A bank may not enforce a pledge against disputed claims, ensuring protection against arbitrary actions until disputes are resolved.

JUDGMENT

(Dated this the 23^rd day of January, 2026)

This writ petition is filed by the petitioner seeking the following reliefs:

“i. Issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned notices issued by the respondents Bank, including the gold loan recall notice and gold auction notices dated 07-08-2025, 18-08-2025, and 22-08-2025, to the extent they seek to retain or auction the pledged gold ornaments under Gold Loan No. GL27016 on the basis of alleged other dues;

ii. Issue a writ of mandamus or any other appropriate writ, order or direction commanding the 1st respondent Bank to release the gold ornaments pledged under Gold Loan No. GL27016 to the petitioner and his wife upon payment of the gold loan dues, if any, without insisting on settlement of any alleged dues arising out of the petitioner's disputed termination or the Staff Housing Loan.

iii. Issue a writ of prohibition restraining the 1st respondent Bank from conducting any auction or taking any coercive steps with respect to the gold ornaments pledged by the petitioner's wife, pending final adjudication of the petitioner's service dispute before the competent statutory forum.

iv. Declare that Clause 7 of the Gold Loan Pledge Form cannot be invoked in respect of liabilities that are disputed, uncrystallised, or arising from pending disciplinary or service proceedings.

v. Declare that the respondent Bank is not entitled to retain or proceed against the gold ornaments pledged by the petitioner's wife under Gold Loan No. GL27016 towards any alleged dues arising out of the petitioner's employment or termination, which is under challenge and has not attained finality.

vi. Declare that the pledged gold ornaments do not form part of the "secured asset" under the SARFAESI Act in respect of the petitioner's housing loan and therefore cannot be subjected to proceedings under Sections 13(2) or 13(4) of the Act.

vii. Declare that the action of the respondent Bank in invoking Clause 7 of the Gold Loan Pledge Form to retain the gold ornaments for alleged "other dues" is arbitrary, illegal and without authority of law, and violative of Articles 14 and

300A of the Constitution of India.

Viii. Grant such other and further reliefs as this Hon'ble Court may deem fit and proper in the interests of justice.”

2. Considering the facts and circumstances of the case, this Writ Petition is disposed of directing that the petitioner shall pay an amount of Rs.2,00,000/- (Rupees two lakhs only) on or before 29.01.2026, and the Bank shall not sell the gold ornaments pledged for the loan till 04.02.2026.

Sd/-