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of <h1>Bank prohibited from charging interest during police seizure; entitled to interest post-release. Writ partially allowed.</h1> <h3>Smt. Aratibala Mohanty Versus State Bank of India and Ors.</h3> The court ruled that the Bank could not charge interest for the period when it couldn't deliver the pledged goods due to police seizure. However, once the ... - Issues:- Whether a pawnee can charge interest on pledged articles when unable to release them due to supervening circumstances.- The legal position regarding the rights and liabilities of a pawnee in a pledge agreement.Analysis:1. The case involves a dispute where the petitioner pledged gold ornaments with the State Bank of India and sought to release them, but the Bank refused due to police seizure under a criminal case against the petitioner's husband. The petitioner argued that the Bank should not charge interest during the period it couldn't release the pledged articles.2. The legal framework of pledge under Sections 172 to 176 of the Indian Contract Act was examined. The pawnee, as the Bank in this case, has the right to retain possession of pledged goods until the debt is repaid. The pawnee can sell the goods if the pawnor defaults, but until then, the pawnor can redeem the goods upon repayment of the debt.3. The petitioner's counsel relied on two Supreme Court decisions, Lallan Prasad v. Rahmat Ali and The Bank of Bihar v. The State of Bihar, to argue that a pawnee cannot charge interest if unable to deliver the pledged goods. However, the court found these cases did not support the petitioner's contention.4. The court noted that the Bank's obligation to return the pledged goods was hindered by the police seizure, but once the attachment order was vacated, the Bank could have returned the goods. The petitioner failed to inform the Bank of the order's vacation, and thus, the Bank was justified in claiming interest post that date.5. The court held that for the period when the Bank could not deliver the goods due to the seizure, it could not charge interest. However, once the attachment order was lifted, the Bank was entitled to interest until the debt was repaid and the goods redeemed.6. Ultimately, the court allowed the writ application in part, ruling that the Bank could not charge interest for the period when it couldn't deliver the goods, but could do so post the vacation of the attachment order. No costs were awarded in the judgment.7. Justice Mahapatra concurred with the decision, and the writ application was allowed as per the court's findings.
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