K. P. BABULAL v. SUB-DIVISIONAL MAGISTRATE, CHIKBALLAPUR
1977-03-31
BHEMIAH, MADHUGIRI
body1977
DigiLaw.ai
( 1 ) IN this writ petition under Article 226 of the Constitution, the petitioner has sought for the issue of a writ of certiorari or any other appropriate writ or direction declaring that the action of the respondent in sealing the two iron safes of the petitioner in his shop premises on 21-1-1977 was illegal, unauthorised and vid contravening the orders granted by this court in WP. 5840 of 1975 and also for the issue of a writ of mandamus directing the respondent to remove the seals of the two iron safes kept in the shop premises and to hand over the keys and the articles to the petitioner forthwith. ( 2 ) THE petitioner's case is that he is a licensed pawn-broker carrying on the business of pawn-broking in accordance with the provisions of the karnataka Pawn Brokers Act, 1961 and the Karnataka Money Lenders Act, 1961. In Octr, 1975, the Karnataka Debt Relief Ordinance was promulgated whereby certain debts of the debtors as defined in the Ordinance came to be extinguished. Aggrieved by this Ordinance, the petitioner filed a writ petition in WP. 5840 of 1975 along with various other pawn-brokers. The petitioner is at serial No. 131. Subsequently the Karnataka Debt Relief ordinance was repealed by Karnataka Debt Relief Act of 1976. In that writ petition this Hon'ble Court had stayed the operation of the Ordinance and later the Act, subject to certain conditions. Further, this Court ordered that the provisions of the Karnataka Debt Relief Act, shall not be enforced against the petitioners pending disposal of the petition subject to four conditions.
In that writ petition this Hon'ble Court had stayed the operation of the Ordinance and later the Act, subject to certain conditions. Further, this Court ordered that the provisions of the Karnataka Debt Relief Act, shall not be enforced against the petitioners pending disposal of the petition subject to four conditions. The conditions imposed were : (1) The petitioners shall file an inventory of the pledged articles containing the particulars of the pledged articles, the names and addresses of persons who have pledged them,, the amount lent and the balance due in respect of each transaction with the concerned Sub Divisional Magistrate within two weeks; (2) Subject to condition No. 4 mentioned below the petitioners, shall not sell or dispose of in any other way the articles pledged until further orders; (3) Proceedings instituted by the petitioners in any Court against the debtors defined under the Ordinance shall stand stayed; and (4) If any debtors as defined in the Ordinance of the petitioners wish 'to redeem any pledged article during the pendency of the petition, it shall be returned to them on their depositing the balance of the debts due with the Sub Divisional Magistrate concerned and the amount so deposited shall be dealt with in accordance with the orders to be passed in the writ petition. ( 3 ) THE petitioner furnished the inventory within the time stipulated. His case is that in accordance with condition No. 2, he had not sold or disposed of in any other way the articles pledged with him. No debtor as defined under the Act had approached the respondent and claimed the release or redemption of the pledged articles by depositing any amount with the respondent in order to secure the release of the pledged articles after the above quoted stay order was passed. His case is, in fact that the articles pledged with the petitioner are by those persons who do not fall within the definition of 'debtor' under the Karnataka Debt Relief Act, 1976 (to be hereinafter called the KDR Act ). Subsequent to the stay order in wp. 5840 of 1975 several pawnors approached the petitioner and demanded for redemption of the pledged articles by them under the provisions of the karnataka Pawn Brokers Act, 1961 (to be hereinafter called the 'act' ).
Subsequent to the stay order in wp. 5840 of 1975 several pawnors approached the petitioner and demanded for redemption of the pledged articles by them under the provisions of the karnataka Pawn Brokers Act, 1961 (to be hereinafter called the 'act' ). When the petitioner brought to their notice the terms of the stay granted by this Court in WP. 5840 of 1975 the pawnors made representation to him that were not debtors coming within the definition of the KDR Act. They gave a declaration to that effect and pressed the petitioner to receive the amount and return the articles pledged on the ground that they have every right to claim redemption of the pledged articles without approaching the respondent and get a clearance from him. The petitioner was compelled and threatened by not only the pawnors but important persons in the town saying that they would forcibly seize the articles if he failed to return the same. In these circumstances, the petitioner approached the respondent and acquainted him in or about March 1976 about this aspect of the matter and the respondent orally stated that there is no bar whatsoever to return the articles to those persons who do not come within the purview of the act. In these circumstances, the petitioner released 1041 articles out of 1817 articles shown in the inventory and there remained in his, possession 776 articles. In the course of his business 97 articles were pledged. He had kept in all 876 pledged articles in two iron safes in his shop premises. ( 4 ) ON 21-1-1977 the respondent came to his shop with revenue officials for the alleged purpose of verifying the inventory and forcibly searched and seized those articles under mahazar Ext. 'b', locked and sealed the two iron safes and took-away the keys after recording the petitioner's statement at Ext. 'c'. The petitioner's case is that the respondent has taken drastic action in sealing the two iron safes of his in utter defiance of the order of stay passed by this Court in WP. 5840 of 1975. in which it was ordered 'that the KDR Act, shall not be enforced against the petitioner. Since the respondent has not chosen to open the seals of the iron safes and deliver possession of the pledged articles, he has approached this Court for the reliefs.
5840 of 1975. in which it was ordered 'that the KDR Act, shall not be enforced against the petitioner. Since the respondent has not chosen to open the seals of the iron safes and deliver possession of the pledged articles, he has approached this Court for the reliefs. ( 5 ) THE respondent has filed his statement of objections and has inter aim pleaded that he received oral complaint to the effect that the petitioner was disposing of the pledged articles without complying with condition No. 4 of the interim order granted by this Court in WP. 5840 of 1975. He proceeded with the revenue officials to verify the pledged articles kept with the petitioner with reference to inventory filed by him. On verification it was found that the petitioner had disposed of 1041 pledged articles leaving only 776 pledged articles as against 1817 pledged articles as per the original inventory and he also found 97 pledged articles in excess. He recorded the statement of the petitioner since there was violation of the 4th condition of the interim order passed by this Court and he acted under sub-sec (9) of S. 5 of the KDR Act, sealed the two iron safes by locking and retained the keys with him. Further, it is pleaded that so long as the writ petition is not disposed of and so long as the debtors do not approach him for releasing the pledged articles by depositing the amount due as per condition no. 4 the pledged articles are not liable to be disposed of by the petitioner and, therefore, there is no harm in locking and sealing 'the two iron safes where the pledged articles had been kept. It is further submitted that in the interest of the enforcement of the Act, as well as to safe-guard the interest of the debtors in terms of the interim order, there was no need to remove the seals of the two iron safes, much less, to hand over to the petitioner. He has denied that his action is mala fide and high handed. ( 6 ) THE questions which arise for decision are : (1) Whether the provisions of the KDR Act, 1976 apply to all pledged articles by debtors or only to articles pledged by debtors as defined in the kdr Act.
He has denied that his action is mala fide and high handed. ( 6 ) THE questions which arise for decision are : (1) Whether the provisions of the KDR Act, 1976 apply to all pledged articles by debtors or only to articles pledged by debtors as defined in the kdr Act. (2) Whether the petitioner on payment of principal and interest is liable to release under the Karnataka Pawn Brokers Act, 1961 the pledged articles by Pawnors who do not come within the definition of debtor as defined in the KDR Act, in the event of demand for redemption of articles pledged by them. (3) Whether such redemption of pledged articles would fall within the conditions imposed by the interim order passed by this Court in Writ petition 5840 of 1975. (4) Whether the articles pledged by the debtors after the date of commencement of the KDR Act, would fall within the purview of the said Act. (5) During the subsistence of the interim order parsed by this Court in WP. 5840 of 1975 whether the respondent is competent to enforce' the provisions of the KDE Act, against the petitioner and seize and seal the iron safes containing pledged articles in the petitioner's shop. Before determination of these questions, it is necessary to bear-in-mind the relevant provisions of the KDR Act and the Act. Section 3 (c) of the KDR Act, defines the word 'debtor' thus :" 'debtor' means- (i) a small farmer; or (ii) a landless agricultural labourer; or (iii) a person belonging to the weaker sections of the people; (d) "landless agricultural labourer" means a person who does not hold any land and whose principal means of livelihood is manual labour on land; (e) 'small farmer' means a person who holds whether as owner, tenanit, or mortgagee with possession or partly in one capacity and partly in another not more than one unit of land and who has no income from any source other than agriculture. (f ). . . . . . . . . . . (g) 'weaker sections of the people' means persons not being small farmers or landless agricultural labourers, whose annual income from all sources does not exceed two thousand and four hundred rupees". ( 7 ) SECTION 4, defines 'relief from indebtedness'.
(f ). . . . . . . . . . . (g) 'weaker sections of the people' means persons not being small farmers or landless agricultural labourers, whose annual income from all sources does not exceed two thousand and four hundred rupees". ( 7 ) SECTION 4, defines 'relief from indebtedness'. It reads thus :"notwithstanding anything in any law for the time being in force or in any contract or instrument having force by viritue of any such law and save as otherwise expressly provided in this Act, with effect from the date of commencement of this section.- (a) Every debt advanced before the commencement of this section including the amount of interest, if any, payable by the debtor to the creditor shall be deemed to be wholly discharged: (b) * * * * (c) * * * * (d) * * * * (e) Every movable property pledged by a debtor shall stand released in favour of such debtor and the creditor shall be bound to return the same to the debtor forthwith and where the creditor fails to do So the debtor shall on application made to the Sub Divisional Magistrate having jurisdiction over the place where the debtor resides be entitled to the return of the same: " ( 8 ) SEC. 5, requires the creditors to file statement etc. S-5 (1) reads thus :" Every creditor referred to in cl (e) of S. 4 shall, within forty-five days from the 11th day of Novr, 1975 furnish to the Sub Divisional magistrate having jurisdiction over the area where such creditor has his ordinary place of business, a statement containing the names of all the debtors who have pledged articles with him, the nature and description of the articles pledged, the amount advanced and due as on 21st Octr, 1975 and such other particulars as may be prescribed. (2) On receipt of such statement and after such summary inquiry conducted in the manner provided in the Karnataka Land Revenue Act, 1964 as he considers necessary, the Sub Divisional Magistrate shall, by order, determine which of the debtors are entitled to relief under s. 4 and direct the creditor to produce on or before the date specified in the order the articles pledged by such debtors.
(3) If the creditor fails to produce the article as directed in the order under sub-sec (2), the Sub Divisional Magistrate may recover possession of the articles from the creditor and for this purpose shall exercise the same powers as are invested in him under the Code of criminal Procedure, 1973 regarding search and seizure. (4) After such production or recovery of the articles pledged, the sub Divisional Magistrate shall deliver the article to the debtor. (5) to (8) * * * (9) Notwithstanding anything in the preceding sub-section the Sub divisional Magistrate may, on application made by a debtor or otherwise, enter any premises of the creditor and search and seize articles pledged by debtors and arrange for their safe custody. Thereafter he shall proceed 'to determine which of the articles so seized, are to be released to the debtors and pass orders accordingly. " ( 9 ) SECTION 7, deals with burden of proof. Tt reads thus :" Notwithstanding anything in any law, in any suit or proceeding, the burden of proving that the debtor is not entitled to protection of this Act shall lie on the creditor. "a careful reading of the provisions of the KDR Act, reveals that relief from indebtedness is intended by legislature to be given to small farmers landless agricultural labourers and weaker sections in the State of Karnataka. It was never intended to give relief to the debtors who do not come within the definition of 'debtor' as defined in the KDR Act. The other provisions quoted above clearly reveal the entire scheme of the KDR Act and the limits within which a Sub Divisional Magistrate has to exercise his jurisdiction with reference to pledged articles by the debtors under the kdr Act. Particular reference to sections quoted above will be referred to presently in appropriate context. Section 4 of the KDR Act, which begins with a non-substantive clause limits the application of any law for the time being in force or any contract or instrument having the force by virtue of any law save or as otherwise provided in this Act. the application of such law, contract or instrument.
Section 4 of the KDR Act, which begins with a non-substantive clause limits the application of any law for the time being in force or any contract or instrument having the force by virtue of any law save or as otherwise provided in this Act. the application of such law, contract or instrument. The limitation of the application of such law, contract or instrument is referable only to the debtors who come within the purview of the definition of the 'debtor' in the KDR Act, viz, a small farmer, landless agricultural labourers and weaker sections of the people in the State of karnataka. ( 10 ) THE debtors who do not come within the purview of the KDR Act are governed by the provisions of the Mysore (Karnataka) Pawn Brokers Act, 1961 and the Rules of 1964 framed thereunder. The business of the Pawnbroker and the Pawnor is regulated by the said Act and the Rules, and not by the KDR Act, section 2 (7) defines 'pawn-broker'. It reads thus :" 2 (7) 'pa,wn-broker' means a person who carries on the business of taking goods and chattels in pawn for a loan; " section 2 (8) defines 'pawnor' thus : " Pawnor means a person delivering an article for pawn to a pawn-broker; " section 2 (9) defines 'pledge' thus : " Pledge means an article pawned with a pawn-broker; " section 7 deals with 'pawn-ticket' to be given to pawnor. It reads thus : " Every pawn-broker shall on taking a pledge in pawn give to the pawner ticket in the prescribed form signed by the pawnor and the pawn-broker, and shall not take a pledge in pawn unless the pawn ticket. "section 8, deals with redemption of the pledge. It reads thus :" 8 (1) the holder for the time being of a pawn-ticket shall be presumed to be the person entitled to redeem the pledge, and subject to the provisions of this Act, every pawn-broker shall on payment of the principal and interest, deliver the pledge to the person producing the pawn-ticket, and he is hereby indemnified for so doing. (2) Except as otherwise expressly provided in this Act, a pawnbroker shall not be bound to deliver back a pledge unless the pawnticket for it is delivered to him. " (underlining it allss is mine ). Section 11,, deals with 'redemption of pledge'.
(2) Except as otherwise expressly provided in this Act, a pawnbroker shall not be bound to deliver back a pledge unless the pawnticket for it is delivered to him. " (underlining it allss is mine ). Section 11,, deals with 'redemption of pledge'. It reads : (1) Every pledge shall be redeemable within one year from the day of pawning exclusive of that day; and there shall be added to that year of re-demption fifteen days of grace within which every pledge (if not redeemed within the period of redemption) shall continue to be redeemable. (2) * * * * (3) A pledge pawned for a sum exceeding ten rupees shall further continue to be redeemable until it is disposed of as provided in this Act, although the period of redemption and days of grace have expired. "sec. 12, deals with sale of pledge and inspection of sale book. It reads thus. " (1) A pledge pawned for a sura exceeding ten rupees shall, when disposed of by pawn-broker, be disposed Of by sale by auction and not otherwise, and the sale shall be conducted in accordance with such rules as may be prescribed. (2) A pawn-broker may bid for and purchase at a sale. . . . . . . "rule 20 of the Mysore (Karnataka) Pawn Brokers Rules, 1966 (to be hereinafter called the 'rule'), lays down the procedure in auction sale. ( 11 ) THE procedure is that the sale shall be conducted by an auctioneer approved by the licencing Authority or from the Inspector of Money Lenders and the Pawn-brokers. It also lays down the procedure to be followed by an auctioneer. The provisions of the Karnataka Pawn-brokers Act, excerpted above, makes it clear that the pawn-broker shall on taking pledge in pawn give to the pawnor ticket in the prescribed form signed by the pawnor and the pawn-broker. Further, the holder of a pawn-ticket is presumed to be the person entitled to redeem the pledge and every pawn-broker shall on payment of the principal and interest, deliver the pledge to the person producing the pawn-ticket. A pledge becomes redeemable within one year plus fifteen days of grace, and a pledge pawned for a sum exceeding ten rupees shall further continue to be redeemable.
A pledge becomes redeemable within one year plus fifteen days of grace, and a pledge pawned for a sum exceeding ten rupees shall further continue to be redeemable. A pledge pawned for a sum exceeding rupees ten shall be disposed of by sale by auction and not otherwise conducted by an auctioneer following the procedure laid down in the Rules. This is the only mode of disposal prescribed in the Act and there is no other mode recognized under the Act. Under S. 8 (1) of the Act, as of right the holder of the pawn-ticket is entitled to redeem the pledge. It is mandatory that the pawn-broker shall on payment of the principal and interest deliver the pledge to the person producing the pawn-ticket. Mr. J. Jestmal, learned Advocate for the petitioner firstly contended that the petitioner who is a pawn-broker, in law is bound to release the pledge article which did not fall within the purview of the KDR Act on payment of principal and interest. Secondly, he contended that the release of the pldged article by the petitioner on redemption by the pawnors did not amount to disposal within the meaning of disposal as laid down in S. 11 of the Act. Thirdly, he contended that the action of the respondent is illegal, arbitrary and in utter disregard and contempt of the interim order passed by this Court. Lastly he contended that when the pawners approached the petitioner and admitted before him that they are not debtors within the meaning of the KDR Act and threatened him with dire consequences, the petitioner was compelled to release 1041 pledged articles on payment of principal and interest and he has not disobeyed any condition imposed by this Court in the interim order. ( 12 ) THE contention on behalf of the respondent is that since the petitioner was disposing of the pledged articles without complying with condition no. 4 of the interim order, the respondent was compelled to take action as required by the provisions of sub-clause (9) of S. 5 of the KDR Act. It is urged that the respondent was within the limits of the law in searching and seizing the two iron safes in order to secure proper custody and protection of the pledged articles.
4 of the interim order, the respondent was compelled to take action as required by the provisions of sub-clause (9) of S. 5 of the KDR Act. It is urged that the respondent was within the limits of the law in searching and seizing the two iron safes in order to secure proper custody and protection of the pledged articles. It is significant to note that in the statement of objection filed by the respondent, nowhere it is stated that the articles found in the inventory filed by the petitioner were articles pledged by the debtors within the meaning of the 'debtor' in the KDR Act. ( 13 ) IT is merely stated that 1817 articles found in the inventory were pledged articles. It cannot be disputed that articles pledged by the debtors under the KDR Act and articles pledged by the pawners under the Act, are designated as pledged articles. The distinction between the two is that in the former the articles must be pledged by the debtors as defined in the kdr Act and in the latter it must be pledged by pawnors as defined in the Act. Therefore, it is necessary to determine whether the action taken by the respondent in seizing and sealing the two iron safes containing pledged articles on the information that the petitioner disposed of some of the pledged articles in violation of 4th condition of the interim order is valid and legal. ( 14 ) AT the cutset, it may be stated that when this Court in WP. 5840/1975 directed that the KDR Act shall not be enforced pending decision in the said writ petition, the claim of the respondent that he seized and sealed the two iron safes containing pledged articles by invoking the powers under s. 5 (9) of the KDR Act cannot be said to be valid or legal, as he acted in violation of the terms of the interim order passed by this Court. The petitioner in para-7 of his petition has stated that the respondent in utter disregard and contempt of the orders passed by this Court in WP 5840/1975 and in gross abuse of his powers went on with the search and sealed the two iron safes in the petitioner's shop. There is no specific denial of the allegation of violation of the interim order in the statement of objection filed on behalf of the respondent.
There is no specific denial of the allegation of violation of the interim order in the statement of objection filed on behalf of the respondent. On the otherhand, what is asserted by the respondent is that since the petitioner disobeyed the conditions of the interim order he was obliged to take action against the petitioner under S. 5 (9) of the KDR Act, which was rendered unenforceable by the interim order. It may be noted that the respondent has ignored that he is a party to the proceedings in WP. 5840/1975. He was aware that the Court directed that the KDR Act, shall not be enforced against the petitioner by the respondent pending disposal of WP. 5840/1975. Inspite of it, respondent has enforced the provisions of the KDR Act against the petitioner. But the explanation of the learned Government Pleader is that the respondent took action after he received information about the alleged violation of condition No. 4 of the Interim Order. This explanation cannot be accepted. The respondent being a party to the writ proceedings in WP. 5840/1975 should have brought to the notice of the Court any violation of the conditions imposed in the interim order in an appropriate manner and should : have sought for directions to the petitioner. The action of the respondent in searching, seizing and sealing the two iron safes containing the pledged articles on 21-1-1977 is invalid, illegal and it tantamounts to disobedience of the direction given by this Court that the KDR Act shall not be enforced against the petitioner pending disposal of the writ petition. ( 15 ) NOW turning to the contention of the learned Govt Pleader that the respondent acted in exercising his powers under S. 5 (9) of the KDR Act, it may be stated that it is devoid of force. This Court in K. A. Aswathanarayana setty v. Sub Divl Magistrate, Madhugiri, (1977) 1 Karlj. 14 . while dealing with the exercising of power by the Sub-Divl Magistrate, under Ss. 4 (e) and 5 (9) of the KDR Act, observed thus :" It is important therefore to note that under S. 4 (e) of the Act, moveable property pledged by the debtor alone stands released in his favour and those articles alone are to be returned by the Sub Divl magistrate to the debtor. . . . . . . . . .
. . . . . . . . . From a reading of the provisions of ss. 4 (e) and 5 (9) of the Act, it is clear that moveable property pledged by a debtor stands released and the Sub Divl Magistrate is empowered to enter any premises of the creditor and search and seize the articles pledged by the debtor. The Sub Divl Magistrate has no jurisdiction to search and seize articles which are not pledged by the debtors. The Sub Divl Magistrate may act u sub-sec (9)of S. 5 of the Act, on the application made by debtor or on information or intelligence or on belief that the articles pledged by the debtors are in the possession of creditors. Since tremendous power has been conferred under the provision of sub-sec (9) of S. 5 of the Act, on the Sub Divl Magistrate, there must be strict compliance of these provisions and only articles pledged by the debtors along are liable for seizure from the house of a creditor. Seizure of 'articles first and then determine which are the articles pledged by debtors is not the intendment of provision of sub- sec (9) of S. 5 of the Act. Such a course is beset with the danger of seizure of articles which are of the ownership of a person. The law is to seize articles pledged by debtors and then determine which of the articles so seized are to be released to debtors and pass orders accordingly. Seizure of articles which are not pledged by the debtors amounts to arbitrary seizure and such a seizure is unauthorised by law. He has no jurisdiction to lay his hands on all articles, except the articles pledged by a debtor. Therefore, before exercising the powers under sub-sec (9) of S. 5 of the Act, the Sub Div] Magistrate must make sure whether the articles seized came within the meaning of S. 4 (e) of the Act, and to do so, he must have the knowledge of the description of the articles pledged. . . . . . . . . Under sub-sec (9) of S. 5 of the Act, the seizure of articles otherwise than an application may be on the credible information or intelligence or report or belief got or entertained by the 1st respondent.
. . . . . . . . Under sub-sec (9) of S. 5 of the Act, the seizure of articles otherwise than an application may be on the credible information or intelligence or report or belief got or entertained by the 1st respondent. There is nothing on record in these cases to show that the 1st respondent had reduced to writing such information, intelligence or report giving the description of the articles pledged by the debtors and which were in the possession of these petitioners. Otherwise there is very likelihood of indiscriminate and arbitrary seizure of moveable property of the so called creditors. ( 16 ) ALTHOUGH in sub-sec (7) of S. 5 of the Act, the Act, shows that the order of the 1st respondent is final, the proceedings instituted by him under the Act are subject to the writ jurisdiction of this Court under arts. 226 and 227 of the Constitution of India. Therefore, there must be some record to show that on what information, intelligence or belief, the 1st respondent proceeded to take action against the petitioner and to see whether the articles pledged by the debtors tally with the articles actually seized from the petitioners. Therefore, it is not possible to say that most of the articles seized in these cases are articles pledged by debtors. " ( 17 ) IN the instant case, it is submitted by the respondent that on information that the petitioner is disposing of the articles shown in the inventory in contravention of the 4th condition in the interim order passed by this court he went and searched and sealed the two iron safes containing pledged articles. The learned Govt Pleader is not able to show that any such information is recorded in writing by the respondent. Although the interim order was passed on 17-11-1975 till today no debtor as defined under the kdr Act has approached the respondent seeking release of the articles pledged by him. Nor any application has been filed before him. When asked by the Court the learned Govt Pleader was not in a position to produce any record, information or application by any debtor in this regard.
Nor any application has been filed before him. When asked by the Court the learned Govt Pleader was not in a position to produce any record, information or application by any debtor in this regard. But the learned Govt Pleader contended that the inventory filed by the petitioner is in accordance with S. 5 (1) of the KDR Act, and therefore, he urged that the articles enumerated and described in the inventory filed by the petitioner are the pledged articles by the debtors and thus tried to justify the action of the respondent under S. 5 (9) of the KDR Act. This contention cannot be accepted. ( 18 ) THE 1st condition in the interim order in WP. 5840/1975 reads thus :" The petitioner shall file an inventory of the pledged articles containing the particulars of the pledged articles, I he names and addresses of persons who have pledged them, the amount lent and the balance due in respect of each transaction with the concerned Sub Divisional magistrate within two weeks. " ( 19 ) THIS condition does not say that the petitioner was required to file an inventory of the pledged articles by the debtors as defined in the KDR Act. It merely directed the petitioner to give the particulars of pledged articles names and addresses of persons who pledged them. Those persons need not necessarily be debtors within the purview of ,the KDR Act. Only condition No. 4 refers to debtors as defined in the Ordiance, which has now become KDR Act. Therefore, the contention of the learned govt Pleader that the names of persons found in the inventory are debtors within the meaning of the KDR Act, is a misconception of the meaning of condition No. 2. Therefore, in the absence of any record to show the information, intelligence or belief that these were pledged articles by debtor, the action taken by the respondent as laid down by this Court is illegal and invalid in law. ( 20 ) NOW turning to the question whether the petitioner was liable to release the pledged articles on demand for redemption by the pawnors and on payment of principal and interest, it may be stated that the pawnor is entitled to demand redemption on such payment and the petitioner is liable to release the pledged article, provided those pawnors are not debtors' as defined in the KDR Act.
( 21 ) THE petitioner has filed affidavits of number of persons who have admitted that they are not debtors within the meaning of 'debtor' under the KDR Act. Some of them have even sent legal notices to the respondent intimating him that they are not 'debtors' falling within the scope of the KDR Act. Under S. 7 of the KDR Act, the burden of proof that the debtor is not entitled to protection under the KDR Act is cast on the creditor. It is. the case of the petitioner that he released 1041 pledged articles on demand for redemption by the pawnors on their own admission tha, they were not debtors under the KDR Act. He has averred in his writ petition that he approached the respondent and acquainted him of the fact that the pawnors are asking for the redemption of their pledged articles on the ground that they were not debtors within meaning of the KDR Act. It appears that the respondent has orally stated that there is no bar whatsoever to return the articles to those persons who do not come within the purview of the said Act. The respondent has not specifically denied the averment made by the petitioner in the course of the writ petition. Therefore, the petitioner's case is that on a reasonable and bona fide belief he acted upon the representation made by the pawnors and also after taking the legal advice released the articles on redemption by the pawnors and on payment of principal and interest. As already stated, under S. 8 (1) of the Act, the petitioner who is a pawn-broker is legally bound to deliver the pledge article on payment of principal and interest to the pawnors who are entitled to redeem the pledge and such a redemption cannot be construed as disposal. There is clear distinction between redemption and disposal of the pledge under the Act. On redemption the pledge reaches the hand of the holder of pawn-ticket and by disposal the pledge goes beyond the reach of the pawnor who is in possession of the pawn-ticket. The learned Govt Pleader, contended that release of the articles to the pawnors whose names were found in the inventory amounted to disposal of the pledged articles in contravention of condition No. 2 of the interim order passed in WP.
The learned Govt Pleader, contended that release of the articles to the pawnors whose names were found in the inventory amounted to disposal of the pledged articles in contravention of condition No. 2 of the interim order passed in WP. 5840 of 1975 and, therefore, he urged that the petitioner has disobeyed the condition imposed in the interim order passed by this Court. Condition NO. 2 reads :" Subject lo condition No. 4 mentioned below the petitioner shall not sell or dispose of in any other way the articles pledged until further orders. " ( 22 ) THE above condition does not prohibit redemption of pledged articles to the pawnors who are not debtors within the meaning of the KDR Act, as required under S. 8 (1) of the Act. It may be remembered that in WP 5840/1975 the constitutionality of the KDR Act was challenged. So, the reference to the pledged articles in the said writ petition is referrable only to the articles pledged by the debtors within the meaning of the KDR act. Therefore, it is not possible to accept the contention of the learned govt Pleader that it is a case of disposal of 1041 articles in contravention of the 2nd condition imposed in the interim order passed by this Court, especially when the pawnors represented to the petitioner that they were not debtors within the meaning of the KDR Act. But, it is a case of redemption of pledged articles by the pawnors within the meaning of S. 8 (1) of the Act. Therefore, the delivery of 10-11 pledged articles by the petitioner on redemption is not in contravention of the 4th condition imposed by the interim order in WP. 5840 of 1975. ( 23 ) THE last question that remains for determination is whether the articles pledged by the debtors after the date of commencement of the KDR Act would fall within the purview of the said Act. In answer to this question, reference may be made to S. 4 (a) which says that every debt advanced before the commencement of this sction including the amount of interest, if any, payable by the debtor to the creditors shall be deemed to be wholly discharged. This section grants relief from indebtedness to every debt advanced before the commencement of S. 4. Therefore, the provisions of the KDR Act.
This section grants relief from indebtedness to every debt advanced before the commencement of S. 4. Therefore, the provisions of the KDR Act. are not attracted to articles pledged by debtors after the commencement of S. 4. S. 4 of the Act is deemed to have come into force on 21-10-1975. Therefore, the articles pledged after that date, in my opinion, do not fall within the purview of the KDR Act. ( 24 ) IT is not in dispute that 97 articles found in the possession of the petitioner when the respondent searched and sealed the two iron safes were pledged after the Ordinance came into force. This is clear from the mahazars ext. 'b' and the statement of the petitioner at Ext. 'c', in which the petitioner has stated that those articles were pledged with him by the pawnors after he sent the inventory as required under condition No. ,1, imposed on him by the interim order. Therefore, redemption and delivery of those articles are governed by the Act and not by the KDR Act. Before parting with this case, I am constrained to deal with the complaint made by the petitioner against the respondent. It is alleged that the respondent behaved very rudely and harassed the petitioner without allowing him even to have his food throughout the day. This has been denied by the respondent. Without going into the truth or otherwise of this complaint, it is necessary to observe that the Sub Divl Magistrates, who are required to enforce the KDR Act, would do so by avoiding harassment, scare and intimidation. They are required to discriminate between pledged articles by the debtors and the pledges, which are governed by the act. It is true that some of the pawn-brokers and money-lenders have incurred the displeasure of the people by collecting interest which exceeded the principal and the principal remain undischarged. Such a reputation of some of them should not goad the authorities enforcing the KDR Act, to indiscriminately deal with them. We should remember that they perform the function of a Bank in the economic play of the community. All care should be taken to get relief under the KDR Act, only to those to whom the relief was intended by the legislalure KDR Act should not become an instrument of exploitation by the debtors, who do not fall within the scope of the KDR Act.
All care should be taken to get relief under the KDR Act, only to those to whom the relief was intended by the legislalure KDR Act should not become an instrument of exploitation by the debtors, who do not fall within the scope of the KDR Act. ( 25 ) FOR the reasons stated above, the action of the respondent in sealing the two iron safes containing pledged articles of the petitioner in his shop premises on 21-1-1977 as per Ext. 'b', is declared as void, illegal ard unauthorised and is not in conformity with the interim order passed by this Court in WP. 5840 of 1975. Therefore, a writ of mandamus is issued to the respondent directing him to remove the seals of the two iron safes kept in the shop of the petitioner and handover the keys and the articles to the petitioner forthwith. In the result, writ petition is allowed. No costs. --- *** --- .