The issue of thousands in Madurai, Dindigul and Theni districts having pledged their jewels with local pawnbrokers who, in turn, had re-pledged them with non-banking financial companies (NBFCs) such as Muthoottu Mini Financiers, Muthoot Fincorp, India Infoline Finance, Manappuram Finance and Shriram City Union Finance was discussed at length in the Madras High Court Bench here on Monday.
The issue came up before Justice K.K. Sasidharan following individual writ petitions filed by the non-banking financial companies. While some of the petitioners sought police protection from those who had pledged jewels with pawn brokers but demanded their return from the NBFCS, others accused the police of either seizing or threatening to seize the jewels following large scale complaints from jewel owners.
During arguments, Additional Advocate General K. Chellapandian submitted that about 75,000 people had approached the police so far alleging misappropriation of jewels pledged by them with pawn brokers.
Of them around 60,000 were from Theni district, 8,000 from Dindigul and the rest from Madurai city and Madurai district police limits.
After hearing him, the judge asked all those involved in the issue to work out the modalities of returning the jewels to their rightful owners and inform the court by Thursday.
An affidavit filed on behalf of Muthoottu Mini Financiers stated that the issue of pledging jewels with pawnbrokers was regulated under the Tamil Nadu Pawn Brokers Act 1943.
As per Section 10A of the Act, a pawnbroker should ordinarily keep pledged articles in the place of business for which he had obtained licence from the government authorities concerned.
However, the Act does not contain any provision prohibiting pawnbrokers from re-pledging the jewels with non-banking financial companies either for ensuring their safe custody or for generating funds. Claiming that the practice of re-pledging was in vogue in the State for more than five decades, Muthoottu Mini Financiers admitted that it had been accepting such transactions for long.
Expressing its readiness to return the jewels pledged with it by the pawnbrokers if the latter came forward to pay the dues, the company said that the police could not interfere in the issue and attempt to seize the jewels on the basis of complaints lodged by the actual owners who had accused the pawn brokers of having absconded without returning their jewels.
