Decided on December 10,1953



Govinda Menon - (1.) ON 1-11-1951 the petitioner applied to the Commissioner of Police, Madras City, for a licence to conduct the business in auction sale of pledged jewels, etc. with the mortgagees, under the name & style of Bharat and Co., at premises No. 69 Perumal Mudall Street, Sowcarpet, Madras. In that application he stated that he is a landlord paying property tax of Rs. 1147-14-0 to the Corporation of Madras. A reply was sent by the Commissioner on 19-12-1951 stating that permission was refused as the premises was reported to be unsuitable. Again the petitioner filed another application wherein he stated that the premises 15 situated in a very busy locality which is in the heart and centre of the business in the City and is an ideal place for conducting transactions of the nature for which permission was asked for. Under the circumstances he prayed that the order refusing approval may be reviewed. The reply to this letter dated 9-4-1952 is as follows: "Premises No. 69 Perumal Mudali St, Sowcarpet, Madras, where the auction sale of hedges is proposed to be held is found to be unsuitable for the purpose as the space available is inadequate. It is situated in a narrow lane, and is not easily accessible to the public. I therefore do not see any reason to modify the orders passed in this office No. 37091/E4/51 dated 19-12-1951." Not being satisfied with this reply, a further petition for reconsideration of the above order was put in. There various grounds are stated to the effect that the premises would be ideal for the conduct of such business. ON 30-4-1952 also another letter was sent. The reply of the Commissioner dated 2-5-1952 reiterated the fact that premises No. 69 Perumal Mudali Street, Sowcarpet, the first floor of which is sought to be used as the place for conducting auction, is small and very difficult for the public to reach. It is also stated that the staircase leading to it is very narrow, rendering free passage both ways difficult. The Commissioner of Police therefore stated that there was no ground for reconsideration. But the Commissioner said that he had no objection for granting the permission provided the petitioner selected a suitable place with accommodation and free passage to the hall. By letter dated 7-5-1952, the petitioner requested the Commissioner of Police to inspect the hall to ascertain its suitability. The Commissioner accordingly Inspected the place and finally by order dated 8-7-1952 he confirmed the original order stating that permission cannot be granted. Further correspondence passed between the petitioner and the Commissioner of Police of which it is unnecessary to refer at present. An appeal against the order of the Commissioner was taken to the Inspector General of Police, who confirmed the order of the Commissioner. The petitioner took up the matter with the State Government wherein also he was unsuccessful. He therefore comes up to this court for the issue of a Writ of certiorari on the ground that the order refusing him permission to conduct the auction is without Jurisdiction.
(2.) THE main argument of Mr. Chinnappa Reddi for the petitioner is that the entire approach to the question by the authorities is from a wrong angle and that they have not decided what really is the question for adjudication and such being the case there had been a failure to exercise jurisdiction. It is under Section 22, Madras Pawn Brokers Act 1943, (23 of 1943), that rules have been framed with respect to the regulation of suction of pawned or pledged articles, What the petitioner now wants is permission to act as an auctioneer of things or articles which are the subject-matter of pledge or pawn under the Pawn Brokers Act, 1943. Section 3 of the Act prohibits the continuance or carrying on of business as a pawn broker at any place in the area to which the Act applies unless he has obtained a pawn broker's licence under the Act. It is therefore clear that if a licence is granted a pawn broker can carry on the business at any place in the area. Section 12, Sub-section (1) lays down that a pledge pawned for a sum exceeding ten rupees shall, when disposed of by the pawn broker, be disposed of by sale, by auction and not otherwise, and the sale shall be conducted in accordance with such rules as may be prescribed. In these circumstances, the manner in which such sales have to be conducted are laid down by the rules. Now we come to Rule 15 which is in the following terms: "Procedure in auction of pledges, -- THE following procedure shall be observed with reference to the sale by public auction of pledges: (1) THE auctioneer to whom the sale of a pledge by auction Is entrusted shall be a person approved by the Commissioner of Police in the City of Madras or by the District Magistrate in the muffasal. (2) THE auctioneer shall cause all pledges to be exposed to public view. (3) (i) THE auctioneer shall print and publish a catalogue of the pledges to be sold in auction with the following particulars: (a) THE name, place of business and licence number of the pawnbroker concerned; (b) date of loan; (c) number of pledge in pledge book; (d) full and detailed description of the article (weight to be noted in the case of jewels); (e) name and address of pawner; and (f) date, hour and place of sale. (ii) THE printed catalogue referred to in Sub-clause (i) shall be published in the following manner: (a) A copy shall be posted at the place of business of the pawn broker concerned. (b) Copies shall be given to intending bidders. (iii) THE auctioneer shall sent at least a week before the date fixed for sale -- (a) two copies of the printed catalogue to the police station having jurisdiction over the premises where the auction is to be held, one copy for being posted on the notice board of the police station and another copy for record at that police station; and (b) one copy of the printed catalogue to the police station or each of the police stations having Jurisdiction over the place of the Business of the pawnbroker concerned for record at such police station. (iv) THE auctioneer shall also send a copy of the printed catalogue by registered post to the pawner at least a week before the date fixed for the sale. (4) THE pledges of each pawnbroker in the catalogue shall be separate from the pledges of any other pawnbroker. (5) THE auctioneer shall insert in some public newspaper approved by the Commissioner of Police in the City of Madras or by the District Magistrate elsewhere, an advertisement giving notice of the sale, and stating-( a) the pawnbroker's name and place of business; and (b) the months in which the pledges were pawned. (6) THE advertisement shall be inserted on two several days in the same newspaper, and the second advertisement shall be inserted at least ten clear days before the first day of sale. (7) Where a pawnbroker bids at a sale the auctioneer shall not take the bidding in any form other than that in which he takes the bidding of other persons at the same sale; and the auctioneer on knocking down any article to a pawnbroker shall forthwith declare audibly the name of the pawnbroker as purchaser. (8) THE auctioneer shall, within fourteen days after the sale, deliver to the pawnbroker a copy of the catalogue, or of so much thereof as relates to the pledges of that pawnbroker, filled up with the amounts for which the several pledges of that pawnbroker were sold as well as the charges for the sale of each of them and authenticated by the signature of the auctioneer. (9) THE pawnbroker shall preserve every such catalogue for at least three years after the auction." Sub-rule (1) of the above rule lays down that it is only a person approved by the Commissioner of Police in the City of Madras or the District Magistrate in the mufasal, that shall conduct the auction of a pledged article. THE emphasis is therefore on the suitability of the person and not the suitability of the place. Rule 15(1) does not lay down that the Commissioner should approve of the place where the auction is to be held. But what has to be approved is the individual who conducts the auction. Unlike in the case of licensing hotels, eating houses, and places of such public resort, where what has to be decided is whether the locality or the site where the institution is to be run conforms to certain requirements regarding public health, sanitation, etc., in the case of an auctioneer what has to be considered is his suitability, such as reliability, character and other matters and not the suitability of the place where the auction is held. For example if an insolvent, a known depredator, or a regular cheat, applies for approval for conducting business as an auctioneer In a commodious building located in a very suitable locality for such purpose, what the Commissioner has to decide is not the suitability of the place but the eligibility of the individual. THE Commissioner will not be justified in granting permission to an undesirable person because the auction is to be held in a very suitable place. That try's is the intention of the rule is made clear from other provisions also. Under Sub-rule (3) (i) (a) the auctioneer shall print and publish a catalogue of the pledges to be sold in auction with particulars regarding the name, place of business and licence number of the pawnbroker concerned. So what is contemplated is that at the time of the, auction, the auctioneer shall publish the place of business and the name and licence number of the pawnbroker concerned. Sub-rule (3) (i) (f) says that he shall publish the date, hour and place of sale. It does not say the place where the auctioner carries on his business and therefore if an auctioneer fixes a place other than his ordinary place of business he would not be contravening this provision of the rule. THEn again in Sub-clause (ii) (a) it is stated that a copy of such printed catalogue shall be posted at the place of business of the pawnbroker. It does not say that it should be posted at the place of business of the auctioneer. Reading R. 15 as a whole there is nothing to show that the place of business of the auctioneer is an important factor (or consideration. It seems to me therefore that the Commissioner of Police, in enquiring into the suitability of the building for conducting the auction before granting approval to the person, has failed to exercise a jurisdiction vested in him by law. I therefore quash the orders of the Commissioner of Police and the appellate authorities and remand the application to the Commissioner of Police for reconsideration in the light of the fact that what he has to consider is the suitability of the person and not that of the place.;

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