Karnataka high court to deliver judgment on jar gold writ petition challenging fir under unregulated deposit Schemes Act

BENGALURU: The Karnataka high court posted for judgment a writ petition filed by Jar Gold Retail, a Bengaluru-based digital gold savings startup, challenging an FIR registered by Bengaluru City Police under the Banning of Unregulated Deposit Schemes Act, 2019.

Currently, the case is probed by Criminal Investigation Department.“RBI’s Market Intelligence Unit had written to police, stating there were many loopholes in the Jar gold business; the offers made by the firm to investors may not be full-filled; Also, Refer and Earn methods looks dubious,” quoted a CID source from the letter written by RBI-Market Intelligence Unit. According to the investigating cops, Jar Gold Retail is running its business in city since 2021 and surprisingly, have not got permission from RBI/SEBI.“The firm has 1,521 kgs of gold and 2,541 kgs of silver in form of investments. They are in the lockers of a private firm. However, untill our investigation gets over, there will be no transactions made,” an investigating officer said.The deposit fraud investigation division officials at the CID investigated the FIR on the grounds that the Jar Gold Retail operated without a licence from banking or stock market regulator, SEBI or RBI.

CID officials investigated Jar for alleged offences under Section 21(1) and 21(2) of the Banning of Unregulated Deposit Schemes Act, 2019.The company and its cofounder Nishchay AG moved the high court, seeking an interim stay on all proceedings arising from it and being dealt by the principal city civil and sessions judge at Bengaluru, and for quashing of the January 16 FIR.Justice M Nagaprasanna, who heard both petitioner and the police, on Saturday (Feb 21) posted the case for judgment.The company prayed the court for a direction to break open the lock or seal on the registered office and return, release or defreeze all items seized or blocked, including bank accounts, electronic devices, precious metals etc.The Koramangala Police took up a case after the RBI referred complaints it received to the Bengaluru City Police for investigation. The Koramangala police station, under whose jurisdiction the startup fell, registered a suo moto FIR and transferred the case to CID.“Initially, the directors and others from the firm were not-cooperating with the investigating agency. However, after receiving notices and warnings, they are coopeating now. On Wednesday, all the three directors had appear before the investigating team in CID headquarters. Again, they will appear on Thursday too,” a senior IPS officer said.