safe custody of the pledged jewellery. Until October 2025, the Bank never intimated any issue regarding the security of the pledged gold.Further it states, in anticipation of renewal, the petitioners submitted written requests on 28th October 2025, to Indian Bank. Upon inquiry, the Bank admitted the pledged gold had gone missing and the loss was detected during an inspection in March 2025. The plea states that the bank did not inform the petitioners for seven months and continued to demand and accept interest payments during this period, leading to concealment and breach of duty of care.The petitioners then submitted representations on 5th November, 2025 claimed reimbursement. Despite this, the Indian Bank neither reimbursed nor provided a timeline, causing financial uncertainty and mental distress.Furthermore, the petitioners discovered the Bank only made a police application on 22nd July 2025 which was merely a Janva Jog Entry but no FIR was registered.The plea claims that despite admitting the loss in writing, the bank threatened to classify the petitioner's account as Non-Performing Assets (NPA), and impose penal charges thereby negatively affect their credit score.The plea seeks a direction to Union and RBI to take action against the bank and to direct the bank to compensate the petitioners. In the alternative the plea seeks a direction for constitution of an independent vigilance committee to take necessary action against the Bank.Case Title: Mrs. Sangeeta Shyambhai Shah & Anr. vs The Union of India & Ors.Case Number: Special Civil Application No. 3 of 2026Click Here To Read/Download Order

Plea Claims Bank Kept Charging Interest On Gold Loan Without Disclosing Disappearance Of Jewellery, Gujarat High Court Issues Notice

Lovina B Thakkar

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