Archive · 2 Sep 2026
Karnataka Commission Orders Bank to Pay Full Jewellery Value
B.K. Balaraju borrowed money from Canara Bank by pledging gold jewellery.
The jewellery was kept by the bank as security for the loans.
It was later stolen during a robbery.
The bank offered to pay only for the gold inside the jewellery.
Balaraju said this was not enough because jewellery also costs money to make and may contain stones.
A consumer commission agreed with him.
It ordered the bank to pay an extra ₹88,362 with interest.
The bank must also pay compensation and legal expenses.
The decision says stolen jewellery should be valued as jewellery, not just as raw gold.
Canara Bank jewellery pledged for two gold loans was stolen during a robbery.
The bank compensated the borrower for net gold weight but excluded making charges and stone value.
The Karnataka State Commission confirmed an additional payment of ₹88,362 with 9% interest.
Canara Bank must also pay ₹30,000 compensation and ₹10,000 in litigation expenses.
The commission held that banks must account for the value of jewellery as ornaments, not only raw gold.
- Who
- B.K. Balaraju and Canara Bank were the parties; the Karnataka State Disputes Redressal Commission decided the appeal.
- What
- The commission upheld an order requiring Canara Bank to pay additional jewellery value, compensation and litigation expenses after pledged ornaments were stolen.
- When
- The loans were taken on August 30, 2017; the State Commission passed its order on July 30, 2026.
- Where
- The dispute concerned Canara Bank’s Bukkapattana branch in Tumkur district, Karnataka.
- Why
- The commission found that compensation for stolen jewellery must include making charges and stone value, not only the net gold value.
Borrower’s Position
Bank’s Position
How compensation should be calculated
Borrower’s Position
The borrower argued that payment for net gold alone was incomplete and sought 20% for making charges and 3% for stone value.
Bank’s Position
Canara Bank argued that it had already paid the value of the net gold and therefore owed no further amount.
Proof of making charges
Borrower’s Position
The borrower maintained that the lost jewellery’s value included ordinary making charges and the value of stones.
Bank’s Position
The bank said the borrower had not produced documents specifically establishing the claimed making charges and stone value.
Consumer-service liability
Borrower’s Position
The borrower alleged deficiency in service and unfair trade practice because the jewellery was stolen while in bank custody.
Bank’s Position
The bank asked that the district commission’s order be set aside, arguing there was no deficiency in service.
- Additional amount
- ₹88,362, with 9% interest from August 29, 2018
- Compensation
- ₹30,000
- Litigation expenses
- ₹10,000
- Pledged gold
- 120.80 grams under one loan and 133 grams under another
- Loan amounts
- ₹1.50 lakh for each of two gold loans
- Bank’s calculation
- It paid ₹1,56,033 for one loan and valued the second jewellery at approximately ₹2,12,500 based on net gold weight
- Case
- Appeal No. 556/2020, Branch Manager, Canara Bank v. B.K. Balaraju