The High Court dismissed a Writ Petition challenging a Nidhi Company's licenseless advance of jewel loans. The Court held that statutory notifications authorize Nidhi Companies to advance loans against securities.
The Writ Petition filed under Article 226 of the Constitution of India is dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.03.2022
CORAM
THE HONOURABLE MR.JUSTICE M.GOVINDARAJ
W.P.NO.37251 OF 2004 AND M.P.NO.44708 OF 2004
K.Govindarajulu
... Petitioner
Vs.
... Respondents
(R1 is not a necessary party vide order dated 10.02.2022 made in W.P.No.37251 of 2004 by MGRJ)
PRAYER: The Writ Petition has been filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, to direct the respondents 1 to 3 to take necessary action against the 4th respondent company as per the Pawn Brokers Act, since the 4th respondent company is continuously advancing the jewel loan, without any valid licence and also take necessary action and prosecute all the directors in-charge of the day-today administration of the 4th respondent company.
O R D E R
The petitioner is an erstwhile Director of the 4th respondent Nidhi Limited. He has come out with the grievance that the Nidhi Company is advancing loans against gold without taking proper licence under Pawn Brokers Act. Therefore, he made a representation to the second and third respondents dated 11.11.2002 and 03.01.2004 to take action as per Pawn Brokers Act, for advancing jewel loan without any valid licence and also to take necessary action and to prosecute all the directors, who are in-charge of the day-to-day administration of the 4th respondent company.
shall be no order as to costs. Consequently, connected miscellaneous petition is closed.
Sd/Assistant Registrar(CS-II)
//True Copy//
Sub Assistant Registrar
asi
To
W.P.No.37251 of 2004 and M.P.No.44708 of 2004
BP(CO) RLP(20/04/2022)
2 issues framed by the court
Whether a Nidhi Company is entitled to advance jewel loans against gold, silver, or jewellery without a valid licence under the Pawn Brokers Act.
Whether notifications from the Ministry of Companies Affairs empower Nidhi Companies to advance such loans.
K. Govindarajulu
The Governor, Reserve Bank of India, Chennai
The District Collector, Kanchipuram District
The Tahsildar, Tambaram Taluk
M/s. Samarasa Mutual Benefit Fund Ltd.
M. Govindaraj
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
