Karnataka borrower wins compensation for gold loan jewellery stolen in bank robbery
A Karnataka man who had pledged gold jewellery for loans successfully sued Canara Bank after the items were stolen in a robbery, securing payment for metal, making charges, stones, and compensation.
In August 2017, a resident of Tumkur opened two gold-loan accounts with Canara Bank, pledging jewellery of 120.80 g and 133 g against Rs 1,50,000 loans each. A robbery at the branch resulted in the theft of the pledged items. The bank subsequently paid the borrower the gold’s market value based on net weights of 90 g and 85 g, but the borrower sought further reimbursement for 20 % making charges and 3 % stone value, amounting to Rs 88,362.
He filed a complaint alleging deficiency in service, and the District Commission ruled in his favour, directing the bank to pay the additional amount, Rs 30,000 compensation, and Rs 10,000 litigation costs with 9 % interest from 29.08.2018. Canara Bank appealed, arguing no liability for the extra charges, but the Karnataka State Disputes Redressal Commission rejected the appeal, affirming that banks must cover both making charges and stone value when jewellery in their custody is lost to theft.
Why it matters
The ruling clarifies banks' liability for pledged jewellery lost to robbery, affecting borrowers and financial institutions nationwide.
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