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M. Kevalchand Sowcar Vs. the State of Madras and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 899 of 1955
Judge
Reported inAIR1957Mad514; 1957CriLJ962
ActsConstitution of India - Articles 13, 14, 19, 19(1) and 19(6); Madras Pawn-brokers Act, 1943 - Sections 2(5), 3, 4, 4(1), 4(2), 6, 10, 11, 12, 12(3), 13(1), 15, 17(2), 20 and 21A; Debt Law; Companies Act, 1913; Code of Criminal Procedure (CrPC) , 1898 - Sections 59
AppellantM. Kevalchand Sowcar
RespondentThe State of Madras and ors.
Appellant AdvocateA. Seshachari and ;A. Venkatachari, Advs.
Respondent AdvocateSpecial Govt. Pleader
DispositionPetition dismissed
Cases Referred and Abdul Aziz v. Emperor
Excerpt:
madras pawn brokers act (xxiii of 1943)--validity--whether said act or any of its provisions offends articles 14 and 19 (1)(g) of constitution ; neither the madras pawn brokers act (xxiii of 1943) as a whole nor any of its provisions offends article 14 of the constitution. the statutory exemptions for which section 2 (5) of the said act provided and the statutory power to grant exemptions in favour of companies incorporated under the indian companies act (vii of 1913) vested in the state government by section 21-a do not amount to an unconstitutional discrimination against the rest of the class of persons engaged in the business of pawn-brokers.; the classification of pawn-brokers has a reasonable and just relation to the object of the act even as disclosed in the statement of.....1. the petitioner is a pawnbroker, who has obtained a licence under the provisions of the madras pawnbrokers act, xxiii of 1943. the relief, the petitioner asked for in the application he filed under article 226 of the constitution, is the issue of a writ of mandamus or any other appropriate writ to restrain the sub magistrate, poonamallee, from proceeding with the enquiry against the petitioner 'initiated under section 15(1) of the pawnbrokers act. the constitutional validity of the pawnbrokers act (hereinafter referred to as the act) was challenged by the petitioner; and in particular he challenged the constitutional validity of sections 3, 4, 6, 10, 13 and 20 of the act. during the arguments, however, the validity of other sections of the act also was assailed.2. it may not be.....
Judgment:
1. The petitioner is a pawnbroker, who has obtained a licence under the provisions of the Madras Pawnbrokers Act, XXIII of 1943. The relief, the petitioner asked for in the application he filed under Article 226 of the Constitution, is the issue of a writ of mandamus or any other appropriate writ to restrain the Sub Magistrate, Poonamallee, from proceeding with the enquiry against the petitioner 'initiated under Section 15(1) of the pawnbrokers Act. The constitutional validity of the Pawnbrokers Act (hereinafter referred to as the Act) was challenged by the petitioner; and in particular he challenged the constitutional validity of Sections 3, 4, 6, 10, 13 and 20 of the Act. During the arguments, however, the validity of other sections of the Act also was assailed.

2. It may not be necessary to set out the events that led up to the institution of these proceedings by the petitioner. The question debated before me was, whether the Act as a whole or at least many of its provisions are void and unenforceable, and whether they come within the ban imposed by Article 13 of the Constitution.

3. The petitioner contended that the Act as a whole was discriminatory since, it singled out only pawn-brokers among money-lenders for discriminatory treatment. That the petitioner contended, brought the Act as a whole within the mischief of Article 14 of the Constitution. Even if Article 14 was not contravened, the petitioner urged, many of the provisions of the Act offended Article 19(1)(g) of the Constitution.

4. The Madras Pawnbrokers Act was enacted in 1943, at a period when the legislative functions of the province of Madras vested in the Governor under the provisions of the Government of India Act, 1935. The preamble to the Act ran:

"Whereas it is expedient to make provision for the regulation and control of the business of pawnbrokers in the province of Madras it is hereby enacted as follows:"

It is permissible to understand the scope of the preamble in the light of the Statement of Objects and Reasons, which ran;

"Many pawnbrokers, especially in urban areas, are suspected of receiving stolen property and there is a marked reluctance on their part to reveal the source from which the property is received by them. The account books of some pawnbrokers are now written in a script not current in the province and this adds considerably to the difficulty of preventing them from making an illegitimate use of their position. The Government therefore considered it necessary to enact a measure requiring pawnbrokers in this province to take out licences and subjecting their operations to a due measure of control on the lines of the English Pawn-brokers Act, 1872.''

Consistent with the object set out to control the business of pawn-brokers, principally in urban areas, Section 1 (3) of the Act vested in the State Government the power to apply the provisions of the Act other than Section 1 to the whole or any portion of the State of Madras by notification. Though the mischief sought to be prevented by the Act was noticeable in the past, mostly in urban areas, the operation of the Act was not- confined by the enactment itself to urban areas.

5. It is against this background that X have to consider the question mooted by the learned counsel for the petitioner, whether the Act as a whole falls within the mischief of Article, 14 of the Constitution. Prima facie, the Act is a discriminatory piece of legislation, since pawnbrokers alone even among money lenders have been subjected to the control and regulation prescribed by the Act, The defense to the charge of discrimination was reasonable classification. If that prevails, the apparent discrimination will not be unconstitutional, and the enactment will fall outside the ban Imposed by Article 14 on discriminatory legislation.

6. It may not be necessary to review at this stage the case law on the subject. What constitutes reasonable classification has been fairly well settled now by the decision of the Supreme Court.

7. "Pawnbroker" is defined by Section 2 (6).

"Pawnbroker means a person who carried on the business of taking goods and chattles in pawn for a loan;

Explanation: Every person who keeps a shop for the purchase or sale of goods or chattles and who purchases goods or chattels and pays or advances thereon any slim of money, with or under an agreement or understanding expressed or implied that the goods, or chattels may be afterwards repurchased on any terms is a pawnbroker within the meaning of this clause."

8. The expression '"Loan" is defined by Section 2 (5): of the Act:

"Loan" means an advance of money or in kind at interest, and includes any transaction which the court finds in substance to amount to such an advance ..........."

I shall leave out for the present exceptions (0 to (v) specified in Section 2 (5) of the Act.

9. Pawnbrokers constitute a section of money lenders, persons who advance loans. Pawnbrokers also constitute a Sub-section of money-lenders who advance loans on the security of the movable property of the borrower. Pawnbrokers constitute a definite ascertainable class of persons, subject to the exceptions for which the Act provided. This class of money-lenders has been subjected to statutory control by the impugned Act. Whether the enactment is based on a reasonable classification is the question.

10. The Statement of the Objects and Reasons for the enactment, which I have extracted above, should suffice to uphold the claim of the Government, that the classification is reasonable, and that the apparent discrimination is not unconstitutional, facilities for disposal or concealment of stolen property, which necessarily implies movable property -- goods or chattels is the statutory expression -- are obviously more pronounced in the case of pawn shops than in the case of other money-lenders. That was the primary mischief the enactment sought to rectify by imposing statutory control on the money lending activities of the pawnbrokers. The other mischief the Act was designed to rectify, as explained in the Statement of Objects and Reasons, was that some of the pawnbrokers maintained their accounts in a script not current in the State of Madras. It is common knowledge that for a considerable time the class of people, popularly known as marwaris, has to a considerable extent monopolised the business of pawnbrokers, at least in Madras and many other urban areas. Naturally they maintain records in their own language. That, according to the Government facilitated the concealment of their nefarious activities, if any of them embarked oh such activities. It is not necessary to establish that all pawnbrokers are dishonest. If the business and the method in which it was conducted facilitated dishonesty, an Act designed to control, if not altogether terminate, the dishonest practices which had developed in the business cannot be said to be unconstitutional, because restrictions were imposed only on one class of money leaders. The classification has a reasonable and just relation to the object of the Act even as disclosed in the Statement of objects and Reasons.

11. The statement of Objects and Reasons may not be conclusive, or even exhaustive of the grounds On which the reasonableness of the classification could be sustained. It is again common knowledge that a large number of poor and needy persons have to resort to pawnbrokers, and that unlike banks and co-operative societies, for instance, a pawn-broker lias a natural advantage in dictating the terms on which he fs prepared to lend money. Usurious rates of interest were not uncommon, in that class of business. Very often the borrower is unable to redeem the pledged goods. Sooner or later he loses the goods themselves. Dishonest disposals of property by faked auction were not uncommon either. It may not be necessary to set out many of the other evils that attached themselves to this line of business, which got into the hands of a comparatively limited class of persons. I think I have said enough to indicate that there was every justification for Imposing statutory control over the business, of pawnbrokers in the State. The classification of pawnbrokers for purposes of legislation as I have pointed out, bore a Just and reasonable relation to the object of enactment.

12. The learned counsel for the petitioner pointed out that, even within the class of persons who satisfied the definition of "pawn-broker" in Section 2 (6) of the Act, a further discrimination was made. The definition of "loan" in s. 2 (5) of the Act excluded' from the operation of the Act, advances made by a co-operative society and a banking company. It also excluded deposits with an incorporated company or co-operative society. It may not be necessary to set out the other exceptions for which Section 2 (5) provides. In addition, under Section 21-A, the State Government has been invested with a power to exempt from any of the provisions of the Act, any company incorporated under the Indian. Companies Act, 1913, before 1st November 1944. It should ' be noted that, even if this further discrimination be held unconstitutional, that cannot by itself invalidate the Act as a whole. If, for instance, the statutory exemptions for which Section 2 (5) provides and the power to exempt vested in the Government by Section 21-A of the Act are held unconstitutional, those statutory provisions obviously severable from the main Act will cease to be enforceable. That would still leave the rest of the Act intact.

13. The further classification effected by the statutory exemptions provided by Section 2 (5) of the Act can also be justified on the ground of reasonable classification. If that be the case, there can be no proved charge of denial of equal protection of laws, prohibited by Article 14 of the Constitution No doubt, but for She statutory exemptions, banking company and a co-operative society lending money on the pledge of movable property will fall within the definition of "pawnbroker" in Section 2 (6) of the Act. But they have been excluded from the scope of the whole Act by Section 2 (5) of the Act. The reason for this differentiation is obvious. The co-operative societies and the banking companies are already subject to regulation and control by appropriate enactment. The dishonest disposal 'of stolen properties, one of the main evils the Act Was designed to prevent, would not be easy in the case of co-operative societies and banking companies. Even if it occurs in exceptional cases, detection under the scheme of control and regulation imposed by the appropriate enactments should be easy. The Act itself does not exempt loans advanced by all the companies Incorporated under the Indian Companies Act. The power of exemption in such cases is granted to the Government by Section 21-A of the Act. A power of exemption by itself may not amount to unconstitutional discrimination (see Globe Theatres v. State of Madras, (A).

14. in my opinion, neither the statutory exemptions for which Section 2 (5) of the Act provided, nor the statutory power to grant exemptions in favour of companies incorporated under the Indian Companies Act vested in the State Government by Section 21-A amount to an unconstitutional discrimination against the rest of the class of persons engaged in the business of pawnbrokers.

15. In my opinion neither the Act as & whole nor any of its provisions offends Article 14 of the Constitution.

16. Within the class-of people to which the provisions of the Act apply, the Act makes no differentiation. There is no denial of equal protection of laws within that class. That class, as I have pointed out earlier, is easily ascertainable, and it constitutes a known and definite section of persons who carry on the business of money-lending.

17. The next charge to be investigated is, whether any of the provisions of the Act constitutes an unconstitional abridgment or infringement of the fundamental right to carry on business guaranteed by Article 19(1)(g) of the Constitution. Here again, the curtailment of the right of a person to carry on the business of a pawnbroker is apparent. The Act subjects his money lending activities to control and regulation. The real. question is, are these restrictions, and do they fall within the scope of Sub-clause (S) of Article 19 of the Constitution?

18. It may not be necessary to review the case law to ascertain the tests to be applied to decide whether a given statutory restriction on the exercise of any of the fundamental rights guaranteed by Article 19(1)(g) is reasonable. It was a well settled principle that Mahajan C. J. referred to inCooverjee B. Bharucha v. Excise Cpmmr. and the Chief Commr., Ajmer, (B) :

"Article 19(1) (g) of the Constitution guarantees that all citizens have the right to practise any profession or to carry on any occupation or trade or business and clause (C) of" the article authorises legislation which imposes reasonable restrictions on this right in the interests of the general public. It was not disputed that in order to determine the ressonableness of the restriction regard must be had to the nature of the business and the conditions prevailing in that trade. It is obvious that these factors must differ from trade and no hard and fast rules concerning all trade can to laid down. It can also not be denied that the State has the power to prohibit trades which are illegal or immoral or Injurious to the health and welfare of the public.

Laws prohibiting trades in noxious or dangerous goods, or trafficking in women cannot be held to be illegal as enacting a prohibition and not a mere regulation. The nature of the business is, therefore, an Important element in deciding the reasonableness of the restrictions. The right of every citizen to pursue any lawful trade or business is obviously subject to such reasonable conditions as may be deemed by the governing authority of the country, essential to the safety, health, peace, order and morals of the community.. Some occupations by the noise made in their pursuit, some by the odours they engender, and some by the dangers accompanying them, require regulations as to the locality in which they may be conducted. Some, by the dangerous character of the articles used, manufactured or sold, require also special qualifications in the parties permitted to use, manufacture, or sell them."

19. I have already referred to some of the features of the business of pawnbrokers carried on in this State, especially in urban areas. I have also referred to the evils which grow up, which the State intended to minimise and control, if not altogether eradicate, by the statutory regulations imposed by the impugned Act. The poverty of the class of debtors who generally seek loans from pawn brokers and the helplessness of those debtors which compels them to submit to even unseasonable terms of the creditor have already been adverted to by me. Under such circumstances, that the freedom of contract is controlled is by Itself no proof of a charge of unreasonableness of the restriction to carry on business, un-reasonableness which would rob the statutory restriction of its constitutional validity. It is with reference to these general considerations that I shall examine the provisions of each of the impugned sections of the Act; the attack by the learned counsel for the petitioner was to some extent enlarged beyond the scope of the enumeration in the petition itself, during the arguments before me.

20. Section 3 in effect requires every pawnbroker in the area, to which the Act has been extended by notification by the Government under Section 1(3) of the Act, to take out a licence every year for every shop of his. The licence has to be granted every year, and Section 8 (2) specifically provides that it may be renewed from year to year. It is too late in the day to urge that the liability to take out a licence, though it constitutes a restriction on the right to carry on business, by itself constitutes an unreasonable restriction on that right. The reasonableness of the statutory ebligation to take out a licence has to be viewed against the background of the conditions of the trade and the evils attendant on it, to which I have already referred, and also with reference to the provisions of Section 4 of the Act. Section 4(2), the validity of which was also impugned, lays down:

"The licence shall not be refused except on one or both of the following grounds, namely (a) that the applicant is of bad character.

Explanation : If "any evidence of bad character is adduced against the applicant, he shall be given an opportunity of rebutting such evidence; and

(b) that the shop or place at which he intends to carry on the business of a pawnbroker or an adjacent house or shop or place, owned or occupied by him, is frequented by thieves or persons of bad character."

Thus, while an obligation is laid by the Act on the pawnbroker to take out an annual licence, the obligation to grant the licence sought is laid on the licensing' authority specified in Section 4(1) of the Act, and the right to refuse a licence is denned with apparent precision. The real question" is not whether the obligation to take out a licence constitutes an unreasonable restriction, but whether Section 4(2) which provides for refusal of the licence in the contingencies specified therein, constitutes an unreasonable restriction.

21. No doubt the learned counsel for the petitioner urged that the obligation to take out an annual licence is itself unreasonable. But I am unable to see any real substance in this' objection,

22. With reference to Section 4(2) (a) which provides for refusal Of a licence if the applicant is of bad character, the learned counsel for the petitioner pointed out that what constitutes bad-character has not been defined by the statute Itself, and he urged that, apart from the character of the applicant being an irrelevant consideration in deciding whether he should be granted a licence or not, the absence of a statutory definition made the test vague in its application, which by itself should suffice to prove that it is an unreasonable "requirement. No doubt what constitutes .bad character is not defined by the Act itself. Obviously it is an objective and not a subjective test for which Section 4(2) (a) of the Act provides. But then, it should be remembered, that it is" the licencing authority that has to decide whether an applicant is of bad character within the meaning of Section 4 (2) (a).

The licencing authorities are the Collector of Madras within the City of Madras and the Revenue Divisional officer in the districts. It should be remembered that the Act is of the year 1943, when the departmental interdependence of the police and the revenue officers in the maintenance of law and order was even more pronounced than it is now. The Act itself provides for a large measure of control to be exercised by the police over the activities of pawnbrokers. The concept of a bad character was and continues to be a well known one both to the1 officers of the police department and the officers of the revenue department, who are expected to and do work in unison with the police in maintaining law and order. To a revenue officer or a police officer, a B. C. (Bad Character) connotes something definite.

Indeed it should be common knowledge that every police station maintains a register of reputed bed characters. In addition, in every village, under the immediate administrative control of the officers of the revenue department, the village munsif is obliged to maintain register of bad characters of that village, which register is subject to periodical scrutiny by the officers. I am not for a moment impyling that unless the name of a person is found in one of those registers, he should not be viewed as a person of bad character within the meaning of Section 4(2) (a) of the Act. All that I have endeavoured to show is that there is something definite in the concept of bad character, well ascertained and ascertainable by the licensing authority specified in Section 4(1) of the Act.

If should also be remembered that Section 4(2) (a) provides that before the licence applied for is refused on the ground that the applicant is a reputed bad character the statutory expression used, no doubt is, "the applicant is of bad character" the applicant has to be given a reasonable opportunity to meet such a charge, and to prove to the satisfaction of the licensing authority that the charge in fact is not true. That again is a clear indication that it is an objective test, to be supported by evidence, that the Act has provided for, and that there is really nothing vague about it, Considering that one of the evils the Act intended to control was the dishonest disposal of stolen properties through pawn shops the statutory, disqualification of bad character cannot, be viewed as constituting an unreasonable restriction on the activities of a pawn-broker.

23. Section 4(2) (b) is even more precise in its scope than Section 4(2) (a) of the Act. Section 4(2) (b) provided for two contingencies, in either of which a licence may be refused; (1) that the shop or place at which the applicant intends to carry on the business of a pawnbroker is frequented, by thieves or persons of bad character, and (2) that a house, shop or place at which he intends to carry on the business of pawnbroker, is frequented by thieves or persons of bad character. In either case, facilities afforded to thieves or persons of bad character would be one of the factors for consideration. A further requirement is that these facilities have been afforded by the applicant for a licence, it is not the mere proximity to any house resorted to by thieves or persons of bad character that disqualifies the applicant.

The premises resorted to by thieves or persons of bad character where these premises are used for the conduct of the business of a pawnbroker or where these premises are adjacent to the pawnbroker's shop, must belong to the applicant himself, which would mean that he has a reasonable amount of control over those premisses; to prevent access to thieves or persons of bad character. I have already dealt with what the statutory expression "person of bad character" connotes in the context of the Act. There is certainly nothing vague about the concept of a thief. Once again I have to point out that the Act was designed to prevent or at least to control disposal of stolen property, which is certainly not an unreasonable objective. It is the duty of the State to protect the interests of the public. It is with reference to this objective that the reasonableness of the restriction imposed by Section 4(2) (a) has to be judged, and, judged in the light, I have no hesitation in holding that Section 4(2) does not Impose an unreasonable restriction.

24. Apart from the easily understood and applied tests prescribed by Section 4(2) (a) and 4(2) (b), Section 4(3) provides for a right of appeal against the refusal of a licence. That is' another factor to establish the reasonableness of the restriction imposed by Section 4(2) of the Act.

25. The learned counsel for the petitioner contended that the requirements of Section 5(a) constituted a further unreasonable restriction. Section 5(a) runs :

"5. Every pawn-broker shall -- (a) always keep exhibited in large characters over the outer door of his shop or place of business his name with the word 'Pawnbroker' in the "chief language of the locality."

Frankly, I am , unable to perceive anything unreaisonable in that statutory provision. The learned counsel for the petitioner, as I understood him eventually, said that the statutory requirement that the name should be in large characters was unreasonable. The argument has to be only stated in that form to be repelled without any further serious consideration. All that Section 5(a) requires is that there should be no difficulty in identifying a pawnbroker's shop, and it prescribes a name board for that shop. That is not unreasonable.

26. Section 6(a) of the Act prescribes the statutory upper limit on the rate of interest a pawnbroker may charge on the loans advanced by him. It is nine and three eighth per cent per annum simple Interest where the loans are of Rs. 25 and below, and six and a quarter per cent per annum in other cases. Prima facie, a statutory control of the rate of interest does abridge the freedom of contract. Freedom of contract can be claimed as incidental to and in fact necessary for carrying on any business, including that of pawnbroker. The question however is, is it an unreasonable restriction, unreasonable enough to take it outside the scope of Article 19(6) of the Constitution. My answer to that question, with reference to Section 6(1) of the Act, is in the negative. Statutory control of- interest on loans advanced by moneylenders is nothing new. Legislative practice in the past sanctioned it.

Even after the Constitution came into force, the validity of such legislative controls has been upheld by the courts. Such legislative controls have been designed in the interests of the public. I have already adverted to the type of poor, needy and helpless persons that are driven to the" pawnbrokers' shops for raising small loans to tide over the immediate difficulties. The statutory maxima, by themselves not unreasonable, were designed in the interests of that section of the public. The learned Government Pleader referred to Krishnamurthi v. Venkateswaran, (C), where a Bench of this court

upheld the constitutional validity of an analogous provision in the Madras Agriculturists Relief Act (Act IV of 1938). In my opinion the statutory maxima prescribed by Section 6(1) of the Act do not constitute an unreasonable restriction on the right of the pawnbroker to carry on his business.

27. The next set of provisions the validity of which were attacked were those in Section 10 of the Act. Section 10 (1) (a) requires a record of the transactions to be maintained in the prescribed form and referred to as the pledge book, and the details to be entered in that book have also been specified in Sub-clauses (i) to (v). Section 10(1) (b) prescribes some of the other records to be maintained by a pawnbroker. These are really records which a pawnbroker should, in the ordinary course of his business, maintain both in his own Interests and in the interests of his customers. I am unable to see anything per se unreasonable in the statutory provision requiring the maintenance of the specified records. As I understood the learned counsel for the petitioner, his grievance was that insistence in effect on the maintenance of a ledger in addition to a day-book of the transactions of the pawnbroker constituted an unreasonable restriction on the right of the pawnbroker to carry on his trade.

Apart from the fact, that such an argument may not deserve any further serious consideration, there is this feature to be remembered. The maintenance of a record of the transactions in the ledger form will facilitate the discharge of that statutory duty imposed on the pawnbroker by Section 10(1) (d) of the Act, the validity of which was not really challenged. The borrower or pawnor has been given a statutory right, subject to the restrictions specified in 6; 10(l)(d), to a copy of the record of the transaction of loan and compliance with the corresponding statutory duty laid on the pawnbroker would certainly be easier, if a record is maintained in the form of a ledger.

28. Section 10(2) of the Act requires that all records or entries made in the books, accounts and documents referred to in Section 10(1) of the Act shall be either in English or in such language of the locality as may be prescribed, i.e., prescribed by the Government as the rule-making authority. I have already pointed out that even the Statement of Objects and Reasons recorded that a number of pawnbrokers in this State maintained their accounts in a language and script, with which the residents of the locality were not familiar. The learned counsel for the petitioner pointed out that many of the pawnbrokers belonged to the community popularly, if not correctly, referred to as Marwaris, and he urged that many of them were ignorant of English or of the regional language in which Section 10(2) of the Act compelled them to maintain their records. The learned counsel urged that in such circumstances Section 10(2) must be struck down as imposing an unreasonable restriction on the freedom of the pawnbroker to carry on his business.

Is the restriction unreasonable is the question. Is it a restriction on the pawnbroker's right conceived in the- interests of the public or a section thereof. The Act was designed among other things to control the nefarious activities, if any, of some pawnbrokers, who facilitated -the disposal of stolen property. The Statement of Objects and Reasons pointed out that the maintenance of the books of account by a pawnbroker, in a language not in current use in the locality in which he carried on his business, made detection of offences of disposal of stolen properties more difficult. Even if the restriction imposed by Section 10(2) was designed to facilitate maintenance of law and order, that would be sufficient to bring it within the scope of Article 19(6) of the Constitution. There is also another factor to be considered. I have already adverted to the statutory right created by Section 10(1) (d) of the Act; the validity of which was not in fact challenged by the petitioner.

In my opinion, it is also unchallengeable. The debtor has a right to know how he stands with his creditor. To give an extract of an account; if it is maintained, say in Gujarathi script, would be sufficient compliance with Section 10(1) (d), but it would in no way help a debtor unfamiliar with that language. The pawnbrokers even of the Marwari group constitute, no doubt, a section of the community. The debtors constitute another section of the community, a much larger section. If in its wisdom, the legislature chose to provide for the protection of the larger community of debtors, and in that endeavour chose to prescribe what prima facie appears to be a restriction on the right of the pawnbroker to maintain his accounts in his own language, it is not for the Courts to say that it constitutes an unreasonable restriction outside the purview of Article 19(6) of the Constitution.

29. The second part of Section 10(2) came in for an even more concentrated attack at the hands of the learned counsel for the petitioner. That portion of Section 10(2) runs:

"......and all such books, accounts and documents and all pledges taken by the pawnbroker shall be open to inspection at any time by any police officer not below the rank of Sub-Inspector or by any Held Constable authorised in writing by such police officer."

The learned counsel for the petitioner urged that the statutory right given to the police, to enter into the premises of a pawnbroker at any time, to carry out an inspection of the records of the pawnbroker, constituted an unreasonable restriction on the. right of the pawnbroker to carry on his lawful activities in his business as a pawnbroker. At first sight the contention does appear to be well founded. The learned counsel for the petitioner conjured up the vision of a midnight inspection by a police officer. That would certainly appear to be an unreasonable one. But does the section really authorise such inspections, despite the use of the expression "at any time"? If must be remembered that the second part of Section 10(2) as it stands would appear to be primarily designed to provide for a supervision even over the lawful activities of a pawnbroker.

If any given pawnbroker was suspected, for instance, of having received stolen properties, the power of police to search the premises could be founded on the provisions of the Criminal Procedure Code. In my opinion, Section 10(2) does not appear to have been designed for such purposes. Neither Section 10(2) by itself nor any other provision of the Act authorises the police to effect forcible entry into the premises of a pawnbroker by breaking open, for example, premises which have been locked. As I have pointed out, the police have ample powers under the Criminal Procedure Code, where a pawnbroker is suspected of carrying on illegal activities, that is, activities illegal under enactments other than the Pawnbroker's Act itself.

That was apparently why no specific provision was made in the Act itself to give a right to the police to search the premises of the pawnbroker with or without a warrant, where there is reason to suspect that the pawnbroker has committed offences, for example, cognisable offences, punishable under any of the sections of the Penal Code. It is in this context that the expression "at any time" in Section 10(2) will have to be construed. In the context of Section 10(2), taking the scheme of the Act as a whole also into consideration, the expression "at any time" in Section 10(2) could only mean "at any time when the pawnbroker's premises are normally kept open for business". Interpreted in that light, there is nothing unreasonable in the right conferred on the police to carry out inspection of the records in a pawnbroker's shop.

30. in my opinion, neither part of Section 10(2), constitutes an unreasonable restriction on the] right of a pawnbroker to carry on his business.

31. Section 11 of the Act also came in for criticism at the hands of the learned counsel for the petitioner. That section provides in the case of loans below Rs. 10, a minimum statutory period within which the debtor could redeem the pledge. It also in effect adds a period of seven days grace to the contract period. The learned counsel for the petitioner-contended that such a statutory provision constituted an unreasonable restriction on the pawnbroker's right to carry on his business. The learned counsel illustrated his point by an example. If a pawnbroker wanted to discontinue his -business at any given point of time, he could not insist on the redemption of all pledges by his customers. Even if the contracts provided for such a contingency he had to wait till all the pledges were cleared within the time allowed by Section 11 of the Act.

I have pointed out at more than one place in this judgment that every statutory restriction on the freedom of contract, which is part of the fundamental right to carry on business guaranteed by Art. 19(1)(g) of the Constitution Is not per se unreasonable. In applying the test of reasonableness it is the interests of the public or a section thereof that is made relevant by Clause (6) of Article 19 of the Constitution; the interests to be visualised are not only those of the pawnbroker. Section 11 as it stands does not really compel a pawnbroker to continue his business against his wishes. The statute safeguarded the rights of his debtors. That the legislature was entitled to do. I am unable to see anything unreasonable in the statutory conditions imposed by Section 11 of the Act.

32. The attack on the validity of Section 12(3) of the Act was on the lines analogous to those on which the validity of Section 11 was challenged. Section 12(1) provides for the disposal of the pledged article by auction but not otherwise.

"At any time within three years after the public auction, the holder of the pawn ticket may inspect the entry relating to the sale either in the pawn-broker's book' or in such catalogue of the auction as may be prescribed."

Here again the learned counsel for the petitioner contended that in effect even if the pawnbroker decided to discontinue his business, he would have to maintain the records of his erstwhile business for at least a period of three years, to discharge the statutory obligation laid upon him by Section 12(3) of the Act. Conceived obviously in the interests of a larger section of the public other than the pawnbrokers, the debtors, Section 12(3) does not, in. my opinion, fall outside the scope of Article 19(6) of the Constitution.

33. Section 13 (1) runs:

"Where a pledge is destroyed or damaged by or in consequence of fire, the pawn-broker shall nevertheless be liable on application made within the period during which the pledge would have been, redeemable, to pay the value of the pledge, after deducting the amount of the principal and interest."

Section 13(2) entitled the pawn-broker to Insure the goods in his custody to the extent of the value so estimated, but there was no specific statutory provision to indicate who should Dear the expenses of such insurance. The learned counsel for the petitioner contended that Section 13(1) imposed an unreasonable liability on the pawn-broker. Even if the fire, which destroyed the goods, was due to no negligence of the pawnbroker and was due to causes over which he had no control, the statutory liability imposed by Section 13(1) of- the Act would come into play. But then, it must be remembered that the debtor has a subsisting interest in the articles he has pawned and he is entitled to redeem those articles under the terms of the contract with the pawn-broker. It is basically that right that Section 13 (1) is designed to safeguard. No more than any of the other Sections I have considered so far does S, 13(1) constitute an unreasonable restriction on the pawn-broker's right to carry on his business.

34. The validity of Section 15 of the Act should really be linked up with that of Section 6 for the contravention of which penalties have been provided in Section 15. As I have already upheld the validity of Section 6 it follows the constitutional validity of Section 15 (also is unassailable.

35. Section 17(2) of the Act was the next statutory provision" the validity of which the learned counsel for the petitioner challenged. Section 17 (1) in effect penalised a person who pawns an article not belonging to him, virtually on false representations. Section 17 (2) runs:

"In every case falling under Sub-section (1), and also in any case where, on ah article being offer ed in pawn, for sale, or otherwise, to a pawnbroker he reasonably suspects that it has been stolen or otherwise illegally or clandestinely obtained, the pawn-broker shall, in the absence of reasonable excuse, inquire into the name and address of the person concerned and seize and detain such per son and the article if any, and forthwith communicate to the nearest police station the facts of the case and shall deliver the person and the article, if any, seized to the police."

The statutory obligation with a corresponding statutory right to seize and detain does not in my opinion, constitute an unreasonable restriction on the pawn-broker's, right to carry on his business. Surely it Is not claimed by the petitioner that he has a right, fundamental or otherwise, to facilitate the disposal of stolen property. One of the objects of the control imposed by the Act was to prevent clandestine disposal of stolen property. That, as I have already pointed out, was conceived in the interests of the society as a whole. The State was bound to provide safeguards against the commission of such Offences- There is certainly nothing unreasonable in the State imposing an obligation on a citizen to give information to the police, entrusted with the duty of maintaining law and order, when a citizen has reasonable grounds to believe that a cognizable offence like theft or disposal of stolen property has been committed. It is only that normal duty of a citizen that has been converted into a statutory obligation under the limited circumstances specified in Section 17(2) of the Act. I have no hesitation in rejecting the contention of 'the learned counsel for the petitioner, that Section 17(2) imposes an unreasonable restriction on a pawnbroker.

36. The last of the sections the 'validity of; which was challenged was Section 20 which runs:

"Any police officer may arrest without a warrant any-person committing in his view an offence against this Act."

The basis for the argument of the learned counsel for the petitioner that this statutory right ' given to the police was an unwarranted restriction of the pawn-broker's fundamental right to carry on his business, was the Interpretation the learned counsel placed on the expression "in his view" as it occurs in Section 20. The learned counsel interpreted that to mean "in the opinion of the police officer." That construction of the expression "in his view" is, in my opinion, untenable, As the learned Government Pleader pointed out the expression "in his view", should obviously be construed as "in the immediate presence of ft police officer-"

A statutory provision 'enabling a police officer, whose primary duty Is maintenance of law and order to arrest without a warrant when a person commits an offence in the presence of the police officer cannot be challenged as unreasonable in its scope. Obviously no person can claim a right to commit an offence made punishable by a statute whether the offence is committed in the presence of a police, officer or even otherwise. Section 20 gives a limited right to the police officer to arrest a person without a warrant, if that person commits an offence made punishable, under the Act itself, the Pawn-brokers Act.

37. The learned Government Pleader referred to Kokul Tatwa V. Emperor, AIR 1929 Pat 53 (D), and Abdul Aziz v. Emperor, AIR 1933 Pat 608 (E), where the learned Judges had to construe the statutory, expression "in his view' in S, 59, Criminal P. O. The learned Judges- held that that expression meant that the offence had been committed in the presence of the police officer or within his sight, I respectfully agree with that interpretation placed on the statutory expression "in his view" ; and that should be the Interpretation placed on that expression as it eccurs in Section 20 of the Act. The learned counsel for the petitioner realised that, if that was the limited scope of the power conferred on a police officer by Section 20 of the Act, its validity could not really be challenged. .

38. Thus none of the statutory provisions, the constitutional validity of which the learned counsel for the petitioner challenged, falls outside the scope of Clause (8) of Article 19 of the Constitution. None of the provisions, therefore, offends Article 19(1)(g) of the Constitution. The question whether any of the statutory provisions is severable, therefore, does not arise for consideration.

39. Neither the Act as a whole nor any of the provisions thereof is invalid and unenforceable.

40. The learned Government Pleader object ed to the maintainability of the petition itself. He pointed out that the petitioner had obtained a licence under the Act. and it was not thereafter open, to him to challenge in these proceedings under Article 226 of the Constitution the validity of the Act or any of its provisions subject to which he sought and obtained a licence. In view of the fact that I have upheld the validity of the Act, there is no need to pronounce any opinion on this contention of the learned Government Pleader.

41. The rule nisi is discharged and the petition is dismissed with costs. Counsel's fee Rs. 100/-


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