K JAGADESHWAR REDDY Vs. MANAGER ANDHRA BANK

JUDGEMENT

(1.) The petitioner, admittedly obtained loan of Rs. 6,000/- on pledge of gold ornaments with the respondent-Bank. One, V.San- tosh Reddy, proprietor of M/s.Santosh Brick Works too had a loan of Rs.25,000/- on mortgage of his Ac.5-00 of agricultural land and the petitioner also stood as guarantor along with another, Chintala Narasimha Reddy. The latter loan is still subsisting. When the petitioner offered to discharge the principal sum of Rs.6,000/- and interest accrued thereon and demanded return of the pledged gold ornaments, the respondent refused to return the gold on the ground that the debt of Mr.V. Santosh Reddy is still subsisting and unless it is discharged, the gold cannot be returned. The petitioner is seeking a Mandamus for accepting the repayment of debt and return of the pledged goods. These facts are admitted but the respondent claims that the petitioner was informed that Mr. Santosh Reddy is yet to redeem the mortgage debt and by letter dated April 14, 1987, Mr.Santosh Reddy was called on to pay Rs.33,603-52 Ps. due as on March 31, 1987, marking a copy thereof to the petitioner. Since the petitioner has not repaid the loan amount as a co- obligator, he is not entitled to the return of the gold. The respondent is claimed to have exercised its lien under Section 171 of the Indian Contract Act (Act 9 of 1872), for short, "the Act". It is thus the admitted fact that the petitioner obtained loan of Rs.6,000/- on pledge of gold ornaments; subsequently he stood as surety to Mr.Santosh Reddy who hypothecated his lands and obtained loan of Rs.25,000/- the loan is outstanding; later on, the petitioner offered to repay his personal debt obtained on the pledge of gold ornaments and demanded return of the gold ornaments deposited by him. The bank, instead of accepting the amount and returning the pledged gold ornaments, has exercised its lien over the pledged goods under Sec.171 of the Act. It is not the case of the bank that the petitioner has undertaken as guarantor that the gold deposited by him would be taken as security for the loan of Mr.Santosh Reddy as well. From these facts, the question is whether the bank is entitled to claim lien over the gold ornaments of the petitioner.

(2.) The respondent is an instrumentality of the State within the meaning of Article 12 of the Constitution. The actions of the respondent must be in conformity with law or administrative instructions having the force of law. Its actions are amenable to judicial review under Article 226 of the Constitution. Though the dispute arises under contractual relations, when the facts are admitted or not in dispute and the relief under Article 226 being efficacious and expeditious, it is redundant to relegate the parties to a traditional time consuming civil action for return of the gold ornaments pledged by the petitioner, on repayment of the debt. It is entirely a different facet if the facts are in acute dispute. The question at issue is a pure question of law. Therefore, this Court can exercise its power under Article 226 and decide the question of law and direct the parties to act accordingly.

(3.) Section 148 of the Act defines "bailment" to mean, the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the persons delivering them. The person delivering the goods is called the 'bailor' and the person to whom they are delivered is called the 'bailee. Section 172 postulates that the bailment of goods as security for payment of a debt or performance of a promise is called 'pledge; the bailor is called 'pawner' and the bailee is called 'pawnee'. The petitioner thus becomes a pawner and the respondent is a pawnee.So long as the petitioner performs his part of the promise, viz., making repayment of the debt obtained from the respondent, whether the respondent is entitled to refuse delivery of the gold ornaments pawned is the question.