The main legal point established is that a finance institution must follow fair practices and procedures in advancing loans on pledged jewels, and has rights in relation to the pledged jewels.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari to call for the proceedings of the impugned seizure proceedings dated 06.10.2022 passed by the respondent police, quash the same.

Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus to call for the impugned notification passed by the 1st respondent under proceeding no. Nil, dated 23.8.2022 and the consequential impugned notification passed by the 2nd respondent under proceeding no. Nil dated 29.9.2022 both relating to the jewels pledged by the respondents 3 to 17 and to quash the same as illegal and further forbear the 1st and 2nd respondent from seizing the jewels pledged by the respondents 3 to 17 with the writ petitioner.)

Common Order:

These writ petitions are filed to set aside the proceedings dated 06.10.2022, 23.08.2022 and 29.09.2022, as illegal.

2. The facts in brief which are not disputed are that the respondents 3 to 17 have pledged some jewels with the petitioner/Muthoot Finance Ltd., Sethu Road, Athiramapattinam Branch, Thanjavur District. The second respondent/Inspector of Police, District Crime Branch, Thanjavur, has issued the impugned notification dated 23.08.2022 and consequential impugned notification by the second respondent himself dated 29.09.2022, wherein, it is mentioned that pursuant to a complaint received from respondent No.18, case has been registered in Crime No.25 of 2022 and investigation is in progress and therefore, the petitioner institution shall not allow respondents 3 to 17 to redeem the pledged jewels or not to auction the jewels temporarily, until further information.

3. It is submitted by the learned Senior Counsel for the petitioner/Finance Institution that the petitioner company is a nonbanking company registered with Reserve Bank of India and has been scrupulously following fair practices as enumerated by Reserve Bank of India. Whenever a customer pledges jewels for availing loan, Know Your Customer (KYC) is being obtained by the petitioner institution, photograph of the applicant is being taken in the premises itself and after confirming the status and background of the customer as to whether he is a genuine customer and after evaluating by the trained Branch Managers, request for the loan on pledging the jewels will be processed.

4. It is further submitted that the respondents 3 to 17 have independently approached the petitioner''s institution and requested for advancing the loan by pledging the jewels. As the said jewels were old in nature, jewels were subjected to preliminary scrutiny by scratching the outer layer of the jewels and after confirming that all the jewels are genuine gold articles. KYC, Aadhar Card, Pan Card of respondents 3 to 17 were collected and after satisfying that the respondents 3 to 17 are genuine customers, the petitioner institution have processed their request and accordingly, taking the jewels as pledge, loan amount was advanced to them.

5. It is further case of the petitioner that the second respondent has suddenly visited their premises and served the impugned notification dated 23.08.2022 and provided the Crime No.25 of 2022, for the offences under Sections 408, 420, 474A of IPC. The first respondent has asked the petitioner to provide the details of jewels pledged by respondents 3 to 17 stating that the first respondent is going to seize the said jewels. The second respondent has issued further notification dated 29.09.2022 asking the petitioner not to auction the jewels and not to permit respondents 3 to 17 to redeem.

6. It is submitted by the learned counsel for the petitioner that as on date of pledging of jewels by respondents 3 to 17, there was no criminal case pending either against respondents 3 to 17 or in respect of the jewels which were pledged and the petitioner company has followed the procedure while advancing loans on pledging the jewels. It is submitted that the first and s