Police said on Saturday that Babulal, the father of Meena (14) and Uma (6), borrowed Rs 34,000 from a distant relative N Jehangir some months ago. Since Babulal was not able to repay the loan, he left his daughters at Jehangir's house in Maithapur village.
According to Meena, her mother promised to take them back home after some time. However, Jehangir's neighbours saw him forcing the 14-year-old and her younger sister to toil hard every day. They lodged a complaint with the Raikal police.
During the inquiry, it emerged that the blacksmith had sexually exploited Meena often. The girl said that Jehangir used to abuse her in the absence of his wife.
Police therefore registered a case against Jehangir under Sections 342 (wrongful confinement) and 354 (using criminal force on woman with intent to outrage her modesty) of the IPC. He was also booked under the Bonded Labour Abolition Act.
When the accused was produced before newspersons, he claimed to have done nothing wrong and pointed out that Babulal had "mortgaged" the two girls to him since the interest on the loan was increasing.
"The parents said they were not in a position to repay the loan. So I was asked to keep the children with me till then," Jehangir said.
About the charge of having sexually abused Meena, he alleged that both the girls were telling lies. Jehangir averred that he had "looked after them like my own children."
Despite his protestations of innocence, the accused was remanded in judicial custody on Friday.