C. P. Jain, Pawn Broker v. Syed Hifzur Rahman Biyabani S/o. Syed Ataul Rahman Biyabani
2021-02-05
N.KIRUBAKARAN, P.D.AUDIKESAVALU
body2021
DigiLaw.ai
JUDGMENT : N. KIRUBAKARAN.J., 1. The Appeal has been preferred by the pawnbrokers, who got the jewels from the insolvent aggrieved over the order passed by the Learned Single Judge on 09.10.2020 directing the Appellants to redeem the jewels from Catholic and Syrian Bank and hand over the same to the Official Assignee. 2. Heard Mr. K.P.Gopalakrishnan, Learned Counsel representing Mr. M.Aravind Kumar Learned Counsel for the Appellants and Mr. Vasantha Kumar, Learned Official Assignee and perused the materials placed on record, apart from the pleadings of the parties. 3. It is evident that the First Respondent got jewels from general public, stating that he will not charge any interest for the jewels pledged with him. Believing the representation made by the First Respondent, many persons had pledged the jewels and took loan from the First Respondent. In turn, the First Respondent re-pledged the jewels with the Appellants and similarly placed persons and got money. 4. The First Respondent was unable to repay the money to the persons, who pledged their jewels with him. Therefore, he filed voluntary Insolvency Petition before this Court and got himself adjudicated as an Insolvent in Insolvency Petition No. 11 of 2019 by 29.04.2019. Since the jewels were re-pledged by the First Respondent with the Appellants, they were impleaded as parties to the proceeding. After hearing the Appellants, the Learned Single Judge taking note of the jewels re-pledged with the Appellants, who in turn had pledged the same with the Catholic and Syrian Bank, directed the Appellants to redeem and hand over the jewels to the Official Assignee and get money like any other creditor. 5. According to Mr. K.P.Gopalakrishnan, Learned Counsel for the Appellants, there is no prohibition under the Tamil Nadu Pawnbrokers Act, 1943 (hereinafter referred to as 'the Act' for short) for re-pledging the jewels with any other person to get money. In the absence of any prohibition, the act of the Appellants cannot be questioned and cannot be termed as unlawful. He would submit that he is prejudiced by the order dated 09.10.2020 as the appellants have to redeem the jewels and pay the money to the Official Assignee and thereafter, wait for his turn to get the money.
In the absence of any prohibition, the act of the Appellants cannot be questioned and cannot be termed as unlawful. He would submit that he is prejudiced by the order dated 09.10.2020 as the appellants have to redeem the jewels and pay the money to the Official Assignee and thereafter, wait for his turn to get the money. Both ways, they have sustained loss because they have already paid to the First Respondent and for redeeming also they have to pay money and therefore, the order dated 09.10.2020 has to be set aside, he would submit. 6. However, Mr. Vasantha Kumar, Learned Official Assignee would submit that there is a prohibition under the Act, especially, under Sections 10(A) and 10(B)-3(ii) of the Tamil Nadu Pawnbrokers Act, 1943 as the provisions make it compulsory that the pawnbrokers have to keep the pledged jewels only in the licensed premises whereas the Appellants have re-pledged the jewels with the Catholic and Syrian Bank, which is unlawful. Therefore, the order passed by the Learned Single Judge is sustainable and the Appeal has to be dismissed. 7. The only point, which has to be decided in the Appeal is that whether the Appellants have got any right to re-pledge the jewels, which has been pledged by the First Respondent. 8. Sections 10-(A) and 10-(B)(3)(ii) of the Act are usefully extracted :- “10-A. Pawnbroker to keep pledge in his shop or place of business:- Every pawnbroker shall, ordinarily, keep every pledge in the shop or place of business for which the licence has been granted. If in any case, the pawnbroker keeps the pledge in any place other than such shop or place of business, he shall, within a period of seven days from the date on which the holder of a pawn-ticket intimates his desire to inspect the pledge concerned, produce such pledge at the shop or place of business aforesaid for such inspection. 10-B. Appointment of Inspectors and their powers:- (1) The State Government or any authority or officer empowered by them may, by notification appoint one or more persons to be Inspectors for the purposes of this Act and specify in such notification the local limits of their jurisdiction. (2) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (Central Act XLV of 1860).
(2) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (Central Act XLV of 1860). (3) (a) [A Judicial Magistrate of the first class or a Metropolitan Magistrate] may, on receiving a report from an Inspector or from any police officer not below the rant of Sub-Inspector that— (i) any person carries on business as a pawnbroker without a licence at any place within the jurisdiction of such Magistrate, or (ii) any pawnbroker carries on business in contravention of the provisions of this Act or the rules made thereunder or the conditions of the licence granted under this Act, at any place within the jurisdiction of such Magistrate, issue a warrant empowering the Inspector, or, as the case may be, such police officer to enter such place with such assistants as he considers necessary and inspect the books, accounts, records, files, documents, safes, vaults and pledges in such premises. On receiving such warrant, the Inspector or the police officer may enter the place and inspect the books, accounts, records, files documents, safes, vaults and pledges in such premises and may take to his office for further investigation such books, accounts, records, files and documents as he considers necessary.” Section 10(a) of the Act is very clear that the pawnbroker can keep every pledge in the shop or the place of business, for which the license has been granted. Though Mr. K.P.Gopalakrishnan, Learned Counsel for the Appellants would submit that there is no prohibition, by Section 10(a), impliedly, a prohibition has been made, i.e., the pledge should be placed only in the place of business and not in any other place. So, it is deemed as prohibition and therefore, the act of Appellants repledging the pledged jewels with the Catholic and Syrian Bank is unlawful and in violation of the Act. Therefore, the order passed by the Learned Single Judge is sustainable. Apart from directing the Appellants to redeem the pledged jewels and deposit the pledged jewels with the Official Assignee, the Appellants should also be enquired by the Investigating Officer. 9. It is stated by the Learned Counsel for the Appellants that the Appellants were called for enquiry by the Investigating Officer and the investigation is going on and the matter is being dealt with by the Learned Single Judge.
9. It is stated by the Learned Counsel for the Appellants that the Appellants were called for enquiry by the Investigating Officer and the investigation is going on and the matter is being dealt with by the Learned Single Judge. Therefore, the order under challenge does not suffer from any infirmity and the Appeal fails and the same is dismissed. Consequently, connected Miscellaneous Petition is closed. No costs.