(Prayer: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of CERTIORARIFIED MANDAMUS to call for the records pertaining to the impugned order passed by the 1st respondent in Na.Ka.663/2025/Aa2 dated 23.04.2025 and quash the same and consequently directing the 1st Respondent to ascertain the interest for the period from 16.04.2018 to till the date of realization in addition to the interest already ascertained in the impugned order and direct the 2nd Respondent to pay the entire principal and interest till the date of complete realization.)

Common Order

1. Two petitioners herein are the licensed pawn brokers. The second respondent is the pawnor. The writ petition challenges the order passed by the first respondent herein directing the petitioners to release 1675 grams of gold pawned by the second respondent on payment of Rs.48,09,591/-.

2. The undisputed facts of the case are that the second respondent pawned gold jewels weighing about 1667 grams with M/s. Meenal Bankers run by the first petitioner and 8 grams of gold with M/s. Shri Kumaran Bankers being operated by the second petitioner. On the basis of such pledges, the second respondent had availed loan facilities. As per the agreement, on payment of principal together with the interest, the petitioners had to return the jewels. The second respondent claimed that he attempted to redeem the pledged items from the writ petitioners. They were expressing reluctance in receiving the amounts and releasing the jewels.

3. While this situation was prevailing, he received lawyer’s notice from one Ganesan Chettiyar on 23.08.2011. Ganesan Chettiyar is none else than the husband of the first petitioner and the father of the second petitioner. It was claimed in the Advocate notice that as the second respondent had not paid the principal and interest, jewels were brought for auction and sold therein. Being shocked at this notice, the second respondent approached the Revenue Department, the appropriate authority under the Tamil Nadu Pawn Brokers Act, 1943 and the Rules made thereunder (hereinafter referred to as the “Act” and “Rules” respectively).

4. The concerned Revenue Divisional Officer conducted an enquiry and came to a conclusion that the case projected that the jewels pawned with the writ petitioners had been sold, for default in payment of the principal and interest, is a false narration. Consequently, he exercised the powers vested with him under the Act and Rules and suspended the licenses of both M/s.Meenal Bankers and M/s.Shri Kumaran Bankers.

5. Apart from that, the second respondent also initiated criminal proceedings against the writ petitioners herein. He lodged a complaint before the Nagudi Police Station, Pudukottai, claiming that when he demanded for redemption of jewels, he was attacked. As the Police did not entertain the complaint, he moved the learned Judicial Magistrate at Aranthangi and sought a direction under Section 156 of the Code of Criminal Procedure to register the case. A direction was issued by the learned Judicial Magistrate at Aranthangi. Subsequently, the Police registered an FIR and investigated the matter and filed a negative final report.

6. To complete the narration on the criminal proceedings, it should be added that a private complaint was lodged by the second respondent in C.C.No.23 of 2016. It was taken on file by the learned Judicial Magistrate at Aranthangi. Thereafter, one Balu @ Balasubramaniam moved this court in Crl.O.P(MD).No.21584 of 2022 seeking transfer of CC.No.23 of 2016 from the file of the learned Judicial Magistrate at Aranthangi to any other competent court in Thanjavur District. The allegation in the transfer petition was that the Presiding Officer at Aranthangi did not permit the petitioner therein, to cross examine PW1. Hence, the transfer petition. This court, without going into the merits of the case, in order to put an end to the proceedings, withdrew C.C.No.23 of 2016 from the file of the learned Judicial Magistrate, Aranthangi and transferred the same to the file of the learned Judicial Magistrate No.I at Pudukottai. A direction was also issued to the learned Magistrate No.I at Pudukottai to complete the proceedings within a period of two months from the date of receipt of the bundle from the learned Judicial Magistrate at Aranthangi. On transfer, the case was re-numbered as C.C.No.184 of 2013 on the file of the learned Judicial Magistrate No.I at Pudukottai. The case is yet to see the end of the trial.

7. Desperate to get his jewels back, the second respondent moved this court by way of a writ petition in W.P.(MD).No.1260 of 2013 seeking a direction to the Tahsildar, Aranthangi, Pudukottai District, to take appropriate action against the writ petitioners herein for violation of various provisions of the Act. When the matter was taken up for hearing on 17.11.2015, the learned Additional Government Pleader informed the court that an action had already been taken in October 2012 by the Tahsildar and therefore, the writ petition has become infructuous. Recording the same, the said writ petition was dismissed as infructuous.

8. Subsequently, the second respondent filed another writ petition in W.P.(MD).No.24882 of 2018 seeking a writ of Mandamus directing the Tahsildar to complete the enquiry in Na.Ka.No.6190/2018/A6 dated 21.08.2018 with regard to his right of redemption of jewels. This court passed an order on 24.01.2019 directing the Tahsildar to conduct an enquiry and complete the same within a period of three weeks. As the said respondent did not complete the enquiry, the second respondent initiated contempt proceedings in Cont.P(MD).No.701 of 2019. In the said proceedings, the Additional Government Pleader reported that the direction dated 24.01.2019 had been complied, albeit with some delay, by passing an order on 02.07.2019.

9. Yet again, the second respondent moved this Court. The order dated 02.07.2019 was put to challenge before this Court by way of another writ petition in W.P(MD).No.16181 of 2019. The second respondent herein, who is the petitioner therein, sought to quash the proceedings insofar as it relates to the interest portion alone and to direct the respondents 2 to 5 therein, namely, the petitioners herein, to return the pledged jewels without insisting the payment of interest. Rule Nisi was issued in the writ petition and the writ petition came up for disposal before this Court on 05.03.2025.

10. This court, after referring to the Tamil Nadu Pawn Brokers Act and the Rules made thereunder, came to a conclusion that the authority to pass an order, with regard to the redemption of jewels in Mofussil areas, is the Revenue Divisional Officer and only within the city of Chennai, the jurisdiction is vested with the Tahsildar and Personal Assistant (General) to the District Collector of Chennai. Consequently, the order passed by the Tahsildar was held to be ultra vires and was accordingly quashed. As the parties were already been litigating over a decade and above, a direction was given to the Revenue Divisional Officer, Aranthangi to take the petition filed by the second respondent herein on 20.06.2018 onto his file and to dispose of the same within a period of 45 days from the date of the order.

11. Subsequent to that order, the first respondent has passed the impugned proceedings directing the second respondent to pay a sum of Rs.48,09,591/- of which, principal being Rs.16,45,350/- and the interest being Rs.31,64,241/- and thereafter, redeem the jewels. It is this order which is being impugned in the present writ petition. This court entertained the writ petition and granted an interim order.

12. The second respondent, not being aware of this proceeding, initiated a contempt proceeding in Cont.P(MD).No.495 of 2025, alleging that the Revenue Divisional Officer had not complied with the order passed by this court in W.P.(MD).No.16181 of 2019 on 05.03.2025.

13. When the contempt petition came up for hearing, Mr.S.I.Muthiah, learned Government Advocate (Civil Side) brought to the notice of this court the pendency of the present writ petition and the interim order passed therein. As this court did not have the jurisdiction to deal with the writ petition, papers were placed before Hon’ble The Administrative Judge to place both the contempt petition and the writ petition before one learned Judge. The Hon’ble Administrative Judge directed the contempt petition and writ petition to be heard and decided by this court.

14. I heard Mr.A.Arul Jenifer for M/s.KBS Law Office for the petitioners and Mr.S.I.Muthiah, learned Government Advocate (Civil Side) for the first respondent and Mr.Mohamed Zamil for Mr.Ajmal Associates for the second respondent.

15. When the matter came up on 12.06.2026, after hearing both Mr.A.Arul Jenifer and Mr.Mohamed Zamil, since the petitioners are entitled to their monies (principal and interest) and the second respondent is entitled to his jewels in order to give a finality to the dispute which has reached this Court on several occasions, the second respondent was called upon to pay a sum of Rs.48,09,591/- together with an additional cost of Rs.2,00,000/-. He agreed to the same. Mr.Zamil stated that he will produce two demand drafts for Rs.25,00,000/- each in the name of each of the writ petitioners and sought time. Hence, the matter was listed on 18.06.2026.

16. On 18.06.2026, when both the contempt petition and the writ petition were taken up for hearing, Contp (MD) No. 495 of 2026 was closed by this court as the order, on the basis of which the contempt petition had been filed, had been kept in abeyance pursuant to the order dated 25.02.2026 passed in this writ petition, there was a reasonable cause for the first respondent for not initiating further steps.

17. Insofar as this writ petition is concerned, Mr.Zamil represented that it would take a couple of days more to produce the demand drafts, Mr.A.Arul Jenifer urged that he has been instructed by the writ petitioners to argue the case on merits rather than receiving a sum of Rs.50,00,000/-. Hence, the counsel argued the matter again.

18. Mr.A.Arul Jenifer does not question the right of the second respondent to redeem his jewels. His plea is that, while the principal amount that has been given is correct, the second respondent is liable to pay interest till date. According to him, if interest is not paid, it would lead to the financial ruin of the writ petitioners. It is the plea of Mr.A.Arul Jenifer that the impugned order suffers from a serious vice of not taking into consideration Section 21 of the Tamil Nadu Pawn Brokers Act, wherein it has been clearly stipulated that even in cases where license was cancelled, Pawn Brokers would be entitled for interest. Mr.A.Arul Jenifer has prayed for the writ petition to be allowed and for a consequential direction to the second respondent to pay interest till complete realisation be granted.

19. Mr.Mohamed Zamil argued that the second respondent had made a demand for refund of the jewels and as it had not been returned, he had lodged a complaint against the writ petitioners which resulted in their suspension. It was in those circumstances that the first respondent had calculated interest till April 2018. He states that the impugned order is unimpeachable and therefore, seeks for dismissal of the writ petition.

20. Mr.S.I.Muthiah supported the impugned order and stated that the first respondent will comply with any direction that could be given by this Court in this regard.

21. I have carefully considered the submissions on both sides and I have gone through the records.

22. The concept of money lending and pawning have been widespread in the State of Tamil Nadu. Prior to the Tamil Nadu Pawn Brokers Act of 1973, the law that governed the field was the general law of contract covered by the Indian Contract Act of 1872. The relationship between the pawnor (the debtor delivering the goods) and the pawnee (the lender receiving the goods as security) was categorised as bailment of goods. The sections, which dealt with their relationship, were Sections 172 to 179 of the Indian Contract Act.

23. The relationship being so governed, the ownership of the goods did not transfer to the pawnee. The pawnee only held “the special property interest”, while the ownership remained with the pawnor. The special property interest of the pawnee was the right to possess and retain the goods as security, till the debts were cleared. As the relationship was not statutorily governed but was within the realm of freedom of contract, there was no strict or formalised statutory limit on the maximum interest that the pawnee could charge. On account of the situation that prevailed, pawn brokers regularly charged high interest, targeting the vulnerable pawnors.

24. Taking advantage of Section 176 of the Indian Contract Act, if the pawnor defaulted in payment, the pawn broker would invoke the said provision and sell the pledged items claiming that he had given “reasonable notice of the sale” to the pawnor. There was no statutory requirement to have public auction through Government approved auctioneers or for maintenance of records. This led to a situation in which unredeemed items were sold privately by the pawn brokers, often without refunding the surplus amounts to the borrower, after adjusting the principal and interest due to the pawnee. Being a contractual situation, there was no restriction as to who could be a pawn broker. Therefore, anyone could act as a pawn broker. There was no administrative structure to supervise the transaction or to balance the interest of parties in case of events like fire. In order to balance the interest of pawnors and pawnees, the Tamil Nadu Pawn Brokers Act of 1943 (Tamil Nadu Act of 23 of 1943) was enacted. This legislation regulates and controls the business of Pawn Brokers in the State.

25. Let us now look at the manner in which the Act has been structured. The Act deals with all aspects of business of pawn brokering, right from the initial pledge till the disposal of the properties.

26. A licensing mechanism is enforced under the Act. A pawn broker cannot operate without an annual license issued by the jurisdictional Tahsildar. Each shop should take a license. The license is site specific. Running of multiple shops under a single licence is strictly prohibited. After obtaining a licence under Sections 3 & 4 of the Act, a pawn broker is called upon to exhibit the details under Section 5 of the Act. A rigid interest cap, taking note of the prevalent usurious rate of interest that has been charged, has been brought into place. When the legislation was originally brought in, fixed statutory schedules were placed. This was diluted by the Tamil Nadu Act 34 of 1979. By virtue of the amendment, the State Government was given the power to fix the rate of interest by issuance of notification in the Government Gazette.

27. Section 6 of the Act was further amended by the Tamil Nadu Act 51 of 1992 by inserting a proviso. This placed an embargo on the power of the State Government to fix interest by holding that the rate of interest that is to be fixed by the State under Section 6(1) cannot exceed 5% more than the current bank rate of lending as may be fixed by the Reserve Bank of India, from time to time. Under Section 7 of the Act, it is now mandated that every pawn broker, on taking a pledge in pawn, should give to the pawnor a pawn ticket in the prescribed form. The ticket should be in English and in the vernacular language. Section 8 of the Act places conditions that have to be followed while redeeming a pledge.

28. The lack of maintenance of records prior to 1943 has been set right were rectified by bringing in Section 10 of the Act, which calls upon the pawn broker to keep books and receipts. Under Section 10(1)(d), if the pawnor makes a requisition to the pawn broker in writing, it is the duty of the pawn broker to give a statement of account signed by himself or his agents, setting forth the details under Section 10(1)(a) and the amount of principal and interest payable. The only exception to this mandate is when a pass book is issued to the pawnor, containing up-to-date account of the transactions between the parties.

29. Under Section 10(4) of the Act, if a statement of account had been furnished to the pawnor under Section 10(1)(d) and the pawnor does not object to the said statement, such statement of account is deemed to have been admitted by the pawnor. In order to check the veracity of the records, under Section 10-B of the Act, the State is empowered to appoint inspectors to discharge functions under the Act. They also posses the power to enter the pawn shop and verify the books, accounts, records, files, documents, safes, vaults, and pledges of the pawn broker. In case they suspect that the business is not being carried out on in accordance with the Act and the Rules made thereunder, the Inspectors appointed under Section 10-B, can seize the records, books etc.

30. The Act also imposes a liability on the pawn broker to compensate the pawnor for depreciation or loss of the items. Section 10-A mandates that the pawn broker must keep all the pledged articles inside their licensed places of business. Pawn brokers are also prohibited from re-pledging the articles pawned to them to third parties or to deposit them in unauthorised vaults. The pawn broker must maintain a pledge book which should record the following:

                     (i) The name and address of the pawnor;

                     (ii) The date and principal amount of loan;

                     (iii) The specified rate of interest;

                     (iv) The amount of every payment received and the date of such payment;

                     (v) A detailed description of the pledged item; and

                     (vi) The time agreed upon for the pawn redemption.

31. In case of default, the pre-existing position of bringing the item given as security for private sale or appropriating the item to one has been done away with. Under Section 11 of the Act, a minimum period of one year has been fixed to retain the articles before adopting procedure for sale. It is now mandated that where, despite intimation, the pawnor has not redeemed the item, public auction should be held and that too, only through the office of a Government approved and registered auctioneer. Public notice must be issued containing specified details and the notice must be published in a local newspaper. It should be approved by the revenue authorities, prior to holding of the auction.

32. To address the issue of retention of the excess amount, Section 12(4) of the Act has been incorporated. If an item is auctioned for an amount higher than the combined value of principal, interest and auction charges, the pawn broker has to disburse the surplus amount to the pawnor. The rules further contemplate a mechanism for settlement of disputes. If a pawn broker illegally refuses to release a pledge upon payment, the pawnor can approach the jurisdictional revenue authorities. These officials have been empowered to audit the pawn broker’s ledgers and compute the exact amount due. Thereafter, they can call upon the pawnor to make the payment and ensure the release of the articles. It is this power that has been exercised by the 1st respondent in this case.

33. The pawnor has also been given certain rights. If the pawnor is willing to pay the full amount due on the principal and interest accrued and thereby, tenders the amount but the pawn broker refuses to receive the amount, the interest accumulation stops forthwith. In such circumstances, the pawnor can approach the Revenue Divisional Officer by depositing the amount with the Revenue Department and request the authorities to pass an order for release. In case, the pledged item is lost or stolen, the interest stops accruing from the date of such loss or destruction.

34. By Section 13 of the Act, the pawn broker is liable to pay compensation for the loss of the secured item. When the interest is frozen, the formal procedure for public auction is commenced and the catalogue, if notified, is issued. If the pawnor decides to redeem the item any time before the sale is held, he or she must pay the frozen interest plus the auction charges. Section 12-A of the Act is a special provision giving the State Government the power to declare the debt relief. When such an order is passed by the State Government, the interest is statutorily barred.

35. Another important provision is Section 21. When a pawn broker is found guilty of an offence under the Act or when his license is cancelled under any of the provisions of the Act, the contract entered into with him, in relation to his business of pawn broker, is valid. The Section also states that the pawn broker retains his lien or the right to the pledge or to the loan and interest and other charges, if any, payable in respect thereof. The Section also makes it clear that finding of guilt for an offence under the Act, or the cancellation proceedings, will not affect any obligation or liability incurred by the pawn broker before that offence or cancellation. It is this section which is relied upon by Mr.A.Arul Jenifer to state that the Revenue Divisional Officer committed an error in denying him interest from April 2018 till February 2026, when the impugned order came to be passed. According to him, as Section 21 saves the right of a pawn broker to the principal and interest, the concluding portion of the impugned order requires to be interfered with.

36. A reading of Section 21 alone would support the submission of Mr.A.Arul Jenifer. What escapes his attention is the first proviso appended to Section 21. As per this proviso, the pawn broker is not entitled to the interest under the following circumstances.

                     (i) When a pawn broker fails to deliver the pawnor the pawn tickets as required under Section 7; or

                     (ii) When he fails to give the pawnor or his agent a receipt as required under Section 10(1)(c); or

                     (iii) When he fails to furnish, on a requisition made under section 10(1)(d), a statement of account as required, within one month from such requisition.

37. It is on record that Ganesan Chettiyar, the husband of the first petitioner and the father of the second petitioner, had falsely claimed that he has sold the jewels for the alleged default. The petitioners nowhere in the affidavit has denied that the notice was not issued. On the contrary, the petitioners concede that their licenses were cancelled on 16.04.2018 on account of violation of the Act and Rules. Furthermore, the second respondent even earlier approached this court by way of a writ petition in 2013 seeking a direction from this Court to initiate action against the writ petitioners herein. The action was also initiated in October 2012.

38. Despite initiation of action, as no further proceedings enabling the second respondent to redeem his pledge had been taken. Thereafter, the second respondent was constrained to file yet another writ petition and also a contempt proceeding. By an order dated 24.01.2019, this court had recorded that the plea of the second respondent was not allowed to redeem the gold ornaments and they continued to be under the illegal custody of the writ petitioners herein. The Tahsildar had initiated proceedings on the petition filed by the second respondent seeking redemption of the jewels. This was on 20.06.2018. It was finally on the intervention of this court on 05.03.2025 that the proceedings had been culminated into the impugned order.

39. Nowhere in the affidavit the writ petitioners urged that they gave a statement of accounts, either to the second respondent or to the officials during the course of enquiry. On the contrary, the notice dated 23.08.2011 shows that the petitioners and their family members attempted to illegally and unlawfully appropriate the pledged jewels towards themselves by putting up a story with false allegations. This reveals that the intention of the petitioners is not to act as per the Act and Rules and issue a statement of account and get the principal and interest due. It has been petitioners, who consistently delayed the proceedings from 23.08.2011 till April, 2018, when the second respondent moved the revenue authorities. When the petitioners are at fault, they cannot lay the blame on the door of the second respondent and claim that they are entitled to interest upto date.

40. The attempt of the petitioners to convert the security and appropriate the jewels with themselves shows that the petitioners do not want to act as pawn brokers within the meaning of the Act; but have been eyeing the jewels to appropriate it with themselves. The reason is not too far to see. It is because the value of the gold had not gone down but has been increasing exponentially from 2011 till 2026. The second respondent has not deposited a mean amount towards security. He has deposited more than 1 ½ kgs of gold, which is worth about several crores today.

41. This court should recollect that a writ court is not only a court of law, but also a court of equity. If a petitioner approaches the court and is guilty of blame worthy conduct, this court is entitled to dismiss the petition even without examining the merits of the case. A Constitution Bench of the Supreme Court declared that even when fundamental rights are violated, relief can still be denied in a writ petition, if there is an unsatisfactory conduct on part of the petitioners (See, Tilokchand and Motichand & others v. H.B. Munshi & another, AIR 1970 SC 898).

42. The facts set forth above, especially the attempt to covert the property belonging to the second respondent and thereafter, delaying the proceedings shows that their conduct is unworthy for this court to come to their rescue. Yet, because of the vehement pleas of Mr.A.Arul Jenifer, this Court had gone into the mertis of the case.

43. The conclusion is as the first proviso to Article 21 operates and since the proviso operates as an exception to the Section to which it is appended, Mr.A.Arul Jenifer cannot rely upon Section 21 and seek for interest upto the date of redemption. Furthermore, as the conduct of the petitioners from 23.08.2011 till date is a blame worthy one. Even on that ground, this court is not inclined to interfere with the impugned order.

44. The Revenue Divisional Officer has balanced the interest of the writ petitioners as well as the second respondent and had arrived at a just conclusion. The interest that the petitioners has been called upon to pay is twice the amount received as principal. The petitioners should be happy with the same. In any event, this court under Article 226 of the Constitution of India, is not sitting as a court of appeal over the impugned order but only exercising the visitorial or supervisory jurisdiction. The court is concerned with the decision making process, rather than the decision itself. Mr.A.Arul Jenifer has not been in a position to point out any error in the decision making process.

45. In fine, the writ petition is dismissed with costs of Rs.20,000/- (Rs.10,000 per petitioners), to be paid to the second respondent. The second respondent shall deposit the determined amount forth with and the first respondent shall ensure redemption of jewels within one week therefrom. Consequently, the connected miscellaneous petitions are closed.