Supreme Court Acquits Jeweler in ₹6.7 Crore Vijaya Bank Fraud Case Due to Lack of Evidence Under Section 411 IPC

In a significant ruling on February 25, the Supreme Court acquitted a jeweler convicted under Section 411 of the Indian Penal Code (IPC) for receiving stolen property in the high-profile ₹6.7 crore Vijaya Bank fraud case. The Court emphasized that mere possession of stolen property is insufficient for conviction unless the prosecution proves that the accused had knowledge or reason to believe that the property was stolen.

The prosecution failed to establish a direct link between the seized gold bars and the fraudulent funds. Consequently, the Court extended the benefit of the doubt to the jeweler and directed the authorities to return the seized gold.

A bench comprising Justices B.R. Gavai, Prashant Kumar Mishra, and K.V. Viswanathan heard the case, which revolved around a large-scale financial fraud at Vijaya Bank’s Nasik branch in 1997. The fraud involved forged Telegraphic Transfers (TTs) worth ₹6.7 crore, funneled through a fictitious account under the name M/s. Globe International. The funds were withdrawn via bogus demand drafts and allegedly used to purchase gold bars, which were later traced to various individuals, including the appellant.

The Central Bureau of Investigation (CBI) arrested multiple persons, including the appellant, a jeweler, from whose firm gold bars were allegedly recovered. The Trial Court convicted him under Section 411 IPC, ordering the return of the seized gold bars. However, the High Court upheld his conviction while reversing the order to return the gold, directing that the state confiscate it.

On appeal, the Supreme Court overturned the High Court’s decision, citing the lack of conclusive evidence linking the appellant’s gold bars to the fraudulent funds. Justice Mishra, who authored the judgment, relied on the precedent set in Trimbak vs. State of M.P., AIR 1954 SC 39, outlining three essential elements for proving an offense under Section 411 IPC:

1. The stolen property must be in the accused’s possession.
2. The property must have been in another person’s possession before reaching the accused.
3. The accused must have knowledge or reason to believe that the property was stolen.

The Court held that the prosecution failed to prove these elements, particularly the accused’s knowledge of the fraudulent nature of the gold. It further observed that the identity of the gold was not conclusively established, making it impossible to classify it as stolen property.

“The prosecution must establish guilt beyond a reasonable doubt by completing the chain of circumstances against the accused, which it has failed to do in this case,” the judgment noted.

Accordingly, the Supreme Court allowed the appeal, acquitting the jeweler and ordering the return of the seized gold bars.