THE PUDUCHERRY PAWNBROKERS ACT, 1966

493 
 

THE PUDUCHERRY PAWNBROKERS 
ACT, 1966 

(No. 11 of 1966) 
 

ARRANGEMENT OF SECTIONS 
 
 SECTION  
 
 1. Short title and commencement.  
 2. Extension and adaptation.  
 3. Power to remove difficulty.  
 4. Repeal of existing law.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



494 
 

ANNEXURE  
 

THE MADRAS PAWNBROKERS ACT, 1943 
(As extended to the Union territory of Puducherry) 

(Madras Act XXIII of 1943) 
 
 

ARRANGEMENT OF SECTIONS 
 
 

 SECTION  
 

 1. Short title, extent and commencement.  
 2.  Definitions.  
 3.  Pawnbroker to obtain licence annually.  
 4.  Grant and refusal of licences.  
 5.  Pawnbrokers to exhibit their names over shops etc.  
 6.  Interest and charges allowed to pawnbrokers.  
 7.  Pawn ticket to be given to pawner.  
 8.  Conditions relating to redemption of pledge.  
 9.  Omitted.  
 10.  Pawnbrokers to keep books, give receipts, etc.  
 10-A.  Pawnbroker to keep pledge in his shop or place of business.  
 10-B.  Appointment of Inspectors and their powers.  
 11.  Redemption of pledge.  
 12.  Sale of pledge and inspection of sale book.  
 13.  Liability of pawnbroker in case of fire.  
  14. Compensation for depreciation of pledge. 
 14-A.  Power to cancel licences etc.  
 14-B.  Publication of order of cancellation.     
 14-C.  No compensation for cancellation of licence.  
 14-D.  Auctioneers to maintain certain registers.  
        15. Pawnbroker advancing smaller amount or receiving higher interest  
 than that specified in accounts to be punishable.  
         16.  Certain other acts of pawnbrokers to be punishable.   
         17.  Certain acts of pawners to be punishable.  
         18.  General penalty for contravention of Act, etc.  
         19.  Jurisdiction to try offences.  
         20.  Omitted.  
          21.  Contracts not to be void on account of offences but interest and costs  
 not to be allowed in certain cases.  
          21-A.  Omitted.  
          22.  Power to make rules.  
          23.  Omitted.  
          24.  Omitted.  
          25.  Omitted.                       



495 
 

 
THE PUDUCHERRY PAWNBROKERS ACT, 1966 

(Act No. 11 of 1966) 
 

    3rd June, 1966. 
 

AN ACT 

 
 
to regulate and control the business of the pawnbrokers in the Union territory of  
 Puducherry.  
 

 BE it enacted by the Legislative Assembly of Puducherry in the Seventeenth 
Year of the Republic of India as follows: -  
 

 1. Short title, extent and commencement. – (1) This Act may be called the 
Puducherry Pawnbrokers Act, 1966.  

       + (2) It shall come into force on such date as the Government may, by 
notification in the Official gazette, appoint.  
 

 2. Extension and adaptation.– (1) The  Madras Pawnbrokers Act, 1943 (Madras 
Act No. 23 of 1943) (hereinafter referred to as the said Act) as in force in the State 
of Madras immediately before the commencement of this act shall extend to and 
come into force in the Union territory of Puducherry subject to the following 
modifications and adaptations, namely :-  

(i)  Any reference in the said Act or in any rule to the ‘State of 
Madras’ shall be construed as a reference to the ‘Union territory 
of Puducherry’;  

(ii)  Any reference in the said Act or in any rule to the ‘state 
Government’ shall be construed as a reference to the 
‘Administrator’ appointed by the President under article 239 of 
the Constitution;  

(iii) Any reference to any provision of law not in force or to any 
functionary not in existence in the Union territory of Puducherry 
shall be construed as a reference to the corresponding law in 
force, or to the corresponding functionary in existence, in that 
territory;  

+ This Act came into force w.e.f 15.10.1966 
 
 
 



496 
 
 
 
    Provided that ---  

(a) if any question arises as to who such 
corresponding functionary is, or  

(b) if there is no such corresponding functionary,  

the Administrator shall decide as to who such functionary will be and such 
decision shall be final;  

(iv) Any reference in the said Act or rules to ‘Fort St. George Gazette’ 
or ‘District Gazette’ shall be construed as reference to ‘Official 
Gazette’;  

(v)  In section 2 of the said Act ---  

(a) sub-section (1) shall be omitted.  

(b) In sub-section  (3), for the words ‘Madras Co-operative 
Societies Act, 1932’ the words ‘Puducherry Co-operative 
Societies Act, 1965 (Act No. 11 of 1965)’ shall be 
substituted.  

(c) For sub-clause (ii) of section (5), the following shall be 
substituted, namely : -  

   ‘(ii) an advance made by a banking company as 
defined in section 5 (c) of the Banking Regulation Act, 1949 
(Central Act  X of 1949) or by the State Bank of India or by 
any other banking institution notified under Section 51 of 
the said Act or a Co-operative Society’;   

(vi)  in sub-section (1) of section 3, omit the brackets and the words 
‘other than section 1’;  

(vii) in sub-section  (1) of section 6, of the said Act, the words 
‘Notwithstanding anything contained in the Decree dated 22nd 
September, 1935’ shall be inserted at the beginning and the word 
‘naya’ shall be omitted.  

(viii) in clause (a) of sub-section  (3) of section 10-B, the words ‘in the 
mufassal or a Presidency Magistrate in the Presidency town’ shall 
be omitted.  

 
 
 
 
 
 
 



497 
 
 

(ix) In section 12 of the said Act ---  

(a)  at the beginning of sub-section (1), the words ‘subject to 
the provisions of any other law’ shall be inserted.  

(b)  sub-section (2) shall be omitted.  

(x)  For section 19 of the said Act, the following shall be substituted 
namely: - 

 

  “19. Jurisdiction to try offences. – No Court inferior to that of a Magistrate 
of second class shall try any offence punishable under this Act.”. 

(xi)  For sub-section (4) of section 22 of the said Act, the following sub-
section  shall be substituted, namely : -  

  “(4) Every rule made under this Act shall, as soon as may be after it is 
made, be laid before the Assembly  while it is in session for a total period of not 
less than fourteen days which may be comprised in one session or in two or more 
successive sessions and if before the expiry of the session in which it is so laid or 
the sessions aforesaid, the Assembly  makes any modifications in the rule or 
decides that rule should not be made, the rule shall there after have effect only in 
such modified form or be of no effect, as the case may be, so, however, that any 
such modification or annulment shall be without prejudice to the validity of 
anything previously done under that rule.  

(xii) Sections 21-A, 23, 24 and 25 shall be omitted.   

  (2) The Madras Pawnbrokers Rules, 1944 and any other rules made or 
issued under the said Act and similarly in force, in so far as their application is 
required for the purpose of effectively applying the provisions of the said act, are 
also hereby applied to, and shall be in force in the Union territory of Puducherry.  
 

 3. Power to remove difficulty. – If any difficulty arises in giving effect to the 
provisions of the said Act, the Government may, by order in the Official Gazette, 
make such provisions or give such directions as appear to it to be necessary for the 
removal of the difficulty, in so far as it is not inconsistent with the provisions of the 
said Act or rules.  
 

 4. Repeal of existing law. – The Decree No. 386, dated 22nd February, 1906 
promulgated by Arrete No. 385, dated 18th June, 1906 shall stand repealed.  

------------------------ 
 
 
 
 
 



498 
 

 
ANNEXURE  

 
 

THE MADRAS PAWNBROKERS ACT, 1943 

(As extended to the Union territory of Puducherry) 
(Madras Act XXIII of 1943) 

  

AN ACT  

 
to regulate and control the business of pawnbrokers in the State of Madras.  
 

 Whereas it is expedient to make provision for the regulation and control of 
the business of pawnbrokers in the State of Madras;  
 

 It is hereby enacted as follows : -  
 

 1. Short title, extent and commencement. – (1) This Act may be called the 
Madras Pawnbrokers Act, 1943.  

  (2) It extends to the whole of the State of Madras.  

  (3) [Omitted.] 
 

 2. Definitions. – In this Act, unless there is anything repugnant in the subject 
or context ---  

  (1) (Omitted) 

  (2) ‘Company’ means the Company ---  

(a)  registered under any of the enactments relating to companies 
for the time being in force in India or in the United Kingdom or 
in any of the British Dominion or in any of the Colonies of the 
United Kingdom; or  

(b)  incorporated by an Act of Parliament of the United Kingdom or 
by Royal Charter of Letters Patent or by any Central Act.  

  (3) “Co-operative Society” means a society registered or deemed to be 
registered under the Puducherry Co-operative Societies Act, 1965 (Act No. 11 of 
1965); 

 
 



499 
 
  (3-A) “Inspector” means an Inspector appointed under sub-section  (1) of 
section 10-B;  

  (4) “interest” does not include any sum lawfully charged in accordance 
with the provisions of this Act by a pawnbroker for or on account of charges, but 
save as aforesaid includes any amount, by whatsoever name called, in excess of 
the principal, paid or payable to a pawnbroker in consideration of or otherwise in 
respect of a loan;  

  (5) “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, 
but does not include ---  

(i)  a deposit of money or other property in a Government Post 
Office Savings Bank or in a company or with a co-operative 
society; 

(ii)  an advance made by a Banking Company as defined in section 5 
(c) of the Banking Regulation Act, 1949 (Central Act X of 1949) 
or by the State Bank of India or by any other banking institution 
notified under section 51 of the said Act or a co-operative 
society;  

(iii) an advance made by Government or by any person authorised 
by Government to make advances in their behalf, or by any 
local authority;  

(iv) an advance made by any person bona fide carrying on any 
business not having for its primary object the lending of money, 
if such loan is advanced in the regular course of such business; 
and  

(v)  an advance made by a landlord to his tenant, by a lessor to his 
lessee, or by one partner in cultivation or co-sharer to another 
for the purpose of carrying on agriculture;  

  (6) “pawnbroker” means a person who carries on the business of taking 
goods and chattels in pawn for a loan; 

  Explanation. – Every person who keeps a shop for the purchase or sale of 
goods or chattels and who purchases goods or chattels and pays or advances 
thereon any sum of money with or under an agreement or understanding 
expressed or implied that the goods or chattels may be afterwards re-purchased on 
any terms is a pawnbroker within the meaning of this clause;       

  (7) “pawner” means a person delivering an article for pawn to a 
pawnbroker;  
  (8) “pledge” means an article pawned with a pawn broker;  
  (9) “prescribed” means prescribed by rules made under this Act;  
  (10) “principal” in relation to a loan means the amount actually lent to the 
pawner; and  



500 
 
  (11) “year” means the financial year.  
 

 3. Pawnbroker to obtain licence annually. – (1) No person shall, after the 
expiry of three months from the date on which the provisions of this Act come into 
force in any area, carry on or continue to carry on business as a pawnbroker at any 
place in such area, unless he has obtained a pawnbroker’s licence under this Act.  

  Explanation. --- Where a pawnbroker has more than one shop or place of 
business, whether in the same town or village or in different towns and villages, he 
shall obtain a separate pawnbroker’s licence in respect of each shop or place of 
business.  

  (2) Every pawnbroker’s licence granted under this Act shall expire on the 
last day of the year for which it was granted, but may be renewed from year to 
year.  
 

 4. Grant and refusal of licences. – (1) Every application for a pawnbroker’s 
licence shall be in writing and shall be made to the licensing authority prescribed 
under this Act.  

  (2) 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 any adjacent house or shop or place, owned 
or occupied by him, is frequented by thieves or persons of bad 
character:  

  Provided that the licence shall not be refused under this sub-section  
unless the applicant has had a reasonable opportunity of making his 
representations.  
 

  (3) In granting or refusing to grant a licence under this section, the 
licensing authority may consult such authority or officer as may be prescribed.  

  (3-A) Any person aggrieved by an order of the licensing authority 
refusing to grant a licence under this section may, within such time as may be 
prescribed, appeal to such authority as the Administrator may specify in this 
behalf and such authority may make such order in the case as he may think fit. 

  



501 
 
 (4) Every licence shall be granted in such form and subject to such conditions as 
may be prescribed and on payment of such fee not exceeding 1 [one hundred 
rupees] as the Administrator may, from time to time, by notification in the Official 
Gazette, determine.  
 

 5. Pawnbrokers to exhibit their names over shops, etc. – Every pawnbroker 
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; and  
  (b) always keep placed in a conspicuous part of his shop or place of 
business so as to be legible to all persons resorting thereto the information 
required to be printed on pawn tickets by rules made under this Act in the chief 
language of the locality.  
     6. Interest and charges allowed to pawnbrokers.-*[(1) Notwithstanding 
anything contained in the Decree dated 22nd September, 1935, no pawn broker 
shall charge interest in respect of a loan on a pledge at a rate exceeding such rate as 
the State Government may, by notification, fix from time to time: 

Provided that the rate of interest, as may be fixed by the State Government, 
shall be correlated to the current bank rates of lending, as may be fixed by the 
Reserve Bank of India, from time to time.] 
  (2) A pawnbroker may demand and take from the pawner such charges 
and in such cases as may be prescribed.  
  (3) A pawnbroker shall not demand or take from the pawner any profit, 
interest, charge or sum whatsoever, other than the interest due to him and the 
charges, if any, referred to in sub-section  (2).  
 

 7. Pawn ticket to be given to pawner. – Every pawn broker shall on taking a 
pledge in pawn give to the pawner a pawn-ticket in the prescribed form, and shall 
not take a pledge in pawn unless the pawner takes the pawn-ticket.  
 8. Conditions relating to redemption of pledge. – (1) In the absence of a decree 
of an order of a civil court, or an order of a Magistrate or an officer of police not 
below the rank of Sub-Inspector prohibiting the delivery by the pawnbroker, of the 
pledge, to the pawner, the pawner shall, on production of the pawn-ticket and on 
payment of the sum legally payable in respect thereof, be entitled to the delivery of 
the pledge.  
  (2) On a declaration in the prescribed form from the pawner that the right 
to redeem the pledge has been transferred to, or is vested in, some other person 
and on a declaration from that other person that he is in possession of the pawn-
ticket and that he is entitled to redeem the pledge, the pawnbroker shall cause an 
endorsement to be made on the pawn-ticket that the holder thereof is such other 
person, and shall cause the necessary entry to be made in the pledge book and 
 
 
        1  Substituted by Act 12 of 1973, Section 2, w.e.f 03.10.1973. 
      * Amended vide Act No. 7 of 1980 w.e.f  03.07.1980. 
 
 
 
 



502 
 
 
thereafter the former persons’ right to redeem shall be extinguished and such 
other person shall be deemed to be the pawner for the purposes of this section.  
  (3) Where a person claiming to be the messenger or agent of the pawner 
produces the pawn-ticket and offers to redeem the pledge, the pawn may, after 
obtaining from the person so claiming, a declaration in the prescribed form, allow 
redemption if the pawnbroker is satisfied that the person who claims to be such 
messenger or agent is in fact such messenger or agent:  
  Provided that such pawnbroker shall remain liable to compensate the 
pawner if it be found later that such messenger or agent had not in fact been duly 
authorised by the pawner to redeem the pledge: 
  Provided further that, where a person claiming to be the messenger or 
agent of the pawner produces the pawn-ticket and offers to redeem the pledge, the 
pawnbroker may send a notice in the prescribed form by registered post to the 
pawner to the address left by the pawner with the pawnbroker, and if he does not 
hear anything from the pawner contrary to the claim within two weeks after the 
date on which the notice would in the usual course of post reach the pawner, the 
pawn broker may allow the person claiming to be such messenger or agent to 
redeem the pledge and shall in that event be exonerated from further liability to 
the pawner of any person claiming under him.     
  (4) (a) Where the pawner is dead and a person produces the pawn-ticket 
claiming to be the legal representative of the pawner and offers to redeem the 
pledge, the pawnbroker shall allow such redemption, after obtaining from such 
person ---  

(i)  a declaration in the prescribed form duly made by such 
person before any Magistrate or Judge; and  

(ii)  a bond duly executed by such person with one or more 
sureties to the satisfaction of the pawnbroker or of such 
authority or person as may be prescribed in this behalf, 
agreeing to indemnify the pawnbroker in respect of any 
liability which may be incurred by him by reason of 
delivering the pledge or otherwise acting in conformity 
with the declaration:  

  Provided that no such declaration or bond shall be necessary if such 
person produces an order of a civil court having jurisdiction to entertain a suit for 
the redemption of the pledge, authorizing him to redeem the pledge as the legal 
representative of the deceased pawner and in any such case, the pawnbroker shall 
allow redemption.  
   (b) The amount of every bond executed under clause (a) shall be 
fixed with due regard to the circumstances of the case and shall not be excessive.  

(5) Where a person comes into possession of a pawn-ticket as the assignee of 
the pawner such person shall give notice of such assignment to the pawnbroker in 
the prescribed form, but the pawnbroker shall not be bound to recognize the claim 
of such person to redeem the pledge unless the pawner intimates to the 
pawnbroker the fact of such assignment or unless the pawnbroker, after having 
sent a notice in the prescribed form by registered post to the pawner to the address 

 



503 
 
left by the pawner with the pawnbroker intimating to him the claim made under 
the alleged assignment, does not hear anything from the pawner contrary to the 
claim within two weeks after the date on which the notice would in the usual 
course of post reach the pawner.     
  (6) Where the pawner alleges that the pawn-ticket has been lost or 
destroyed and claims redemption of the pledge, the pawnbroker shall, after 
obtaining from the pawner, a declaration in the prescribed form allow such 
redemption unless the pawnbroker has received intimation from any other person 
that he is in possession of the pawn-ticket and is entitled to redeem the pledge.  

  Provided that, before allowing such redemption, the pawnbroker may 
insist on security to his satisfaction or to the satisfaction of such authority or 
person as may be prescribed in this behalf being given by the pawner against 
possible claim by any other person.   
 
  (7) Where a person claims to be the owner of a pledge and alleges that the 
pledge was pawned without his knowledge or authority, the pawnbroker shall 
take a declaration from such person in the prescribed form and send a notice in the 
prescribed form by registered post to the pawner to the address left by the pawner 
with the pawnbroker, and similarly to every other person who has made any claim 
to the pawnbroker of being entitled to redeem the pledge, and if the pawnbroker 
does not receive any communication in writing from the pawner or any other such 
person prohibiting the delivery of the pledge to the claimant, within two weeks 
after the date on which the notice or notices would in the usual course of post 
reach the addressee or addressees the pawnbroker may allow the claimant to 
redeem the pledge, and the pawnbroker shall in that event be exonerated from 
further liability to the pawner or any person claiming under him.    
 

 9. (Omitted).  
 

 10. Pawnbrokers to keep books, give receipts, etc. – (1) Every pawnbroker 
shall –  

(a) regularly record and maintain or cause to be recorded and 
maintained in a pledge book in the prescribed form, an account 
showing for each pawner separately ---  

(i)  the date of the loan, the amount of the principal of the loan 
and the rate of interest charged on the loan percent per 
annum or per rupee per mensem or per rupee per annum;  

(ii)  the amount of every payment received by the pawn broker 
in respect of the loan, and the date of such payment;  

(iii)  a full and detailed description of the article or of each of 
the articles taken in pawn.  

(iv)  the time agreed upon for the redemption of the pawn;  



504 
 

(v)  the name and address of the pawner, and where the 
pawner is not the owner of the article or of any of the 
articles pawned, the name and address of the owner 
thereof;  

(vi)  such other particulars as may be prescribed.  

(b)  keep and use in his business the following documents and books 
(which shall be in the prescribed form) and enter therein from 
time to time, as occasion requires, in a fair and legible manner 
such particulars and in accordance with such directions as may be 
prescribed : -  

(i)  pawn-ticket;  

(ii)  sale book of pledges;  

(iii)  declaration where pledge is claimed by owner;  

(iv)  declaration of pawn-ticket lost; and  

(v)  receipt on redemption of pledge;  

(c)  give to the pawner or his agent a receipt for every sum paid by 
him, duly signed and, if necessary, stamped at the time of such 
payment; and  

(d) on requisition in writing made by the pawner furnish to the 
pawner or, if he so requires, to any person mentioned by him in 
that behalf in his requisition, a statement of account signed by 
himself or his agent, showing the particulars referred to in clause 
(a) and also the amount, which remains outstanding on account 
of the principal and of interest, and charge such sum as the 
Administrator may prescribe as fee therefor:  

  Provided that no such statement shall be required to be furnished to a 
pawner if he is supplied by the pawnbroker with a pass book in the prescribed 
form containing an up-to-date account of the pawnbroker’s transactions with the 
pawner.  

  (2) All records or entries made in the books, accounts and documents 
referred to in sub-section (1) shall be either in English or in such language of the 
locality as may be prescribed; and all such books, accounts and documents and all 
pledges taken by the pawnbroker shall be open to inspection at any time by the 
Inspector having jurisdiction.  

  (3) Notwithstanding anything contained in the Indian Evidence Act, 1872 
(Central Act I of 1872), a copy of the account referred to in clause (a) of sub-section  
(1), certified in such manner as may be prescribed, shall be admissible in evidence 
in the same manner and to the same extent as the original account.  



505 
 
  (4) A pawner to whom a statement of account has been furnished under 
clause (d) of sub-section (1) and who fails to object to the correctness of the account 
shall not, by such failure alone, be deemed to have admitted the correctness of 
such account.    

  (5) In the pawn-ticket furnished to the pawner, in the receipt given under 
clause (c) of sub-section  (1) and in the statement of account furnished under clause 
(d) of that sub-section, the figures shall be entered only in Arabic numerals.       

 
 10-A.Pawnbroker to keep pledge in his shop or place of business. – Every 
pawnbroker shall ordinarily keep every pledge in the shop or place of business for 
which the licence has been granted. If in any case, the pawnbroker keeps the 
pledge in any place other than such shop or place of business, he shall, within a 
period of seven days from the date on which the holder of a pawn-ticket, intimates 
his desire to inspect the pledge concerned, produce such pledge at the shop or 
place of business aforesaid for such inspection.     
 

 10-B. Appointment of Inspectors and their powers. – (1) The Administrator or 
any authority or officer empowered by them may, by notification, appoint one or 
more persons to be Inspectors for the purposes of this Act and specify in such 
notification the local limits of their jurisdiction.   

  (2) Every Inspector shall be deemed to be a public servant within the 
meaning of section 21 of the Indian Penal Code (Central Act XLV of 1860). 

  (3) (a) A Magistrate of the first-class may, on receiving a report from an 
Inspector or from any Police Officer not below the rank of Sub-Inspector that ---  

(i)  any person carries on business as a pawnbroker without a 
licence at any place within the jurisdiction of such 
Magistrate, or  

(ii)  any pawnbroker carries on business in contravention of 
the provisions of this Act or the rules made thereunder or 
the conditions of the licence granted under this Act, at any 
place within the jurisdiction of such Magistrate,  

issue warrant empowering the Inspector or, as the case may be, such Police Officer 
to enter such place with such assistants as he considers necessary and inspect the 
books, accounts, records, files, documents, sales, vaults and pledges in such 
premises. On receiving such warrant, the Inspector or the Police Officer may enter 
the place and inspect the books, accounts, records, files, documents, safes, vaults 
and pledges in such premises and may take to his office for further investigation 
such books, accounts, records, files and documents as he considers necessary: 

  Provided that if the Inspector or the police officer removes from the 
premises any books, accounts, records, files and documents, he shall give to the 



506 
 
person in charge of the place, a receipt describing the books, accounts, records, 
files and documents so removed by him:  

  Provided further that within twenty-four hours of the removal of the 
books, accounts, records, files and documents from the premises, the Inspector or 
the police officer shall either return them to the person from whose custody they 
were removed or produce them in the court of the Magistrate who issued the 
warrant. Such Magistrate may return the books, accounts, records, files and 
documents or any of them to the person from whose custody they were removed 
by the Inspector or the police officer, after taking from such person such security 
as the Magistrate considers necessary for the production of the books, accounts, 
records, files and documents when required whether by the Inspector, the police 
officer or the court or may pass such other orders as to their disposal as appear just 
and convenient to the Magistrate. 

   (b) An Inspector shall have authority to require any person whose 
testimony he may require regarding any loan or pledge or any other transaction of 
a pawnbroker to attend before him or to produce or cause to be produced any 
document and to examine such person on oath.  

  (4) An Inspector may apply for assistance to an officer in charge of a police 
station and take police officers to accompany and assist the Inspector in 
performing his duties under this Act. 
 

 11. Redemption of pledge. – (1) Every pledge shall be redeemable within one 
year from the date of pawning, exclusive of that day; and there shall be added to 
that year of redemption seven days of grace within which every pledge shall 
continue to be redeemable. 

  (2) A pledge shall further continue to be redeemable until it is disposed of 
as provided in this Act, although the period of redemption and days of grace have 
expired.  

  Explanation. – Where the contract between the parties provides a longer 
period for redemption than one year, the provisions of this section shall be read 
and construed as if references to such longer period had been substituted for the 
references to the period of one year therein.  
 

 12. Sale of pledge and inspection of sale book. --- (1) Subject to the provisions 
of any other law, a pledge pawned shall not be disposed of by the pawnbroker 
otherwise than by sale at a public auction, conducted in accordance with such 
rules as may be prescribed.  

  (2) (Omitted) 

  (3) 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 pawnbroker’s 
book or in such catalogue of the auction as may be prescribed.       



507 
 
 
 
  (4)  (a) Where a pledge has been sold for more than the amount of the 
loan and the interest and prescribed charges due at the time of the sale, the 
pawnbroker shall pay to the holder of the pawn-ticket on demand made within 
three years after the sale, the surplus after deducting therefrom the necessary costs 
and prescribed charges of the sale  

      (b) If on such demand it appears that the sale of the pledge has 
resulted in a surplus but that within twelve months before such sale, the sale of 
any other pledge or pledges of the same person has resulted in a deficit, the 
pawnbroker may set-off the deficit against the surplus and shall be liable to pay 
only the balance, if any, after such set-off. 
 

 13. Liability of pawnbroker in case of fire. – (1) Where a pledge is lost by theft 
or is destroyed or damaged by or in consequence of fire, the pawnbroker 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.  

  Explanation. – For the purpose of this sub-section, the value of the pledge 
shall be its estimated value (if any) entered in the pledge book at the time of the 
pawn together with interest on the amount of the principal and shall in no case be 
less than the aggregate of the amount of the principal and interest and twenty-five 
per cent on the amount of the principal.  

  (2) A pawnbroker shall be entitled to ensure to the extent of the value so 
estimated.  
 

 14. Compensation for depreciation of pledge. – If a person entitled and 
offering to redeem a pledge shows to the satisfaction of a Civil Court having 
jurisdiction to entertain a suit for such redemption that the pledge has become or 
has been rendered of less value than it was at the time of pawning thereof by or 
through the default, neglect or willful misbehaviour of the pawnbroker, the Court 
may if it thinks fit award reasonable compensation to the owner of the pledge in 
respect of the damage, and the amount awarded shall be deducted from the 
amount payable to the pawnbroker, or shall be paid by the pawnbroker (as the 
case requires) in such manner as the Court directs.  
  

 14-A. Power to cancel licences, etc. – (1) The licensing authority specified in 
sub-section  (1) of section 4 may, at any time, during the term of any licence, cancel 
it by an order in writing –  

(a)  if the licensee carries on the business in contravention of any of 
the provisions of this Act or the rules made thereunder or of the 
conditions of the licence, or  



508 
 

(b)  if any reason for which such authority could have refused to 
grant the licence to the pawnbroker under sub-section (2) of 
section 4, is brought to the notice of that authority after the grant 
of the licence, or  

(c)  if the licensee is convicted for an offence under sub-section  (1) of 
section 15, or  

(d)  if the licensee maintains false accounts.  

   (2) Before cancelling a licence under sub-section  (1), the licensing 
authority shall give the licensee a notice in writing stating the grounds on which it 
is proposed to take action and requiring him to show cause against it within such 
time as may be specified in the notice.  

  (3) Any person aggrieved by an order of the licensing authority cancelling 
a licence under sub-section  (1), may, within such time as may be prescribed, 
appeal to such authority as the Administrator may specify in this behalf and such 
authority may make such order in the case as he may think fit.  
 

 14-B. Publication of order of cancellation. – Every order of cancellation of a 
licence under section 14-A shall be notified in the Official Gazette and also on the 
notice-board of the office of the licensing authority.  
 

 14-C. No compensation for cancellation of licence. --  A person whose licence 
is cancelled under section 14-A shall not be entitled to any compensation in respect 
of such cancellation or to the refund of any fee paid in respect of such licence.  
 

 14-D. Auctioneers to maintain certain registers. – (1) Auctioneers conducting 
sales under this Act of pledges shall maintain such registers containing such 
particulars as may be prescribed.  

  (2) At any time within three years after the public auction, any police 
officer not below the rank of Sub-Inspector may inspect the registers referred to in 
sub-section (1) at all reasonable times and at such places as may be prescribed.  
 

 15. Pawnbroker advancing smaller amount or receiving higher interest than 
that specified in accounts to be punishable. – (1) Any pawnbroker who actually 
advances an amount less than that shown in the pawn-ticket or in his accounts or 
registers or who takes or receives interest or any other charge at a rate higher than 
that shown in the pawn-ticket or in his accounts or registers shall be punished 
with fine which may extend to five hundred rupees.  

  (2) If a pawnbroker is convicted of an offence under sub-section (1) after 
having been previously convicted of such an offence, the court convicting him may 
order his licence as a pawnbroker to be cancelled.   
 

 16. Certain other acts of pawnbrokers to be punishable. – A pawnbroker, 
who --  



509 
 
  (1) takes an article in pawn from any person appearing to be under the 
age of eighteen years, or to be of unsound mind; or  

  (2) purchases or takes in pawn or exchanges a pawn-ticket issued by 
another pawnbroker; or  

  (3) employs any person under the age of eighteen years to take pledges in 
pawn; or  

  (4) under any pretence purchases, except at a public auction, any pledge 
while in pawn with him; or   

  (5) suffers any pledge while in pawn with him to be redeemed with a 
view to his purchasing it; or  

  (6) makes any contract or agreement with any person pawning or offering 
to pawn any article, or with the owner thereof, for the purchase, sale or disposition 
thereof within the time of redemption; or  

  (7) Sells or otherwise disposes of any pledge pawned with him except at 
such time and in such manner as is authorised by or under this Act,  

shall be punished with imprisonment for a term which may extend to six months 
or with fine which may extend to one thousand rupees or with both.  
 

 17. Certain acts of pawners to be punishable. – (1) Any person who ---  

(a)  offers to a pawnbroker an article by way of pawn, being unable or 
refusing to give a satisfactory account of the means by which he 
became possessed of the article; or  

(b)  wilfully gives false information to a pawnbroker as to whether an 
article offered by him in pawn to the pawnbroker is his own 
property or not, or as to his name and address, or as to the name 
and address of the owner of the article; or  

(c)  not being entitled to redeem, and not having any colour of title by 
law to redeem, a pledge, attempts or endeavours to redeem the 
same;  

shall be punished with imprisonment for a term which may extend to six months 
or with fine which may extend to one hundred rupees or with both.  
  (2) In every case falling under sub-section (1), and also in any case where, 
on an article being offered in pawn, for sale, or otherwise, to a pawnbroker he 
reasonably suspects that it has been stolen or otherwise illegally or clandestinely 
obtained, the pawnbroker shall, in the absence of reasonable excuse, inquire into 
the name and address of the person concerned, and seize and detain such person 
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.  



510 
 
  (3) A list of properties believed to have been stolen may be delivered by 
the police to any pawnbroker licensed under this Act and thereupon it shall be the 
duty of such pawnbroker ---  

(a)  if any article answering the description of any of the properties 
set-forth in any such list is offered to him in pawn, for sale, or 
otherwise, to proceed in accordance with the provisions of sub-
section  (2); and  

(b) if any such article is already in his possession, forthwith to 
communicate to the nearest  police station the facts of the case 
(including full particulars as to the name and address of the 
person concerned in the delivery of the article to the 
pawnbroker) and also, if so required by the police, to deliver the 
article to them.  

 

 18. General penalty for contravention of Act, etc. – (1) whoever contravenes 
any of the provisions of this Act or of any rule or of any terms or conditions of a 
licence made or granted thereunder shall, if no other penalty is elsewhere 
provided in this Act for such contravention, be punished with fine which may 
extend to fifty rupees and, if such person has been previously convicted whether 
under this section or any other provision contained in this Act, with fine which 
may extend to one hundred rupees.  
 
  (2) Any person who after having been convicted of the offence of carrying 
on, or continuing to carry on, the business of pawnbroker in contravention of the 
provisions of section 3, continues to commit the same offence in the same year, 
shall in addition to the fine to which he is liable under sub-section (1), be punished 
with a further fine which may extend to ten rupees for each day after the previous 
date of conviction during which he continues so to offend.  

  (3) Any Court convicting a pawnbroker of a contravention of the 
provisions of clause (c) or clause (d) or sub-section (1) of section 10 may direct him 
to furnish a receipt of statement of account in accordance with the provisions of 
that clause, and if the pawnbroker fails to comply with the direction, the Court 
may order his licence as a pawnbroker to be cancelled.    
 

 19. Jurisdiction to try offences. – No Court inferior to that of a Magistrate of 
second class shall try any offence punishable under this Act.  
 

 20. (Omitted).    

 21. Contracts not to be void on account of offences but interest and costs not 
to be allowed in certain cases. – Where a pawnbroker is guilty of an offence under 
this Act, or where his licence is cancelled under any of the provisions of this Act, 
any contract of pawn or other contract made by him, in relation to his business of 
pawnbroker, shall nevertheless not be void by reason only of that offence, or 
cancellation nor shall he by reason only of that offence or cancellation lose his lien 
on or right to the pledge or to the loan and the interest and other charges, if any, 
payable in respect thereof; nor shall that offence or cancellation affect any 



511 
 
obligation or liability incurred by the pawnbroker before that offence or 
cancellation.  

  Provided that if a pawnbroker fails to deliver to the pawner a pawn-ticket 
as required by section 7 or fails to give to the pawner or his agent a receipt as 
required by clause (c) of sub-section  (1) of section 10 or to furnish on a requisition 
made under clause (d) of that sub-section , a statement of account as required 
therein within one month after such requisition has been made, the pawnbroker 
shall not be entitled to any interest for the period of his default:  

  Provided further that if in any suit or proceeding relating to a loan, the 
Court finds that a pawnbroker has not maintained accounts as required by clause 
(a) or clause (b) of sub-section (1) of section 10, he shall not be allowed his costs.  
 

 21. A. (Omitted).  
 

 22. Power to make rules. – (1) The Administrator may make rules to carry out 
the purposes of this Act.  

  (2) In particular and without prejudice to the generality of the foregoing 
power, such rules may provide for ---  

(a)  all matters expressly required or allowed by this Act to be 
prescribed;  

(b)  the form of, and the particulars to be contained in, an 
application for a pawnbroker’s licence under this Act; and  

(c)  the form in which books, accounts and documents specified in 
this Act shall be recorded, maintained, kept or used.  

  (3) All rules made under this Act shall be published in the Official Gazette 
and, unless they are expressed to come into force on a particular day, shall come 
into force on the day on which they are so published.  

  (4) Every rule made under this Act shall, as soon as may be after it is 
made, be laid before the Legislative Assembly while it is in session for a total 
period of not les than 14 days which may be comprised in one session or in two or 
more successive sessions and if before the expiry of the session in which it is so 
laid or the sessions aforesaid, the Assembly makes any modifications in the rule or 
decides that the rule should not be made, the rules shall thereafter have effect only 
in such modified form or be of no effect as the case may be, so, however, that any 
such modification or annulment shall be without prejudice to the validity of 
anything previously done under that rule.  
 

 23. (Omitted).  
 

 24. (Omitted).  
 

 25. (Omitted).     

----------------------