Karnataka High Court
Manakchand Motilal - Appellant
Versus
State of Karnataka - Respondent
Decided On : 03-07-91
W.P. : 8912 of 1985
( 1 ) IN this batch of Writ petitions, the petitioners, who are carrying on their business as Pawn Broken after having secured licences under the Karnataka Pawn Brokers Act, 1961 and persons who are doing business as Money Lenders having taken licences under the Karnataka Money Lenders Act, 1961 have questioned the constitutional validity of the Karnataka Pawn Brokers (Amendment) Act, 1985 and the Karnataka Money Lenders (Amendment) Act, 1985 on the ground that the provisions of the said Acts are violative of Articles 14 and 19 of the Constitution of India and they have also questioned the constitutional validity of Section 4 (2) (c) and Section 23 (2) of the Karnataka Pawn Brokers Act, 1961 as violative of Articles 14 and 19 of the Constitution.
( 2 ) THE material facts necessary for the disposal of these cases are these:- With the object of making better provisions for the regulation and control of transactions of money lending in the State, the Legislature enacted the Karnataka Money Lenders Act, 1961 ("money lenders Act" for short ). Section 2 (10) of the Act defines the expression 'money Lender', It reads:-"2 (10) "money Lender" means (i) an individual; or (ii) an undivided Hindu family; or (iii) a company or (iv) an unincorporated body of individuals: who or which, (a) carries on business of money lending in the State; or (b) has his or its principal place of such business in the State, but shall not include a bank. "section 5 of the Money Lenders Act makes it obligatory for every person carrying on the business of money lending in the State to secure a licence under the provisions of the Act and to carry on business in accordance with the terms and conditions of licence. Similarly, the Legislature enacted the Karnataka Pawn Brokers Act, 1961 ("pawn Brokers Act" for short) to make provision for the regulation and control of the pawn brokers in the State. Section 2 (7), (8) and (9) define 'pawn Broker', 'pawner' and 'pledge'. They read:-"2 (7) "pawn Broker" means a person who carries on the business of taking goods and chattels in pawn, for a loan. Explanation:- Every person who keeps a shop for the purchase or sale of goods or chattels and who purchases goods or chattels and pays or advances thereon any sum of money, with or under an agreement understanding expressed or implied that the goods or chattels may be afterwards are purchased on any terms, is a pawn broker within the meaning of this clause. (8) 'pawner' means a person delivering an article for pawn to a pawn broker. (9) 'pledge' means an article pawned with a pawn broker. "section 3 of the Pawn Brokers Act makes it obligatory for every person desirous of carrying on business as a pawn broker to do his business only after securing a licence in accordance with the provisions of the Act and to carry on the business in accordance with the conditions of licence granted under the Act. Among the petitioners some of them have taken licence only under the Money Lenders Act and have been carrying on business as money lenders. The rest of the petitioners have taken licence both under the Pawn Brokers, Act and the Money Lenders Act as in view of Section 4 (c) and Section 23 of the Pawn Brokers Act, possessing a licence under the Money Lenders Act is a condition of eligibility for securing a licence under the Pawn Brokers Act. The main business of both the money lenders and pawn brokers consists in lending money to individuals, who approach them for loan. The only difference between a money lender and a pawn broker is, the latter is authorised to accept valuable article like Gold and/or ornaments or any chattel as pledge or security for repayment. After having taken the licences, the petitioners have been carrying on the business for the last nearly two decades.
( 3 ) IN the year 1985 the State Legislature made amendments to the two enactment, by which Section 7a and 7b were introduced into the Money Lenders Act and Section 4a and Section 4b were introduced in
gpt-4
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.